Budget Recap: $1.5B Agri-Forestry, Push to Remove ‘Water Rule’

Australia's Budget bolsters biosecurity, now time to corrrect the Emission Reduction Fund 'Water Rule'

Tue 09 May 23


Australia’s agricultural sector biosecurity, worker, and market access will be boosted by $1.5 billion in new spending as part of the Federal Budget tabled in parliament overnight.

This investment aims to improve biosecurity, grow the workforce, and increase market access. In addition, the budget maintains support for crucial forestry initiatives, such as innovation grants, a national institute for forest products innovation, and plantation establishment grants.

Australian Forestry: Now for the EMF ‘Water Rule’

The Australian Forest Products Association has welcomed the Albanese government’s continued support of the forest products sector with the ongoing delivery of key funding commitments in the federal Budget, says CEO Joel Fitzgibbon said.

“Australia’s forest products sector is crucial in Australia’s battle against climate change and for the country to meet national emissions reduction targets,” Mr Fitzgibbon said.

“The sector also provides employment for tens of thousands of Australians and creates essential and sustainable everyday products we cannot live without.

“We welcome the government’s recognition and support for the sector.”

In the previous Budget, the government committed $100 million for a Launceston-based NIFPI, $86 million for plantation establishment grants, $113 million for wood processing innovation grants, $10 million for skills and training and extended funding for regional forestry hubs.

“We welcome the government’s ongoing delivery of the 2022 federal election commitments and welcome action to remove the Emissions Reduction Fund (ERF) ‘water rule’ which prevents forest growers’ access to carbon markets,” Mr Fitzgibbon said.

“We also look forward to the government announcing a strategic partnership with sector stakeholders.”

Mr. Fitzgibbon said that, like the broader agriculture and primary industries sectors, effective biosecurity was essential to protecting the integrity of forestry and forest health.

“We welcome the government’s plans to strengthen the national biosecurity system,” he said.

“However, we are watchful of plans to increase biosecurity costs for the sector through increased levies. We will work closely with the government on the design of the reforms.

 “I look forward to continuing work with Minister Watt, Prime Minister Albanese and other members of the government to ensure that Australia’s forest product sector thrives to fight climate change, create essential, sustainable products and provide ongoing and secure jobs for thousands of Australians.”

The Water Rule – how it works and why it needs to be removed

Last month, Timber Queensland CEO Mick Stephens wrote an op-ed for Wood Central, commemorating the first anniversary of the federal government’s pledge to revoke the rule.

According to the rule, new timber plantations cannot participate in carbon sequestration projects in areas with over 600mm annual rainfall unless the Minister confirms no negative effects on water allocations.

On the anniversary of the election commitment, Timber Queensland poses the question – what’s happened since?

Stephens states, “Plantation forestry is the only vegetation management activity that requires such a rule in the Fund.”

In several timber-growing regions, such as Queensland, the Northern Territory, and parts of New South Wales, this rule continues to be firmly enforced.

“Industry has long argued that this acts as a perverse barrier to any new plantation investment as without carbon payments most plantation projects would fail to deliver an adequate rate of return,” Stephens said.

During the federal election, both major parties demonstrated solid bipartisan support for eliminating the water rule, aiming to boost new plantation investments, carbon sequestration, and timber supply.

Australia’s first-ever sustainable biodiversity funding model

Nevertheless, the funding comes with increased costs for farmers, travellers, and importers who will back Australia’s first-ever sustainable biosecurity funding model.

Agriculture Minister Murray Watt outlined the funding model in a media statement last night.

Reported in Sheep Central overnight, the proposal includes a 10% increase in agricultural levies, based on the 2020-21 industry-led agricultural levies, scheduled to commence in July 2024. This levy increase is anticipated to generate $153 million over three years. National leader David Littleproud criticised the plan, claiming it would impose a food tax on Australian families.

Under the proposed biosecurity funding model, large importers will contribute $350 million to biosecurity expenses next year, primarily through increased fees and cost-recovery charges. In addition, import items valued at $1,000 or less will be subject to a new biosecurity levy to raise $81 million within three years.

Minister Watt emphasized that the new funding model would provide over $1 billion in biosecurity funding. Of this amount, $845 million will be allocated to support biosecurity operations across the country, ensuring the protection of Australia’s vital agricultural industries. The continued backing for key forestry initiatives highlights the government’s commitment to promoting innovation and growth in the forestry sector in conjunction with the agricultural industry.

“For the first time, an Australian Government is locking in higher, ongoing and more predictable biosecurity funding, from year to year – drawing a line under years of stop-gap, temporary funding from Coalition Governments, that placed our agriculture sector at risk.”

Mr. Watt said that to address risks from travelers and parcels, funding from an increase to the Passenger Movement Charge will contribute to the cost of biosecurity, and cost recovery will be expanded to include the biosecurity clearance of parcels and non-letter mail. The charge will increase by $10 from mid-next year and apply to all passengers departing the country.

“Importers will contribute more fairly through their clearance costs with increased fees and charges expected to take their total contribution to biosecurity costs to almost $350 million next year,” Mr. Watt said.

“The Albanese Government will also explore options to introduce a broader biosecurity import levy that is consistent with international trade law obligations,” he said.

“We will also introduce a modest new biosecurity protection levy on agriculture, fisheries and forestry producers – creating a new system that will be more predictable, equitable, transparent and accountable than ever before,” he said.

“We are locking in higher and more certain biosecurity funding, along with a fair system to pay for it that shares the cost equitably between taxpayers, importers, parcel senders, international travellers, and producers.”

Key Federal Budget Measures: Agriculture, Forestry, Fisheries
  • $145.2 million upgrade to digital biosecurity services through a Simplified Targeting and Enhanced Processing System. This is a program of work to bring our cargo management systems into the modern digital age, reducing costs and delays for industry and government. In addition, this will free up biosecurity workers for other jobs and reduce congestion at the border.
  • $40.6 million to continue the Indigenous Ranger Biosecurity Program in Northern Australia – a crucial part of frontline biosecurity monitoring, detection, and response in our north.
  • $302.1 million over five years to support climate-smart agriculture through the Natural Heritage Trust – helping farmers transition to a low emissions future and strengthen agricultural sustainability.
  • $20 million has been committed to implementing the National Soil Action Plan and a soil monitoring program in partnership with states and territories.
  • $38.3 million for ABARES to improve the collection, analysis, and sharing of data on the impact of climate change and low-emission technology on agriculture, to assist policy making and farmers’ decision-making.
  • $127 million to the Department of Agriculture, Fisheries and Forestry – a one-off payment in 2022-23 to ensure the viability of the Department of Agriculture
  • $5 million to develop a renewed Australian Animal Welfare Strategy – to deliver on the Government’s election commitment to update and enhance a national approach to animal welfare.
  • Wood Central will provide further coverage later today.


  • Wood Central

    Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.


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