Federal budget a welcome boost for regional food and grocery manufacturing

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Media Release By Australian Food and Grocery Council.

The Australian Food and Grocery Council (AFGC) welcomes the support for regional manufacturing delivered in tonight’s Federal Budget. The $2 billion Regional Accelerator Program (RAP) announced in the budget provides important support to regional food and grocery manufacturers, who employ 40 per cent of this $132 billion industry’s workforce.

AFGC CEO Tanya Barden said the targeted funding will strengthen regional food and grocery manufacturing with measures including a $500m boost in funding for regional business through the Modern Manufacturing Initiative (MMI) and a $200m increase to the Supply Chain Resilience Initiative.

“The past two years have underscored how critically important a strong, sovereign food and grocery manufacturing industry is for Australia. The support for regional manufacturers, who are major employers and providers of essential items, is a significant boost,” Ms Barden said.

The AFGC welcomes the further $328.3m provided for the MMI’s six national manufacturing priorities over the next five years, however notes that this is inadequate given the investment challenges faces by the food and grocery sector. Food and beverage manufacturing was identified as one of the six priorities and the AFGC has developed a vision for doubling the size of the industry by 2030, which requires significant capital investment. The Budget’s projected fall in non-mining investment after 2023 is of concern and will need attention if we are to grow the future productive capacity of the Australian economy.

Ms Barden commended the federal government on delivering a responsible budget while supporting the Australian community and businesses through the challenges of COVID-19 and natural disasters.

“This budget comes as Australian food and grocery manufacturers face unprecedented costs, inflationary pressures and disruption,” Ms Barden said.

“It is pleasing to see the government has delivered a deficit that is considerably below forecasts while introducing measures to support consumers and shore up Australia’s supply chains.”

The AFGC represents Australia’s food and grocery manufacturers, who together employ the nation’s largest manufacturing workforce and comprise 16,000 businesses employing more than 270,000 people.

Image Credit: Australian Food & Grocery Council.