Budget 2018: Govt allocates $85M to fight cattle disease

The government has allocated $85 million of operating funding in the current year to deal with the Mycoplasma bovis outbreak, but a looming report will likely spell out a "significant" bill, Finance Minister Grant Robertson says.

Today's budget added another $9.3 million of operating funding to improve overseas biosecurity systems, and Robertson told media in Wellington the Crown needs to "look at different ways of dealing with biosecurity incursions" which have been on the rise in recent years. Among those is the cattle disease Mycoplasma bovis, which has spread across the country and seen 300 farms under surveillance or lockdown. The Crown is still deciding on whether it can eradicate the disease or should just manage it.

Robertson said Cabinet will receive a report back on the extent of costs, which will show up in the half-year update.

"I have no doubt we will need to spend significant amounts of money to respond to Mycoplasma bovis," he said.

The Treasury noted the biosecurity response to the cattle disease as a policy risk in the budget documents, saying the cost will depend on what response the Ministry for Primary Industries pursues.

"Any approach is likely to be a large-scale response, and the ministry is unlikely to meet operational and biosecurity costs within its baseline," the document said.

That response has been bolstered by an $11.2 million contribution from the local cattle industry.

The primary sector also got a $15 million boost to the Sustainable Farming Fund and a $5 million increase for the Overseer farm management tool, both of which aim to lift environmental practices on farms.

The new policy direction also stripped out and reprioritised $163 million over the four-year period, cancelling subsidies for irrigation and the primary growth partnership and dropping the food export value and trusted trader programmes.

The forecasts project operating spending on primary services of $851 million in the year ending June 30, 2018, amounting to 1 percent of core Crown expenses, falling to $620 million by the 2020 year, or 0.6 percent of total spending.

- BusinessDesk