RURAL Australia has emerged relatively unscathed in a "give and take'' federal Budget, which slugs the well-off to pay for big spending on infrastructure and pensions.

Farm leaders said the Budget - which forecasts a record deficit of $57.6 billion and a million unemployed next year as the global recession bites - was “good and bad'' for the bush.

All drought support measures will continue with more than $503 million earmarked for 2009-10.

The bush will get a $21-billion, six-year boost in rail, road and port spending, while irrigators in the southern Murray Darling Basin will get access to $300 million over four years for on-farm irrigation upgrades.

There are more generous tax concessions for small business, and grants for Victoria's bushfire victims will be exempted from income tax.

Many regional communities will benefit from a $134 million, four-year plan to improve incentives for doctors to work in the bush, better mental health services and new infrastructure.


Farmers can look forward to getting ready access to seven-day weather forecasting information as a result of a $78.5 million, five-year upgrade for the Bureau of Meteorology.

And there will be continued funding for border quarantine protection of $156 million next year.

On the downside, rural research funding has been cut by $58 million over four years, focused totally on two rural R&D corporations - Land and Water Australia, which will be wound up, and the Rural Industries R&D Corporation, which will lose $12 million over four years.

There is provision to bring forward an additional $100 million next year, and $150 million over the subsequent two years, to accelerate water buy-backs in the Murray Darling Basin.

There is a crack-down on hobby farm tax breaks, but this has been limited to those on incomes of more than $250,000.

The other main savings are efficiency cuts of about $3 million a year in the federal agriculture department - the bureaucrats will have to do more with less and some could lose their jobs.

National Farmers' Federation acting president Charles Burke said the Budget's impact on the bush was a “bit like farming and the weather - it has its good and bad parts''.

The $300 -million on-farm spending was welcome, but only went "some of the way'' towards a re-balancing away from water buy-backs, he said.

Spending on roads and ports would benefit the bush but the NFF was disappointed there was not more for rural rail upgrades.

Continued drought support was important, as was the decision to defer future policy reform. “It's better to wait to get drought policy right rather than have a half-baked package.''

But Mr Burke said the NFF was also "bitterly disappointed'' with the cuts to what was already a "thin spend'' on rural R&D.

"And it certainly sends a very bad message to Australian farmers that we are expected to overcome the negative impact of climate change with less R&D.''

Mr Burke said the NFF welcomed the small business tax breaks and the extra money for the BoM, but questioned why $464 million was being spent on overseas food security.

"Surely this money should have been spent in Australia first and foremost,'' he said.

The Victorian Farmers Federation said the budget was a "mixed bag" for the state's farmers.

The VFF welcomed commitments to water and road infrastructure projects and concessions to small business, but said it was disappointed with a lack of investment in rail freight upgrades and cuts to research and development funding.

VFF vice-president Andrew Broad said while commitments had been made to rail funding in metropolitan areas, the VFF was disappointed there was still no long term commitment to national regional rail freight.

“Farmers have long maintained that rail should be the preferred option for intrastate commodity freight transport - the bottom line is that it is cheaper, cleaner and more efficient," Mr Broad said.

"The VFF has said that rail standardisation should be an essential component of our national transport plan."

Mr Broad also said farmers were unhappy with cuts to agricultural research and development.|

"The closure of Land and Water Australia and cuts to the Rural Industries Research and Development Corporation will ultimately mean that less scientific research is being put into the critical climate challenges ahead for Australian farmers," Mr Broad said.