Sophie Mirabella (Indi, Liberal Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (2007 Measures No. 6) Bill 2007. The minutiae of tax laws do not usually bring a great number of speakers from either side of the House rushing to speak, but in this instance I am particularly keen to make a contribution. I want to focus on schedule 2 of the bill, which has a direct impact on a number of constituents in my electorate, which contains the last remaining significant tobacco-growing area in Australia. This measure impacts significantly on very many families and individuals and, indeed, on a tradition and culture that is deeply rooted in the history of the north-east Victoria.

The assistance package contained within this amendment, the Tobacco Grower Adjustment Assistance program, provides grants to help tobacco growers re-establish in alternative economic activities. The scheme assists tobacco growers to change careers following the effective closure of the industry in October 2006. Growers in north-east Victoria voted decisively in Myrtleford, at a meeting of the Tobacco Cooperative of Victoria, to cease growing tobacco and to accept a buyout of their existing contracts with tobacco manufacturers.

That decision having been made, foreshadowed government assistance became available. The final vote, which was overseen by the Australian Electoral Commission, saw 118 growers vote in favour of exiting the industry, with 12 growers voting against, being a 91 per cent vote in favour—well in excess of the 66 per cent required under the constitution of the Tobacco Cooperative of Victoria. It was an extraordinary event. It was a very emotional time for many families, having grown tobacco for several generations—it being, as I have said, an integral part of the culture and identity of that part of north-east Victoria.

Sadly, many families had come to the realisation that there were many factors working against the industry. A significant factor was the escalation of professional crime gangs getting into illegal tobacco, more commonly known as ‘chop chop’. It had reached a point where the personal fear had become too much for many people. I empathise with those families. I understand—obviously not as directly as they do—some of the pain and trauma that many of them went through in reaching this decision.

The package is not intended to be a share buyout. As has been mentioned, grants are capped at $150,000. Similar impacts were felt by North Queensland growers and dependent communities when manufacturers ceased purchasing Queensland-grown leaf in 2004. The high capitalisation of tobacco-specific equipment has made it very difficult for many affected growers to re-establish alternative operations. The focus of the package is therefore on helping tobacco growers to move into alternative agricultural operations or other businesses. In turn, this will boost confidence in the many rural and regional communities that have traditionally been dependent on the tobacco-growing industry and associated industries and businesses. It will also complement other Australian government initiatives to reduce the trade in illegal tobacco.

The $150,000 cap is higher than that available for other government rural assistance programs. For instance, the Sugar Industry Reform Program had a maximum grant of $100,000 and the government’s Farm Help program has a maximum grant of $75,000. In addition, assistance under these packages is subject to an assets test that does not apply to the assistance available to tobacco growers. Usually this type of government assistance payment for those carrying on a business is treated as ordinary income under the Income Tax Assessment Act 1997 or as a bounty or subsidy under the same act.

Farmers who give an undertaking to leave agriculture altogether and not become an owner or operator of an agricultural enterprise within five years of receiving the grant will be eligible for a tax-free grant. Those who remain in agriculture will find that their grant is assessable for income tax purposes. I advocated to change this, wanting to have all grants tax free, but being in a democracy and only one of 150 members in this House, I was unsuccessful. The government assistance to Victorian tobacco is on top of the $14 million provided to local growers by tobacco manufacturers as part of the buyout of their remaining two-year contracts.

Recently we have heard news of the other possible major investment by an Albury company in the old tobacco cooperative storage sheds and buildings at Myrtleford, which may involve millions of dollars of investment and hundreds of jobs for the local community. That would be a great outcome for Myrtleford, which has gone through a difficult time not only with the effective closure of the tobacco industry but also with drought and fires. If this deal were to be clinched, it would be most welcome for the Myrtleford community and there would be a great sigh of relief.

As anyone associated with the industry well knows, during my tenure I have worked extremely hard to try to keep it viable, eventually as an advocate, at the request of the cooperative, fighting for a fair compensation deal for growers. I have had the great pleasure of working with two extraordinary chairs of the Tobacco Cooperative of Victoria, the first being Angie Rigoni and the second being John Muraca. They are truly decent men of integrity, who worked hard, often against the odds, competing with forces beyond their control, on behalf of families who have grown tobacco for many generations. It has been my pleasure and privilege to have worked with them. I thank them for battling through, often putting up all sorts of threats and considerable difficulties—illegal aspects of the industry. Their families have been through a lot. I hope this assistance package will go some way to helping them move forward to exit the industry with some dignity, which was the main concern of the most recent chairman, John Muraca.

The bill implements a very important measure which will benefit a significant number of former growers in my electorate. It will assist them to exit the industry with dignity. It will assist them to move on with their lives. I commend the bill to the House.

See this speech in context