Wednesday, 23 October 2019
Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019; Second Reading
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 and to move the second reading amendment circulated in my name. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(1) notes that the drought is severe and ongoing; and
(2) criticises the Government for forcing desperate drought-affected farming families off the Farm Household Allowance".
We are, in some circumstances, going into the ninth year of drought on the eastern seaboard, and of course there is not a state nor a territory in the Commonwealth which is not in some way adversely impacted by this drought. If it is not already, it will soon be the worst drought in our history—at least, since the time of European settlement. It is hurting lots of people—not just our farmers but people in rural communities everywhere. The economies of those communities are turning downwards. When the farmer is doing it tough, he or she purchases less in the town and less from the farm supplies business, and everyone is impacted. Of course, many of those communities are also suffering at the hands of terrible bushfires which are, themselves, a function of a changing climate—a hotter climate, a drier climate—a climate which is causing high temperatures earlier in the year than we would expect and a climate which, over time, has produced a lot of unspent fuel sources in and around those communities.
Lots of workers who don't get much mention in our debate here about the drought but should get more mention are all those who work on-farm for farmers and there are many of them. Many of them are now out of work or only getting intermittent work. That doesn't make life particularly easy, because that frustrates someone's access to income support through Centrelink. If they're in and out of work all the time or they're getting fluctuating rates and hours of work then they don't get the support that farmers will receive through this bill and the legislation it is amending. Some of them will be working for the local rural supplier's business or the local mechanic or the local electrician or some other tradesman and are now not getting the work they previously were able to secure because there's less work in the community.
Of course, some of those communities are literally running out of water. Even big communities like Tamworth, Armidale and Murrurundi, in the member for New England's electorate, are all too close to running out of water; in fact, Murrurundi did run out of water some time ago. We are very careful that, in the absence of meaningful rain in the next six months, year, maybe two years or, even worse, three years, we are potentially facing what I'd describe as a war-like situation. Some tough decisions might need to be made about whether we keep moving water to people or people to water, for example, whether there are some commodities that we can save and some we can't save. Some we will need to save with our limited resources and some we won't be able to save. I pray every day that we never face that situation but it's a real possibility. The weather forecasters don't give us any hope of summer rains. They don't give us much hope of meaningful rains through the winter of next year. And, you know, it's easy to come to the conclusion there's no reason to be optimistic beyond that either.
So the government needs to establish and determine some scenarios, like, as I said in the Australian Financial Review this morning, as a general would: assess the geopolitical situation, the risk of war, what the scenarios look like and then build a battle plan to respond to each of those scenarios. This is what this government hasn't done. At least, we're not aware that this has been done. If I am wrong, I will be very, very relieved but, sadly, I suspect I am not. The government needs to be asking itself: 'What do we do if it doesn't rain for another six months? What do we do if it doesn't rain meaningfully for another year? What do we do if it doesn't rain for another two and three years?' As scary as that proposition might be, it should have a battle plan for each. Generals don't wait for the battle to begin before establishing their battle plan; they make their assessments well in advance, they determine the scenarios, and they have a battle plan and contingencies for each. We don't have that in this country and we should have. And again, I hope I'm wrong but there is a possibility that we will be facing some very, very challenging times.
That's why the Leader of the Opposition and I have reached out to the Prime Minister and the Deputy Prime Minister and suggested that, given the severity of the situation, we sit down around a table—all parties—to talk about those scenarios, to assess those scenarios and to think about what will need to be done by government to ensure that the impact on the Australian community is less than it might otherwise be. That offer was extended very sincerely and genuinely, and I extend it again here today. I appeal to the Prime Minister to come to the table. He can have his jokes about the semantics about whether there was a war cabinet or not a war cabinet, or whether it was a war advisory council. The Australian people don't want us talking about or arguing about such frivolous points. What they do want us to do is sit down together, fully comprehend the seriousness of the situation and hatch a plan to do something about it.
The Prime Minister says he has a plan. The drought minister says he will have a plan; he said he will have a plan when the National Farmers Federation delivers its plan. Well, the National Farmers Federation has now delivered its plan, and it's time the government delivered a plan too. National Party MPs, we see in the newspaper today, are frustrated too. They're so frustrated that they've decided not to wait for the Prime Minister; rather, they've hatched their own 10-point plan, sadly cobbled together and every bit as ad hoc as the Prime Minister's approach to drought has been over the last—well, six years for the government, but only a year for him. It's no plan, but the fact that rebellious Nationals MPs are breaking away from their leader and their Prime Minister to deliver their own plan underscores the point the opposition has been making now for weeks, if not months: that we don't have a plan, we need a plan and we need it now.
In fact, we needed it six years ago, which is where this sad story began. Six years ago, on coming to office, the then Prime Minister and former member for Warringah, Tony Abbott, and the then agriculture minister—still the member for New England—decided to put the brake on the COAG drought policy reform process. Imagine that! Prior to that, something historic had occurred. The states, the Commonwealth, the major political parties, the National Farmers Federation and all of their affiliates agreed that the drought architecture we had in this country was not working. It was inefficient, it was ineffective, it was full of moral hazard and it had to go. It's a big call. But they were determined to prepare themselves for the next drought with a policy which was more meaningful, more economically efficient for the taxpayer, devoid of moral hazard and which, of course, built resilient in our farming community. The COAG committee which was charged with progressing that reform was the Standing Council on Primary Industries, a formal arm of the COAG architecture, but it was abolished.
I think the Prime Minister of the day, and those who have followed him—including the current Prime Minister—thought the rain would come. It's a wonderful confidence we see in our rural communities. Farmers tell me almost every time I speak with them, 'Every day is a day closer to rain.' It's an admirable optimism. It's a courageous optimism. It does help to build emotional strength in our rural communities. But the Prime Minister of the day can't be that relaxed. The Prime Minister of the day has to plan on the basis that it might not rain—or, indeed, when it does rain, it might be many, many days away. He doesn't have that latitude and shouldn't take that approach.
What did he and those who served before him do?
They thought they'd just take an ad hoc, piecemeal approach—roll out a program here, roll out a program there—and hope it rained, and rained soon. And then the current Prime Minister thought he'd lose an election. I'm sure he is very happy he didn't—much happier than we are, obviously! I think he believed it would be a Labor problem now, but it remains his problem. Notwithstanding that, the hand of friendship and bipartisanship is there for him, and he should take it.
The other thing he should do is stop claiming he is spending $7 billion a year on drought assistance. People no longer have to take my word for it when I say that that is a shocking exaggeration, a shocking embellishment. Thanks to Senate estimates just this week, that assertion by me has been confirmed by departmental officials both in the agriculture department and in the Department of Finance. We know how he got to that $7 billion. He got there very quickly by including the so-called $5 billion Future Drought Fund, which we know is not $5 billion and won't be $5 billion for 10 years; it's $3.9 billion. More specifically, it's a fund which won't draw down until after July next year. When it begins to draw down money, it will draw $100 million every year.
Now, that's not a bad thing. We support the provision of future funding for the building of drought resilience. We don't have any disagreement with that. That is a good thing, although the money should not have been robbed out of the Building Australia Fund, which itself was dedicated to regional infrastructure. We don't have any problem with the concept or the principle. But not one cent, as confirmed by the Prime Minister right here, at that dispatch box, will go to a farmer. Not one cent will go to a farmer! For the Prime Minister to claim $7 billion by including that $5 billion is being more than loose with the truth. And then of course it includes a billion dollars worth of concessional loans, which most farmers have decided are of no help to them. More debt or shuffling debt, they say, is not going to save the day for them. Of course, the cost for the government of providing concessional loans is quite modest. The government borrows at the bond rate, which is very low at the moment, and provides a concessional loan at a slightly higher rate. I'm not saying there aren't costs—of course there are—but it should not be counted towards the so-called $7 billion.
Of course there are loans to the states for water infrastructure. There are another couple billion dollars there, or just a billion dollars—I can't recall, but it's big numbers—but these are loans to the states which have to be matched by the states. This is why they haven't been particularly successful. The states are under pressure as a result of fiscal vertical imbalance, so they don't have the money to match that. I think the Department of Finance told us that, over the next four years, the government will spend $2.5 billion. That is not $7 billion, not $6 billion, but $2.5 billion over four years. That's being pretty generous too because, again, it depends on how you count some of these programs, which are either designed to fail or contingent on repayments. But, more importantly, they aren't really helping farmers.
I don't mind the Prime Minister being loose with the truth with farmers and rural communities. I'm not happy about it, but, let's face it, politicians do that from time to time; the current Prime Minister won't be the first to be guilty of it. But what makes me genuinely angry is that the $7 billion is used as an excuse not to do more. That's what the $7 billion tool is really all about. When asked whether he'll do more for farmers, the Prime Minister's standard response is, 'I'm already investing $7 billion'—code for, 'I shouldn't really do any more, because $7 billion is a lot of money in anybody's language.' He knows that many Australians who aren't farmers, who might live in the capital cities, love our farmers. They recognise them as salt-of-the-earth, hardworking people who deliver our food and fibre. He wants them to know also that $7 billion is a lot of money, and he lives in the hope that they'll agree that it's not necessary to spend more, because $7 billion is an enormous amount of money. What really makes me angry is that his $7 billion loan is an excuse not to do more at a time when we desperately need to do more.
A good start would be to stop cutting income support payments for Australian farming families. Six hundred families have already been cut off the Farm Household Allowance and another 500 are to be cut off by Christmas. What a wonderful Christmas present for those farming families! Remember, these are amongst the most desperate of our farming families. Farm Household Allowance, be in no doubt, is a difficult payment to secure. Ask the hundreds that have tried and failed, or spent weeks, if not months, trying to succeed. To cut them off now while this drought is ongoing—remembering that we're talking about a very modest payment, sufficient to put food on the table and maybe a little bit of cashflow into the farm business to get to the other end—is a callous act. It's hard to fathom when the opposition sits here and offers bipartisanship. The Prime Minister is not going to get any criticism from us by extending the period for which farming families remain on Farm Household Allowance; in fact we're appealing for him to do so.
For balance, let me tell you what the Prime Minister will argue. It's something we all agreed with back in 2012. We all agreed that the income support payment for farmers, which is just like Newstart but has far more relaxed income and asset test provisions, shouldn't be forever. COAG originally decided that it should be for three years and that, during that period, the farm enterprise and the farming family have to decide how they reshape their business model, or to get out. That was, in 2012, a reasonable proposition. I note that, in one of the earlier amendments we dealt with here, that was extended to four years. But no-one here now, or no-one who was in the conversation then in 2012, could have possibly conceived that the drought would be so lengthy and so harsh.
The test of viability now should not be whether you can get through the ninth or 10th year of the drought. Sure, back then—remembering that Farm Household Allowance isn't just a drought payment; it's a hardship payment typically provided to drought affected farmers—it was reasonable for us to believe that, after three or four years, if the farming enterprise hadn't been able to sufficiently adjust its methods or its business model, it might be time to get out. And there will still be examples of that; there will always be examples of that. But those who are still hanging on in the seventh and eighth year are amongst the viable. The test of viability shouldn't be that you make it to the ninth or 10th year. That's the difference. When the facts change, you change your mind and you change the policy. We should all say together, 'Wow, this is something very significant, something unanticipated, something not expected, something no-one could have foreseen.'
We need to take away the time cap, which is forcing farmers off income support, and park it away until we get to the other end of this drought, and let's all pray that it comes sooner rather than later. I don't think there's an Australian out there who thinks that we should be throwing farming families off income support—a very modest payment—at this point in time. I'm disappointed in those who are publicly disagreeing with me. Amongst them is the member for New England, who outrageously claimed last night on the ABC that to extend farm household allowance to farming families beyond four years would be an affront to our WTO arrangements. You can just see it: the Europeans would be straight on the phone to say, 'You made an agreement you wouldn't have any subsidies, and therefore distortions, in the market.' Imagine them arguing that extending a modest $250 payment to a farmer who is destitute and barely able to keep their animals alive is going to distort the international market. It's not only a ridiculous proposition, but it's a ridiculous proposition to put. If that's the best excuse they can come up with for cutting farming families off farm household allowance, well, God save us all.
We support this bill, just as we've supported every other bill—this is the 12th we've supported. This is the 12th package of amendments to the farm household allowance, and we've supported each and every one of them. And along the way, in this place, in Senate estimates and in the public domain, successive ministers have told us, before the arrival of the next bill in this place, that farm household allowance is perfect and nothing needs to be done. I remind the House that when the member for New England doctored his Hansard in this place—a shocking event that led to the sacking of a highly regarded and respected public servant—it was for an answer he provided to a question I asked in this place about farm household allowance. They've been embellishing—when I say 'they', I mean the government—the effectiveness of farm household allowance, since March 2020, since the inception of the allowance. But here we are, after 12 packages of improvements.
What do these improvements do? Well, basically, three things.