Wednesday, 23 October 2019
Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019; Second Reading
I rise to support the original motion, that the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 be read a second time. This gives me an opportunity to speak not only on the changes that we are making to farm household assistance but also on the general package of drought assistance that we are offering to Australian farmers and Australian communities at this time.
Recently, in South Australia, the agricultural paper the Stock Journal asked in a survey if the federal government was doing enough on the drought. Eighty-five per cent of the respondents said no. This was put to me at a Q&A panel in Jamestown at the local show. They said, 'How did you respond to that?' I said, 'Did any of the 85 per cent actually suggest what we should do?' I'm a farmer by trade. I spent 30 years farming before I came to this place and I don't find farmers coming to me and saying, 'You should do this. You should do that.' Generally, people who are not in the farming business are offering comments and suggestions to government, but not specifics. I note Fiona Simson from the National Farmers Federation has also said we need a national drought policy but is actually very scant on the detail and what that national drought policy should look like.
I would maintain that we have a national drought policy—a very extensive national drought policy. I'll come to that later in this speech. What we seek to do here is amend the farm household assistance program. Since 2014, we have put $365 million into this program and 12,700 farming households have benefited from that. Farm household assistance, as the previous speaker, the member for Hunter, said, is a pretty low payment. It's at the Newstart level. But it is about putting food on the table, making sure the kids can go to school with shoes on their feet, making sure they get to school, and paying the electricity bills. It's not about supporting the farm operations. There are other things in place to try to do that. It's about giving people dignity, a reason to get out of bed in the morning and making sure their families are running correctly, and that makes it a good payment. The difference to Newstart is that they don't have to report for work; they can get on with running their farms.
We have continued to adapt this program through the drought as the drought has altered. The previous speaker, the member for Hunter, said, 'Who could have imagined that we'd still be in drought in 2014?' That would seem to suggest that, as the drought has become deeper and deeper in places we wouldn't have expected it, we had to adjust the program. Last year, we gave $12,000 of support to affected households in two payments—$6,000 in each payment. We increased the asset threshold to $5 million. You can have a net worth of $5 million and still apply for farm household support. Quite rightly, we assess that, if you've got $10 million of assets, you should be able to borrow some money to support your own household. I don't think that's an unfair parameter.
In this bill we also seek to extend the access to farm household assistance from four years in the life of the person, or in the life of the entity, to 10. The member for Hunter centred on this particular criteria. It is a significant improvement from when the Labor Party introduced this legislation, when it ran for three years—for a lifetime entitlement, if you like. For those who can access the full amount for four years, we're putting in place a $13,000 payment to allow them to adjust and get on with their life. We're also increasing the off-farm income from $80,000 to $100,000. This would mean that, for instance, a farmer's wife or husband—who might be a school teacher or might work at a bank, or whatever it might be that they do to support the farming operations and the family—are not costing them the ability to quality for farm household assistance. That is a reflection of wages in the community—the reality of what many of these farming families do to make sure that their enterprise is viable. There you go. I farmed for 30 years and spent the whole time being married to a school teacher. Many people have said in the past that it's the best way to drought-proof your life: marry a school teacher. I take my hat off to the people who go off-farm and earn income to support the farming operation and the family. It's not easy—we all pay a penalty for it—but it's a way of making sure that your family and your operations are viable.
I'm very pleased about the fact that we are now allowing the income from agistment to be included in farm income rather than off-farm income. I was approached by a constituent, a farmer, about this exact circumstance. He had destocked his farm and was a cropper. He brought sheep in on agistment to allow the neighbour to access some feed and to bring him a modest income, but that denied him the right to apply for farm household assistance. We're fixing that.
The government is making the forms and the process of applying for farm household support easier by making sure that people are addressed as an entity rather than as individuals. All these are good things; it all helps. We are also, through the Drought Community Support Initiative, making up to $3,000 cash payments available to families through organisations like the CWA, the Salvation Army, St Vinnies, and good on them for being back at the coal face, helping the government to deliver support and obviously adding their own support. They're on the ground, they know the communities they live in, and I thank them all for their efforts.
Across the board, the government has a wide range of initiatives. I spoke earlier about how I believe we do have a very good national drought package. Apart from the farm household assistance, we provide funding for the National Drought Map, which is on the FarmHub website. This map gives farmers the ability to go in there and have a look at what's available. I speak to a lot of farmers—most of my best friends are farmers—I live in a farming community, and a lot of them are unaware of what's available. It's only a click away on the computer but they're still unaware, so the more places we can present this information, the more times we can tell them to go and consult with their rural financial counsellors, the better. We announced another $5 million to support the counselling service and that puts another person in my patch, in the electorate of Grey, as a rural financial counsellor. The message again and again to farmers is do not self-assess. But we do put that information up there on the FarmHub.
The government has put almost $30 million extra into mental health and wellbeing. The loans is where the federal government really steps into place to make sure that people are there to put another crop in, to make sure they come to another shearing. We have low-interest drought loans, we have low inter-business improvement loans, we have—and I think these are very good—low-interest replanting loans. Importantly, with these, there is no interest payable by the farmer for two years. That means they can borrow the money for the fertiliser, for the chemicals, for the cost of putting the crop in and for the fuel. They can grow a crop, they can sell the crop and they can receive the money for the crop before they have to pay any interest on the low-interest loan. The same thing applies to restocking loans. Once it has rained and they've got feed in the paddocks, a farmer can go and buy stock—they'll be expensive—with these restocking loans. They can buy themselves some calves, grow them up, get them onto the market, sell them and get the money before they have to pay the interest. I think that shows very good sound judgement. They are good sound loans to farmers. They continue to say: 'We don't want a handout; we want a hand up.' Low-interest loans, loans where you don't pay interest for two years, are all about providing a hand up.
The government is offering grants of up to $2,500 to implement the introduction of multiperil crop insurance and single-peril crop insurance, for instance. We have new insurance products. A lot of organisations and a lot of farming groups are working very hard across Australia to try and make multiperil crop insurance the norm rather than the outlier. We're putting up $2,500 for the base level business case because, if you take out multiperil crop insurance, you have to show to the insurers how much your farm has been producing over a long period of time.
Because the government recognise that farmers are not the only people that suffer during the drought, that the community suffers as well, we've established the Drought Communities Program. In my electorate of Grey, we've had 20 councils qualify for these grants of $1 million each. Things like sporting clubs, community facilities, community assets, water-harvesting programs, town halls, showgrounds, visitor centres have all benefited from this program. Importantly, this provides some sustenance to the local tradesmen, the people in the town, the people who do the work, because we recognise they're not getting the same level of work as before the drought, because the farmers have closed the cheque books on discretionary spending. I have talked about the rural financial counsellors.
We've also got programs for building resilience, and this is actually what I think is the visionary stuff. The best program I have ever seen as a farmer that helps farmers prepare for inevitable drought, is the farm management deposits. Recently, two or four years ago, we lifted the limits so now an individual farmer can take, in a good year, $800,000 off the top of the profits, stick it in a bank account and take the tax deduction. And for a partnership it's $1.6 million. They can put it aside, not for a rainy day—or perhaps it can be for a rainy day—but for a dry day. It's drought insurance. I checked about half an hour ago and the last figure we had for farm managed deposits Australia-wide is still increasing. For drought, farmers have saved up $6.7 billion. So, while some are facing difficulties now, many with the support of the Australian taxpayers and the Australian government, have accumulated funds so they don't have to call on the public purse when it comes to dry times.
We have immediate deductibility for water and fodder infrastructure. A farming family I know had two huge hay sheds full of hay before the drought. Last year, as the hay prices climbed, they sold it all off. A lot of the hay went to the eastern states. I was talking to the owner, one of the operators and he said: 'You know what we're going to do? We sold off our two lots of hay at good profits and kept hay for ourselves, and now we're going to use that money to build another hay shed because we get immediate tax deductibility of that asset. Next time, when it rains, we'll have three hay sheds full of hay.' This will expand the ability of all Australian farmers to withstand the drought because it will mean there will be more hay held in storage in Australia when it comes to the next drought. It's the same for investment in water infrastructure. There are 13 properties that I'm aware of in the Eyre Peninsula where farmers have invested in plastic water runs so they can harvest every drop of water, every drop of dew that runs off that particular area. It increases the efficiency of water runs by hundreds and hundreds of per cent. Water priced at $3.50 a kilolitre could make an enormous difference to the bottom line of the farm.
We've got the capital purchases, the immediate write-off of items up to $30,000 and $3½ billion for dams, weirs and infrastructure. We currently have $3.9 billion in the Drought Future Fund, and the member for Hunter spoke about this. It will return $100 million a year just for the kinds of projects I've been speaking about—building infrastructure, backing capital investment, building on ideas and investment for the future so farmers are better adapted to deal with the dry times in the future.
One of the things we've invested in for a long time in Australia is research and development, particularly the GRDC for the grains industry and the ALMC for livestock. I look at my property now, which is in a drought that's at least as bad as 1982, which is the worst drought in my memory, and there's no moving soil. The ground is all tied down. We don't have moving soil because we changed the agricultural practices that operate in Australia, and we changed those on the back of the fantastic research we've done in this country which has backed farmers to grow more grain out of less rain and ensure they can look after our soils for future generations and Australia generally. That comes from the long-term practice of governments setting good infrastructure frames in place.
I say we've got a fantastic national drought policy. I refute the claims of people who say we do not.