Wednesday, 22 August 2018
Farm Household Support Amendment (Temporary Measures) Bill 2018; Consideration in Detail
I present a supplementary explanatory memorandum to the bill. I move the government amendment as circulated:
(1) Schedule 1, item 1, page 3 (line 13), omit "1 November 2018", substitute "the day prescribed by the Minister’s rules".
The Farm Household Support Amendment (Temporary Measures) Bill 2018 amends the Farm Household Support Act 2014 to provide up to two lump sum payments and gives a temporary increase to the farm assets threshold to $5 million. This increase was originally planned to take effect from 1 November 2018. However, the government will bring the implementation forward to 1 September 2018.
I'll be introducing a minister's rule to allow people with net farm assets of up to $5 million to lodge an application with the Department of Human Services on or after 1 September 2018. This is a substantial increase from the current limit of $2.6 million. By 1 October the changes to support the implementation will be finalised. As long as all eligibility is met, payments will be backdated to the date of lodgement.
Increasing the net farm assets limit to $5 million enables more farmers to access farm household allowance, remembering that this isn't just income support; it's a complete package of assistance. Bringing the changes forward means that people in need can access the assistance at the time when they need it most and provides benefits not only to our farmers but also to the communities in which they live. I commend the amendment to the House.
The opposition has supported every proposition the government has put forward in this place in order to assist our drought affected farmers in this most difficult time. I refer members to my second reading contribution where I outlined what I believe are the deficiencies in the government's approach and what Labor's alternative approaches would be. Suffice to say that I believe that the government has been a little late to the party on drought assistance and has been somewhat less strategic in its response.
In the second reading amendment just defeated by the government members, including members of the National Party, I did two things. The second proposition was just a general criticism of the government's approach to drought assistance, but the first was an invitation to the government to allow eligible farmers to secure the up-to-$12,000 payment in the first tranche. That is, rather than having the payment happen in two tranches, over the last quarter of this year and the first quarter of next year, we don't see any reason why drought affected farmers facing dramatic cash flow problems and growing debt shouldn't be able to access the full payment up front.
A number of things have made me somewhat curious about these changes to the farm household allowance. They remain a little bit of a mystery to members of the opposition. The first is the very amount. How were the $12,000, $6,000 and $3,000 amounts arrived at? What assessments did the government undertake to determine they are the most appropriate amounts to go to farmers? More important is the logic behind the split. Why is it $6,000 over two tranches rather than $12,000 up front? Then there is the timing of the applications. I would ask the minister, if he can, to provide responses to those questions. I would also ask him how many farmers are currently the recipients of farm household allowance. I understand it's in order of 1,700 or so farmers. More particularly, what is the fiscal impact of the amendment that he's moved this morning? We have another example now of the government moving amendments to its own legislation, five minutes after that legislation was introduced. I further ask him: what is the actual impact of the amendment that has been put forward today in terms of the recipients securing the payment?
There are those who will be now able to apply because of the increase in assets test. The original application date—the date the application opened—was 1 November. The first question to the minister is: why was it 1 November in the first place? Why will it now be 1 September? The opposition has no difficulty in allowing farmers easier access to the payments. In fact, that has been our criticism for four years: the difficulties farmers face in securing income support. But why is it now 1 September when it was originally 1 December? Why was it 1 December? Are there any impediments, notwithstanding the new application date, in delivering those payments to farmers? In other words, will the move from 1 December to 1 September ensure farmers get the payment any earlier?
Bringing the date forward was on the advice of the Department of Human Services. In essence, we now believe we can get these payments sorted. There are two elements to it. The increase in the threshold is from $2.6 million to $5 million, and we believe now, after advice from the Department of Human Services, that we can get this done sooner. We feel it's important that we're able to get this money into farmers' pockets as quickly as we possibly can and get the money flowing through to take the pressure off the wholesale expenses for them so they're able to have a dignified approach to the way they deal with this drought. Couple that with those rural financial counsellors that we've invested an extra $8.4 million in to be able to put more people, more rural financial counsellors, around farmers' kitchen tables. They will help them make strategic decisions about their businesses: how they get out of this drought and where they go after this drought.
This is really about the here and now, and we're doing it in a responsible way and bringing it forward. We're doing it because we believe that we won't cause any impediment to the flow of this money. We're doing it in a responsible way to ensure that farmers can get through this drought with dignity and respect.
I can assure the minister that I'm not trying to be cute or political about the question, but the opposition is being asked to support an amendment put forward by the government to the government's own bill. If we're being asked to do so, I believe it's appropriate to ask if the minister might be able to enlighten us on any fiscal impact that this change might have.
The minister was indicating, possibly, that this means people are only getting money earlier; that may be the case. Given that it appears to be happening in the same fiscal year, that doesn't raise any real concern for us in terms of impact on the forward estimates. But surely the government hasn't put forward the changes without considering the fiscal impact?
And I should correct myself, Mr Deputy Speaker Mitchell: in my opening remarks I was talking about 1 December as the original application date for those who will possibly now become eligible under the assets change. That date is actually 1 November, which will now be 1 September. But my understanding is that the DHS system will not be capable of processing applications for those who, potentially, are now securing eligibility because of the change in the assets test. The process won't allow DHS to process them until 1 October. The question then becomes: why 1 September? And is the ongoing delay, which is system based, posing any threat to the capacity of those who are coming in as a result of the assets test change to secure the first $6,000 payment or $3,000 payment, whatever it might be, depending on their circumstances?
The payment will accumulate from 1 September. The department has advised us that the October date is allowing for that threshold increase to be achieved and delivered with the assessment process that's in place.
In terms of any fiscal constraints, there are none. The government has, prudently, undertaken these measures, along with the other suite of measures that we are putting in place, because there is not just one fix of support in helping drought affected farmers. It's about farmer welfare and it's about preparedness, so the measures that we're putting in place are ones that this government has thought through with a prudent fiscal aspect in mind, and to ensure that they're sustainable and achievable.
The big missing answer, of course, is the logic and rationale behind the split in the payment. Again, we did afford the government the opportunity to change that, or invited them to do so, by way of my second reading amendment, which the government members voted down. So they must feel quite strongly that the payment should be phased in over two periods. That still remains a mystery to me.
If the government believes that farmers aren't sufficiently fiscally responsible to be trusted with the $6,000 to $12,000 payment up-front, well, that's a reasonable argument to put; I invite them to do so. If they have an alternative rationale behind splitting the payment, then I also invite the minister to put that forward. Labor is of the view that farmers need cash and they need it now. The government has acknowledged that, both by changing the assets test and by putting in place this supplementary payment. Many of those farm households have large credit card debts accruing relatively large amounts of interest, and that is happening right now. And so the opposition is still struggling to understand, given that there seems to be minimal fiscal impact and given that it's all happening in one fiscal year, why the government wouldn't give the worst-affected farmers, the farmers who are struggling now, the opportunity to secure that $12,000 payment up-front.
I remind the House that it was the Prime Minister who responded to this question on national radio, saying that March is not too far away. Well, March is a long, long way away if you've been subject to one of the most severe droughts in our history and if you are struggling to put food on your table. The minister has acknowledged that this payment is not for feed, fodder and like farming needs; it is about putting food on the table and about paying the bills. I trust farmers to spend that money responsibly. They hardly have an option if they are unable at the moment to meet their basic cost-of-living needs. So it remains a mystery to us still why the government hasn't accepted our invitation to make that change. It's not too late. The minister could do that today. We'd be happy to adjourn the debate so the paperwork could be done. If he's not prepared to do so, he might at least share with the Australian farming community why he's not prepared to do so.
Thank you, the member for Hunter. This payment is to go towards household expenses. As you would know and all Australians would know, household expenses are constant, and splitting this into two payments in essence six months apart means that we're able to give that extra payment at two different times of the year. But it also needs to be acknowledged that the fortnightly payment will continue in between so there is continuity of payment as we continue to move through this. This is about making sure that we are able to address the household expenses. The government's responsibility through the intergovernmental agreement on drought with the states is around human welfare. It's not around animal welfare. It's not about fodder and freight. This is about the daily expenses of our farmers, and they are spread out across the year. So in that essence, the government made the decision that there should be two lump sums paid over a different period, that will complement the up to $538.80 a fortnight a family could receive in one payment. So this is about making sure that we understand that these are constant expenses, not one single expense.
I apologise to Channel Seven's David Koch because the Prime Minister's remarks about March not being too far away were in an interview with him, not on national radio as I suggested. I'm bringing this to a close now. I assume that part of the changes in timing are about the capacity of those who are coming into farm household allowance for the first time because of the change to the asset test threshold enabling them to secure the first $6,000 payment. I ask the minister what risks still remain other than their capacity to get their own paperwork in order. What risks remain to them being denied the first $6,000 payment? In other words, we have people coming in, possibly for the first time, because of a more generous assets test, and their application is now allowed to be lodged on 1 September. I still understand there are some processing difficulties, which will delay the processing of those applications. The opposition remains concerned that those people might still be denied the $6,000 payment—that is, the first tranche of the supplementary payment—through no fault of their own.
The reality is that we understand that there has been an uplift in applications, and that's a good thing. I would say to every Australian farmer not to self-assess. The fact that we are putting more rural financial counsellors on the ground to assist you in terms of undertaking the application is an important step. We're also reviewing the application itself to try to streamline it. The reality is that that does take time. We're working through that as quickly as we can and we're working as practically as we can with the Department of Human Services to make sure that we can expedite as many applications, and resources within the Department of Human Services, as I understand, have been deployed to ensure that this increase in demand of application is able to be assessed in the appropriate time. It is also worth remembering that any person that falls outside the criteria for the farm household allowance can still apply under hardship provisions, and it's important that farmers understand that as well. That is why engaging a rural financial counsellor is so important in this process. They can guide and assist you through the whole application. If for some reason you fall outside one of the guidelines, there are still hardship provisions within the FHA to enable you to apply. This is about making sure the accessibility is there. We are doing it in a responsible way. This amendment is about providing an opportunity, where we have seen that we can deploy extra resources in the application process, to get that money out quicker and in a responsible and methodical way.
The minister is now creating new questions for me. The minister made reference to a take-up in demand. Can he enlighten the House about any changes in the volume of applications since these announcements were made?
I don't have those numbers to hand, but I am more than happy to share them with the parliament and the member for Hunter. And that is something that we will continue to be prepared to make public. I think it is important that we all have a responsibility to share with the farming community that it is okay to ask for help—not to self-assess—and come forward. Your government, and this parliament, will support you through these times of hardship. I give an undertaking that I will provide those numbers.
I will close by acknowledging the minister's cooperative approach on these issues and the briefings his office has provided to me through the course of this debate.
Bill, as amended, agreed to.