Monday, 29 July 2019
Farm Household Support Amendment Bill 2019; Second Reading
The Farm Household Support Amendment Bill 2019 will amend the Farm Household Support Act 2014 to maintain the farm assets value limit at $5 million. It will also amend the treatment of income from business, such as allowable deductions that can be claimed against related income—that is, either income from the farm enterprise or income from a business other than the farm enterprise and income earned by the farm household allowance. The farm assets value limit was set at $5 million until 30 June 2019 and this bill will put it in place infinitem.
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 criticises the Government’s lack of action to assist drought-affected farmers including those who have experienced difficulty accessing the Farm Household Allowance since the scheme’s commencement in July 2014'.
This bill is the most recent example, despite what the minister was just saying at the close of question time, of this government's clumsy and protracted and inadequate approach to drought policy. The debate today follows the Prime Minister's less than inspiring address—nor was it encouraging—at the recent Bush Summit in Dubbo. There he did his best on the spin but all he could promise was yet another parliamentary inquiry. Sadly, it is the same inquiry we had last year—and the government still hasn't responded to the recommendations of that inquiry.
To be fair, there was one announcement which I did welcome. Major General Michael Jeffery was first appointed to the position of Soils Advocate by Julia Gillard in 2012. On the occasion of that announcement, in a keynote address to the National Farmers' Federation congress, Prime Minister Gillard expressed her concern about the deteriorating state of our soils and her determination to give policy priority to productivity-enhancing soil rejuvenation. Michael Jeffery has done a very fine job over the last six years. His comprehension of the challenges that we face is considerable. His various reports have been weighty, helpful and impressive.
Sadly, though, the government has continued to give no more than lip service to the work of Major General Jeffrey. The Michael Jeffery story is, I would argue, emblematic of the 'all-talk and do-nothing' nature of this government. We've had the drought envoy. We've had the drought coordinator. We've had the drought task force. We've had a drought summit. We've had a drought committee. And now we're going to have another committee. Part of this bill relates to a recent independent review of farm household allowance. The Prime Minister, in Dubbo, was still talking about what his government might do about that review sometime in the future. This is six years after the 2013 election and this is the government's third term in office.
The reality is that, after all that time, the Morrison government still has no strategic overarching plan for drought policy in this country. And yet it was gifted such a wonderful opportunity to have such an architecture. May 2013 was a historic month. The Commonwealth, the states, the country's farm groups and both the major political parties all agreed to effectively tear up all of the existing—and failing—drought support arrangements and start the process again. This miraculous consensus was put in place after a 2008 Productivity Commission review into the effectiveness of drought support in this country—and very expensive drought support it was.
The intergovernmental agreement signed that month heralded a new era of optimism among politicians and farmers alike. For the first time, an emphasis was to be placed on the management of our natural resource base, drought resilience, preparation and long-term sustainable profitability. It was also agreed to continue to have an income-support system for farmers in need—not just those affected by drought, but farming families who had hit upon hard times regardless of the cause. That payment, the farm household allowance, is the subject of this bill.
Sadly, though, having secured that historic agreement and a united determination to progress a new framework for drought policy, the Standing Council on Primary Industries was abolished. The then minister, the member for New England, abolished the very committee, the COAG committee, which was charged with progressing the reforms necessary to put in place an architecture to replace all of those programs which had been agreed should go, all of those programs under the program commonly known as exceptional circumstances.
So, sadly, the drought reform program was almost dead before it was born, because the member for New England pulled the rug out from under the very platform designed to give effect to those reform. By October 2014, in the face of worsening drought, it had become clear that the farm household allowance was not delivering for farmers. The reality is that, other than some hype over some concessional loans, which of course cost the government next to nothing and which are not always a helpful option for farmers, the farm household allowance was about the only thing that the government had going for it back in October 2014.
But there began one of the many scandals of this government's time in office. The member for New England was asked a question on that day about the effectiveness of the government's drought assistance package, and Minister Joyce told the House this about the farm household allowance:
… it is not the case that you apply for the money and then you have to wait for your application to be approved … You actually get the money straight away.
Of course, that was patently wrong, and we knew it was wrong at the time. So, we checked the Hansardand we discovered that what was in the Hansard did not reflect what the member for New England told the House in question time on that day. The great sadness about that, of course, is that not only had he sought to outrageously doctor the Hansardbut it demonstrated that he was completely out of touch with what was affecting farmers so much—that is, how much difficulty they were having accessing this household support payment.
To make that saga even sadder, the whole incident of what became known as 'Hansard-gate' cost the head of the member for New England's department his job. His crime was to stand up for his professional public service. His concern was that his public servants were being dragged into Hansard-gate. I quote from Dr Grimes's letter to the then minister dated 2 March 2015:
I am writing to advise you that I no longer have confidence in my capacity to resolve matters relating to integrity with you. This follows the sequence of events before and following the alterations to Hansard that were made in October 2014.
As I said, what had concerned Dr Grimes most of all was the way in which the minister's failure to take responsibility for the Hansard changes—and, indeed, the cover-up of the matter—had caused his staff to be drawn into the scandal.
I thank the minister. I've been listening to the debate very carefully. I think that up until now the shadow minister has been in order, but I fear the direction that he's about to go in may cross that boundary. I will listen to him further.
We shall see, Mr Deputy Speaker, we shall see. There is evidence in Dr Grimes's letter where it says:
I have been very careful to avoid having officers of the department involved in any of my recent decisions relating to the Hansard matter.
This comment highlights the extent to which the former minister was involved in covering up his Hansard changes. It is with deep regret that Dr Grimes paid the ultimate price, and worse that such a shameless attack on a senior and respected public servant was condoned by the Prime Minister of the day. The precedent we will now all live with—
The shadow minister may pause for a moment. I think you've now crossed the boundary that I was talking about. And, in any event, you've made the point that you were seeking to make, and I invite you to come back to the substance of the bill.
I will be very happy to. So one might have thought that the events I just referred to might have caused the government to pay more attention to the failings of the farm household allowance. I would have thought that the best way to scramble and rebuild some political capital following those events might be to accept that the farm household allowance was broken and to do something about it. Remember: we're talking about 2015—or 2014, if you're talking about the beginning of those events. And here we are today, still fiddling with the farm household allowance.
The opposition will support these changes as they will do no harm and will help a few. But they don't fundamentally change the complexity of the farm household allowance. They basically ignore the bulk of the recommendations of the independent review of the farm household allowance.
Back then, I would have thought that the government might have also paid some attention to what our rural financial counsellors were saying, because what they were telling me was that the system was broken—and, indeed, they've told me that it remains broken until today, because I've met with them in recent months. Surely they were telling government ministers the same thing. So I can only conclude that they were ignored. I can't imagine how happy they were when Minister Littleproud kept telling farmers: 'Go and talk to your rural financial counsellor; they'll fill out the paperwork for you'! Well, that's not their job, and they'll be inundated with farmers who are trying desperately to secure this payment but are unable to do so because of the complexity of the paperwork.
Let's fast forward now to May 2018. Labor was again asking questions in the Senate—still. In May 2018 we were being told up until this point: 'There's nothing wrong with the farm household allowance; nothing to see here'—that it was just fine and that thousands of people were benefiting from it. But by now the minister in the hot seat was conceding—this is in Senate estimates—that there were both new and emerging issues with the farm household allowance. So there we were, in May 2018, with acknowledgements that things were still going bad—and, indeed, that new problems were emerging, as cattlemen, for example, turned off stock. But here we are in July 2019 still fiddling with farm household allowance.
At that point, the Senate committee was inquiring into the then recent review of the intergovernmental agreement on drought reform, the agreement that states and territories entered into with the Commonwealth to progress drought reform right back in 2013. So finally we're having a review into the intergovernmental agreement! It wasn't much talked about—what happened to the vehicle charge with implementing the agreement and further progressing reform; but that is another story.
In estimates in May 2018 Senator Chris Ketter—who was doing a fantastic job, I should say—asked:
Were concerns raised in the review about farming families that have exhausted the Farm Household Allowance and are still facing drought conditions?
Extraordinarily, when Senator Ketter asked that simple question, of whether they were hearing from people who were now being forced off farm household allowance because they'd exhausted the maximum period available to them, the official responded:
I would have to take that on notice. I do not recall them.
Well, that certainly energised the then chair of the Senate committee, the colourful Senator Barry O'Sullivan, who intervened:
I can help you. The answer to that is 'yes'. It is very widespread.
Have a think about that: we had government officials—obviously, with the minister looking over their shoulder—saying, 'No, we've had this big review, but no-one's raised this issue with us,' but we had a member of the LNP, the chair of the committee, completely contradicting that statement and sharing with the committee what we've been saying for a long time, and that is: people continue to have extensive problems with this allowance and the way it has been implemented.
Let's fast forward again, this time to October 2018. By now, the relatively new Prime Minister is like a rabbit in a spotlight. He realises that not only is the drought getting worse but it's becoming clear to most farmers, if not all Australians, that in the period from 2013 to October 2018 this government had not put in place anything adequate to address the pain that drought-affected farmers are going through. What does he do? In the absence of any other ideas, he has a drought summit. Great! Very exciting; a big do down at Old Parliament House, with the usual people invited. We knew in advance what was going to be said, because we fully anticipated people would be trying to tell the government the same thing they had been trying to tell it since 2013—that is, we need a more meaningful approach, and more strategic guidance and an overarching approach, to drought policy. But it didn't really matter, because the Prime Minister didn't wait for the drought summit to convene. That morning, rather than wait for any contribution from any of the participants, he decided to announce the Future Drought Fund, which the minister was just talking about in question time. He also, of course, announced another review of the farm household allowance, which I refer back to.
Now, of course, we've had the debate about the so-called $5 billion drought fund. But we know it's not a plan to spend $5 billion; it's a plan to steal $3.9 billion out of another important fund, the Building Australia Fund, which is there to fund and invest in important road and rail projects, particularly in regional Australia. I won't dwell on it too long—we've had the debate—but we're stealing money from Peter to pay Paul. But that's not where the problem is. The real problem is that the drawdown each year is $100 million. When you think about that, that's a lot of money in any person's language. But in the face of the significant challenge we face, it's a very modest amount of money. Already we see a debate emerging amongst the states and territories, who, of course, all have a full expectation now that they will get their fair share of the money. If you distribute it evenly—not that it would be distributed evenly—you're talking something more like $12 million a year. That raises very significant concerns. We don't know where the $100 million is going to be spent. We don't know how much will be spent in each of the states and territories. We don't know what the money will be spent on. The minister—again, during question time—was crying about transparency and accountability, but they were measures forced upon the government by the House of Representatives and the Senate. In any case, they don't give me any real confidence that, as a result of the passage of the Future Drought Fund, we won't end up seeing yet another pork barrelling exercise.
Six years have been lost. People often say to me, 'What would you do differently?' The problem is you can't claw back six years. You can't fix the damage caused after six years of inertia; that is just something we have to live with. But you can stop the spin, and you can at least start talking and thinking about things which are more meaningful. I've said before in this place that we have seen some change in language from government ministers, and, indeed, a change in language from the Prime Minister. In Dubbo, at the bush summit I referred to, the Prime Minister made mention of the importance of increasing our carbon levels in our soils and the impact that that has on our capacity to retain moisture in those soils. It's not something, I believe, that you would have heard from the now Prime Minister even months ago, let alone a year or two ago. I do welcome the change in language, and I encourage the Prime Minister to continue to challenge his own thinking and to pay more attention to a changing climate, adaptation and mitigation, the encouragement of changing farming practices, acknowledgment that we must increase the carbon levels in our soil and the other organic matter levels in those same soils.
The foundation of any drought policy has to be an acknowledgment that the climate has changed and will probably continue to change. It may be that we're living in what is the new normal, that the continent will continue to have more protracted, hotter and drier spells, which will continue to challenge our agriculture sector. So we must mitigate. We need to put the climate wars behind us and come to a settlement on mitigation.
There will still be some who don't believe that countries in aggregate attempting to mitigate can make a difference. I disagree with those people. But I say to them: embrace the precautionary principle, because if the science gets even more compelling in future years, if that's possible, and the climate continues to change in more adverse ways then it will be too late to turn back the clock. As is the case with the matters we're discussing today, it will be too late to act. We need to act together now. We need to adapt too, doing all those things I was talking about earlier: regenerative agriculture, taking care of our landscape, using our water more efficiently and making sure we address the misallocation of our natural soil and water resources—the list goes on and on.
Of course, water infrastructure will be an important part of that equation. We hear, 'Dams here, dams there, dams everywhere', from this government. We've heard it for six years, but we haven't built a dam. Water infrastructure will be important. In office Labor built them—the Tasmanian Midlands Project being the best example.
It probably also means that there are landholders in this country, who are holding properties that have been marginal for a long time which will move from the marginal column to the unviable column. That's the sad reality of the way in which our landscape is changing, which brings me back to the immediate topic of conversation, the Farm Household Allowance.
One of the things that was made clear in the independent review is that there has not been sufficient emphasis on the adjustment side of Farm Household Allowance. Farm Household Allowance, rightly, is not designed to be a support payment infinitum. Farm Household Allowance is designed to help farmers in trouble over a period of time until either they make the adjustment back to profitability—or survivability at least—or they make a decision to restructure their way out of agriculture. That was the agreement of all the states and territories, the Commonwealth and the key farm leadership in this country back in 2013. Yet all the emphasis on Farm Household Allowance has been: how long are you going to be able to get the payment, how much the payment will be, the bonus—remember the Prime Minister talked about the $2,00 to $6,000 bonuses? Again, it's all about the headline. The independent review makes it clear that the government has dropped the ball on the other side of this very important equation, and that is the way in which the Farm Household Allowance is meant to be a tool to help farmers make other decisions, or, indeed, to help farmers train to do something else, which will secure off-farm income for them.
I was very interested to go to the last rising cattle champions awards. Interestingly, the seven finalists from each of the states and the Northern Territory—young people—all had secondary sources of income. They were all heavily engaged in agriculture but all had secondary sources of income, and for many small- to medium-sized players that may be an increasing trend in the agriculture sector. The farm household allowance needed to be used to help people find their way to other forms of income yet there seems to be no emphasis on that despite the recommendations of the independent review.
In its rawest form the review made about six recommendations. The permanent rise to $5 million for the asset test was one of them, and I welcome that the government has picked up on that recommendation, but it made other important recommendations as well and I've seen no sign that the government is planning to pick those up other than the statements recently made by the Prime Minister at the Bush Summit in Dubbo. It's more than passing strange that the Prime Minister has to use the Bush Summit to say that they're still thinking about some of the others. Surely this independent review has been with us long enough—the consultations took place in October last year—for the government to either accept or reject the other recommendations of that independent review. Why it hasn't done so I don't know. I don't know whether they want to drag things out so they can keep making piecemeal announcements in the absence of a larger strategic plan.
I close by saying that I hope the Future Drought Fund is spent wisely. It will be an inadequate amount in the face of the challenge we face in this country—it could have been funded out of appropriations, as we offered to support—but there is an opportunity here to change the direction, to help entities change their farming practices, to lift productivity, which has been flatlining for a decade now, and to establish greater levels of sustainable profitability. On that basis we extend bipartisan support once again, as always. The opposition has supported every drought measure put forward by this government. They would argue that we voted against the drought fund in the House during the last parliament but that doesn't suggest at all that we ultimately wouldn't have been forced to support the fund. We were still seeking to make improvements to that fund.
The fact of history is that the government never ever put the drought fund to the Senate prior to the last election. All these claims that we somehow delayed the drought fund are just untrue. We did no such thing. The government was in control of the legislative timetable. They brought it to the House when they wanted to bring it to the House. They could have easily put it to the Senate prior to the election but for whatever reasons—not political gamesmanship, I hope—they chose not to. I think the drought fund is a sad part of our history now. I think we could have worked together to do this thing much better, but in opposition we continue to support every measure this government takes to assist our drought affected farmers. Farmers in some areas are now facing the worst drought in the history of the nation. The drought fund may give them some assistance beyond 12 months time. Everyone in this House knows that farmers can't wait 12 months or more for assistance; they need assistance now and they should be getting that assistance now. I thank the House.
The member for Hunter finished his contribution with 'the farmers of Australia need to be supported now' and that's exactly what we're going to do. They can't and won't wait for another 12 months for the drought fund to become available. They won't another day and they won't wait another second, because we've been supporting our farmers, who have been in drought for the last four years, every step of the way. When the milk crisis came through northern Victoria, right through the Australian dairy industry, we supported our dairy farmers then. We didn't have a drought fund available, but we didn't wait. The Labor Party have been very deceptive in relation to their language around the $100 million per annum contribution to a drought resilience fund by saying that it's not going to come on stream for another 12 months. It won't, but in the meantime we are going to continue to pour billions of dollars into supporting our farmers in a way that the Labor Party never would.
If you read carefully between the lines of what the shadow minister for agriculture is saying, he is saying that if he had the rudders of power he would do things dramatically different. This is quoting back his words from his latest contribution. He would make sure that any money that was going towards farmers was going to make sure they either got back to profitability or were enabled to exit the industry. The understanding is that it's never that clear cut. It's never so black and white.
When I first came to parliament, the vast majority of the farm household allowances was to make up for the incredible hit that many of our dairy farmers were getting due to the milk price, which dropped from around the $6 mark to $4.40. All of a sudden, a solution that had nothing to do with drought was desperately needed in an area to assist one certain commodity of our agricultural sector. Once milk prices started to improve we were hit with this ridiculous drought. The drought was incredibly short in the northern Victorian regions, but the consequences were incredibly harsh on nearly everybody. The price of water escalated at an unbelievable rate. Never before had the price of water been seen to rise so quickly, to a value far out of the reach of dairy, horticulture and most of the commodities grown throughout northern Victoria. Only certain types of commodities, such as citrus, almonds and table grapes, were able to afford to purchase the water that was currently available.
It's not as simple as the member for Hunter would like to believe. His whole contribution was effectively just commentary from outside, being critical of minister Joyce, when he was in the role; critical of what minister Littleproud had done; critical of what minister McKenzie is doing currently; and critical of what the Prime Minister is doing. But not once in the 30-minute contribution did Labor put forward one policy, one area where they would like to change things or one area of improvement. Thirty minutes of commenting on what's going on in relation to the farm household allowance is typical of Labor, wanting to be negative about everything that's going on within the agricultural sector; all the support packages that are in place; the fact that we have extended farm household allowance out to four years to fix up the very issues that he is going crook about; and the fact that we've moved to reinstate, with this amendment, the $5 million asset limit. Because of the reinstatement of the $5 million limit we've got about an extra 380 people that have been able to access farm household allowance; around $37,000. We've still got lower interest loans in place. We're still able to give people respite in the interest rates that they're paying, to the tune of half of their outstanding debt. This is genuine financial assistance. Yes, it's costing the government and the taxpayers of Australia money, but it's being put into an area where we think it's going to have the biggest impact in assisting our drought-affected farmers.
What the drought-affected farmers really want is the ability to be able to purchase water to enable them to look after their own interests. What we have seen from Labor is policy after policy that is going to make water more expensive, not less expensive. It will make water less affordable and further out of reach of our drought-affected farmers. Right throughout the southern Riverina, right throughout northern Victoria and up into the Sunraysia, we're going to find that water is becoming further out of reach because of what the Labor Party are proposing.
What we're suggesting is that we need to have a real look at the amount of water that has been taken away from agriculture and returned to the environment, but we don't get any support at all from the Labor Party, who could, in fact, make a meaningful difference if they were to come to the party in favour of agriculture and in favour of our farmers. If they were to start arguing for the wellbeing and the financial longevity of our farming sector—if they were to take that line—we could simply sit down and have real conversations about how we can assist our drought-affected farmers, but the Labor Party will not entertain that line of debate, that line of conversation and that line of policy. They just won't go anywhere near it. They continue to prioritise the health of fish above the health of our farmers, and unfortunately this is the truth associated with the Labor Party when it comes to drought-affected farmers.
We are putting in place the necessary legislation to ensure that we take this cap up from $3 million to $5 million to include a whole other range of farmers who are asset rich but cash poor, to enable them to stay in the industry by including all those farms valued up to $5 million as being able to be recipients of the farm household allowance, as they were under the legislation that ceased as of 30 June this year. This amendment is going to reinstate that limit back up to $5 million. What we are doing here is putting in place the support that our farmers need—this is the conversation that we've been having with our people—to ensure that they will have the best chance of maintaining their place in one of the great industries of Australia, and that is agriculture.
Yes, at various times they need a bit of support, but you'd also like to ask the people of Melbourne and Sydney whose side they are on. Are they on the side of this unlimited amount of water that has been given to the environment irrespective of the outcomes, the pain, the damage and the detriment that that water is causing amongst our agricultural communities and amongst the Murray-Darling Basin communities? Two point three million people are all suffering, because it would seem as though the science that we used when putting together the Murray-Darling Basin Plan right back in 2009 might not now be accurate. What we've now found is that we've got these incredible consequences where there is damage that was never perceived or envisioned, which would be the pain and the detriment that our communities would go through. Not just the farming communities and the farmers but also the nearby towns and regional cities are all feeling the effects of taking too much water out of agriculture and having it returned to the environment.
In a very short time—maybe eight or nine to 12 months—the dry spell that we envisaged, went through and lived through was hopefully broken at the start of May this year, but again we are at the beck and call of nature. We've had three months of a really good start to this season, but we need the winter rains to continue throughout northern Victoria. We need spring rains to materialise to give those farmers a genuine break. At the moment we've got a chance, but we need it to continue. If it doesn't continue, all of the consequences associated with the drought are still in play, with grain and water still too expensive for our farmers to purchase.
What do we have from the Labor Party? We have no ideas and no policy—just criticism and this underlying threat within the language: 'If we were in power, we wouldn't be giving them the farm household allowance unless they could definitely show a way back to profitability or unless they could definitely show a way how they were going to get out of the industry altogether.' It just shows a complete lack of understanding and a complete lack of empathy. As I've said often before, the people in northern Victoria don't need sympathy from the Labor Party or from Melbourne and Sydney; they just need the water.
I rise to speak in favour of the amendment moved by the member for Hunter. It disappoints me that I am here speaking again on this bill. The government have danced around reforms to the farm household support since they've been in government. Here we are again, and we're finally dealing with it. The member for Hunter does raise some valid questions. Have they finally got it right? Are the reforms before us today actually going to deliver the reform that the government need? I think the government themselves are sceptical just judging by the lack of speakers they have on this bill. For all their talk—and we've heard speaker after speaker on issue after issue and question after question ranting about supporting farmers—where are they to speak on this legislation?
This legislation is actually the one bill before the House that would deliver support for farmers tomorrow—not in two years time, like the drought fund, and not like their campaign in relation to trespass on farms, which is largely the role of the states. This bill, the Farm Household Support Amendment Bill, will help right now farmers who are suffering the effects of drought, those who are in drought declared areas. So we have to question the government and their ability to deliver for farmers based upon their experience with this bill.
The farm household allowance goes back to when Labor was last in government. It was first in the budget and declared a priority in 2012-13. Whilst back then it was estimated it would cost just under $100 million, we weren't in the severe state of drought we are today. It was demand driven and uncapped. So there was an expectation that, if the drought got worse, it would in fact increase. It was set at the equivalent Newstart rate, or youth allowance if under 22, for accessing for up to three years. Case managers were assigned to support recipients as they undertook activity to improve their long-term viability and financial situation. I will get to the rate of Newstart and accessing Centrelink, because that has been a big part of the challenge when it comes to our farmers accessing this allowance.
Unfortunately Labor did not win the next election and so it fell to this government to implement the farm household allowance. Quite frankly, they've stuffed it up. There is no other way you could put it. With all the different ag ministers they've had and all the different ministers they've hard in Social Services, they've really struggled to implement this in an effective way to ensure that farmers get the support they need when they need it. As a result of that, we've had review after review into how they've got this so wrong. You just have to read the report of the government's own review into the farm household allowance to see how badly it has been managed. The review made a number of recommendations on this measure and how it's failing. What comes up a lot in the recommendations is that the government should decouple the farm household allowance from social security legislation, tailor it to deliver and recognise the unique and often complex financial businesses in relation to agricultural businesses.
For a government that claims to intimately understand farmers, why has it taken so long for this bill to get here? Why has it taken so long for them to come up with reforms and deliver them so that more people can access the allowance?
Another recommendation was to redesign the program and have a farmer-centric approach to mutual obligation and allow some flexibility to acknowledge the wide range of reasons why people access income support and ensure that progress is not hindered and that it does not create welfare dependency. Again, if the government really reflected the bush, they would know how to do it. And, yet, they have failed to date.
Another key recommendation was to improve communication. The report talked about how the government need to rebrand the program to more clearly communicate the objectives. Farmers in some communities don't want to access this program; they would rather struggle. That's because of the complexity involved, the stigma involved and, quite frankly, the way this government demonise anybody who seeks support from Centrelink. Ultimately, at the end of the day, this is a Newstart payment. Perhaps if they didn't vilify people on Newstart payments so much, more farmers would be willing to take this up.
The recommendations also talk about improving data collection methods to evaluate whether the allowance is working, to continue to adapt and change in a timely manner to ensure that the allowance is reaching the people who need it. These are the recommendations of the government's own report. Here we are today. This wasn't the first bill that this parliament debated; no, it's a bill we're debating this week. It aims to improve, but we haven't seen any demonstration that it will actually improve, farmers' ability to access.
Quite often, when we're on the ground in these communities, we hear about the confusion around eligibility. They've had to employ more and more financial counsellors to reach out to farmers to explain the process. What farmers are discovering is that they need a financial planner in order to access this program, much like our pensioners do to access the pension. Under this government, it has become so hard and so complex for people to access basic support payments that more and more of them are seeking financial planners. The good news for our farmers is that that comes subsidised, through a financial planner, in a government funded system. That is not so for our pensioners, who are paying out of their own pockets for financial planners to assess what rate of the pension they can receive. You've got to ask yourself: how adequate is our Public Service if people need to access private financial planning in order to get a payment that they're entitled to?
What's also disappointing, as I have mentioned, is the timing of this bill. This was first a measure in the 2012-13 budget, it was introduced in 2014 and here we are today finally fixing up the mistakes that this government made with the rollout. We all remember Hansard-gate and the doctoring that occurred under one of the ministers, but that shouldn't have stopped reform from happening to ensure that farmers were able to access this when they needed it. I'd also call on the government to consider who else in the community should be receiving support. When drought affects farmers, it affects their entire supply chain. It affects entire communities, as more and more farmers pull out or don't harvest or don't plant to harvest. What about the small shops in a town? What about the infrastructure in a town? Towns in our regions are continuing to die on this government's watch as more and more people move to metro areas or bigger regional cities in order to survive. It is disappointing that it has taken so long for this government to bring this bill forward. Whilst the government have moved on farm household assistance, I again say to them that they should look at what is linked to this bill and the fact that that could be a big reason why farmers aren't accessing it.
Newstart payments are too low. Whilst the government dance around the issue and blame each other for not speaking out, they have to consider raising the Newstart rate. It is an issue about decency and respect. I say to the government: just talk to farmers who are trying to survive on Newstart about how difficult it is; if you're not going to talk to farmers, at least listen to farmers. You can forgive the Australian people for thinking that this government only cares about farmers, even though it does it in a really bad way. This is one area where increasing Newstart will have a knock-on effect to support people who are seeking farm household support.
Then we get to the issue about Centrelink—again, accessing farm household assistance. Whilst you might get access to a financial planner, you are ultimately being processed by Centrelink. The fact that the government has cut so many staff from Centrelink and failed to invest in building up a strong Centrelink workforce means that processing claims are delayed and drawn out. Whether it be a farmer seeking farm household assistance, a pensioner seeking the pension or someone seeking youth allowance because they have just started university, I, like many people in this House, continue to hear of long delays; three to six months is not uncommon. The worst case was of someone trying for 13 months to access the pension. This particular constituent had all of their paperwork in, only to be told that their paperwork had expired and they had to start again. If the government was genuine about supporting people in need—people who have worked really hard their whole lives, whether it be on a farm or in a small business or for any other organisation, and are now seeking support—then it would invest more in Centrelink to make sure that staff had the skills, were directly employed and weren't subject to the outsourcing that is going on.
There is a need for more financial counsellors in the regions and there is a need to assess which areas are deemed 'drought affected' so they are able to access this. Planners have become more crucial as the forms required to be completed have become more complex. None of the people engaged that I have spoken to have said that accessing the farm household assistance has been easy. They have therefore talked down the program and told people not to bother. For the minimal amount that you get—because it relates to Newstart—it's hard work, demoralising and debilitating, and sometimes you get knocked back.
Farmers can be quite private and proud people, and knowing that people are prying into their personal life is something that is hard for them to overcome. Some have tried to take on the task of applying for this allowance and still are being caught out. For the talk, talk, talk of this government, they really have failed to listen to the concerns of people accessing this support payment and failed to adopt them in in these reforms. I hope what is before us today will help improve the access and I hope that the minister takes on board everything that our farmers are saying about the regulations and the support services, and adopts it going forward because, to date, in the five years they have had this program, they have failed to deliver for farmers. As I said at the beginning, this is the one bill before the House that will help people who are affected by drought, right now. It is not a fund that will kick in in two years' time to build infrastructure. This puts some money—not big money, but Newstart money—into the pockets of farmers who otherwise wouldn't qualify for Newstart.
For all of this government's talk about supporting farmers, they have really let the farmers down. They are quite happy to stand next to people for photo ops and go out there, do the tour and shake the hands, but they are not there to do the real reform that is needed. And that has been picked up, particularly by regional media. ABC's national rural reporter Kath Sullivan summed it up best at the end of last sitting week:
You could be forgiven for thinking Australia's farmers are front and centre in the national debate this week.
Between drought tours and bush summits, the Basin plan and activists trespassing on farms, you can barely turn on the box without seeing a pair of boots kick the dirt.
Farmers don't just make for pretty pictures, they're solid fodder for party politics.
While the attention is often welcome, it doesn't always translate to meaningful action.
That is the point. For all the photo ops, for all the poses, where is the meaningful action from this government? This bill is the one before the House that will deliver and create real action, yet I am not convinced it will go far enough to deliver the action our farmers need.
The report goes on to say that, for all of the lovely stories that we tell, it is leaving farm groups 'desperate' and rural groups 'underwhelmed'. WoolProducers vice-president and Victorian farmer Steve Harrison said this week: 'We're tired. We're looking down the barrel of a third consecutive failed spring.' He said of numerous politicians, state and federal, 'They're all talk and no action.' Whilst they will turn up for the photos, they won't turn up for the action.
I really hope the government does more and actually has more action. For all of their ranting in this place about the farmer, the farmer, the farmer, they are doing very little to help on the ground, day to day. Neither the talk about water from the previous minister nor the talk about grasslands from the minister in question actually deals with the fact that this is one measure that could help people. If they fixed Centrelink, if they increased Newstart, if they got genuine and practical support, if they rebuilt respect for our social security network, as opposed to demonising it, then just maybe the people most in need of support will access it when they need it.
We appreciate the government's initiative in this matter and I regret to say this. In a poll taken in Queensland in 1988-89, if you said the phrase 'National Party' the first words associated with that were 'Bjelke-Petersen', and the next words were my name. So I was the standard-bearer—No. 2 to Bjelke-Petersen himself—in the later years of the National Party's existence in Queensland. I use the term 'National Party', but I'm describing people who were then Country Party. In Queensland, of course, there is no National Party now; they are all members of the LNP. People who state that they are members of the National Party here are not; they are members of the LNP. And the LNP is an affiliate of the Liberal Party. I don't mean to have a go at them—and one of the finest members of parliament I have worked with in my lifetime in the parliament would be George Christensen. George is rapidly being pushed into the same situation that I was pushed into in this place. He was well-brought-up on Country Party principles—John McEwan, no less.
We have seen the extraordinary phenomenon of the ALP moving for a minimum price scheme for milk and five speakers who claim to be members of the National Party get up and oppose a minimum price scheme for milk. Well, if they are the Country Party—the Country Party was formed to deliver a minimum price scheme for milk; that was the reason it was formed. Blackjack McEwan, at the age of 28, in the most famous event in Australian history, called a meeting and a few of them there said all milk should be sold through a cooperative and we should have quotas and a minimum price. He belted the living daylights out of them and, from that day forth, he was called Blackjack McEwan. And the other great founder and pillar upon which the Country Party was built was the Anthony family. And it was exactly the same story. It was reputed that Larry Anthony took two of them there out the back of the tent and belted the hell out of them over the banana farmers' cooperative—bananas were to be sold through the cooperative and, if you didn't like it, you took a hiding. Whether you agree with this behaviour or not—Jack McEwan was called Blackjack from that day forth. This party was formed to deliver minimum pricing, and we have come to the extraordinary position where the five speakers against the minimum price for milk are all from the National Party—and they all gave exactly the same reason that McEwan faced back in the twenties and thirties: 'We have international agreements and we may offend our trading partners and the world will come to an end!' They sounded to me like the CO2 doomsayers: 'The world will come to an end if we give the farmers a decent price for their product!'
Look at what has happened in agriculture. John Anderson, as Leader of the National Party in this place and Deputy Prime Minister of Australia, at an infamous meeting in what was later to become his own electorate—I think it was Gunnedah or Bourke—said: 'Australia has 240,000 farmers. We can produce what we produce with 120,000 farmers.' People in my area interpreted that as: 'What's this bloke coming at? Does he reckon 120,000 of us should go to the wall, does he?' Well, 120,000 farmers have gone to the wall. The figure now is that there are 87,000 farmers in Australia. There are different series, and I don't want to mislead the House here. On the series they were working on, there are about 120,000 farmers now and there were 240,000 then. On another set of series, in 1990, the year of the deregulation of the wool industry by Mr Keating—I don't want anyone to believe that the National Party were entirely responsible for the destruction of agriculture; I wouldn't want to leave the Labor Party out—there were about 140,000 Australian farmers and, on this series, there are 87,000 today.
I don't have to be told that. Where we had five sheep stations, we now have one cattle station. We had 1,000 shearers and backups in the wool industry in the midwest towns—my homeland—stretching from the Northern Territory border, or Mount Isa if you like, back to the coast. We had five sheep stations and 1,000 people employed—in shearing and all the backup industries that were required. But we now have only one property where we had five before. So where there were five families employing people, there is now one family employing nobody.
The populations in these towns have dropped clean in half. Through all of the central west and North Queensland's mid-west, the towns' populations have dropped clean in half. That can be attributed to the deregulation of the wool industry by Mr Keating. It doesn't account for the destruction of the tobacco industry in the electorate that I represent. A town in Victoria had 3,000 tobacco workers and we had 2,000 in Mareeba in North Queensland. The industry has gone completely through deregulation by the National Party. In the dairy industry we had 240 farmers and we now have around 40 or 50 farmers. That is all that is left, and a lot of them exited in the worst possible way.
Why is agriculture collapsing? Everywhere else in the world a farmer gets 41 per cent of his income from the government. Be it a good thing or be it a bad thing, the reality is that farmers throughout the rest of the world get 41 per cent of their income from the government. In Australia, the farmer gets 5.6 per cent of his income from the government. Do we think that we are 34 per cent better farmers? I did a quick trip into America and into southern Brazil, and I can tell you that you would want to get up very early in the morning to compete against the cattlemen of South Dakota and you would want to get up bloody early in the morning if you want to compete against the sugar farmers of southern Brazil. So, in our government's wisdom, we give them a 41 per cent advantage less 5.6 per cent. So let's call it six per cent. So it is a 36 per cent, or whatever it is, advantage. So we are not competing against farmers in other countries; we are competing against the subsidy given to the farmers in other countries.
We established a sugar industry in Thailand. Aren't we good boys; isn't that wonderful? Thailand farmers were getting 22c a pound for their sugar, whilst our farmers were getting 7c a pound for our sugar. That will give you some dimension of the subsidy in Thailand. In India there's $23 billion a year in subsidies just for fertiliser alone and in the European community they get $700 a tonne for raw sugar on the world market and we get $400 a tonne on the world market. As for free trade, our sugar is not allowed into Europe or into America. They are the two biggest markets for food in the world and we are not allowed into either of them, and sugar is the fourth biggest agricultural item in this country—and we get preached to about free markets.
So the first reason is the 36 per cent advantage in subsidies, or tariffs or whatever you want to call it. The technical name is 'support level'. So we are disadvantaged in support levels by 36 per cent. Secondly, we have only two people to sell food to in this country. We are the only country on earth that has a concentration of market power such as we have in Australia with Woolworths and Coles of around 90 per cent. I would say it is around 93 per cent or 94 per cent—and we can all argue about that. So we have two people to sell to and two people to buy it from. When the LNP in their wisdom deregulated the dairy industry, we went from 59c a litre on the Friday to 41c a litre on the Monday—no free market there; classical oligopoly pricing. Did the consumers get a benefit? No, the price went up nearly 30 per cent to the consumers. So consumers got hit and the farmers got hit, and the people in the middle get $1,000 million a year of extra profit.
Our cattle numbers are down 23 per cent from where they were and where they should be. Our sugar production is down 16 per cent from where it was and where it should be. Our sheep herd is down 60 per cent from where it was and where it should be. Our dairy herd and dairy production are down around 20 per cent from where they were and where they should be. We are a net importer of seafood, pork and, believe it or not, fruit and vegetables. Now, that goes up and down. I think at present we are not a net importer of fruit and vegetables, but it goes up and down. Over the last 10 years, it's a fair call to say we've been a net importer of fruit and vegetables. We have had what I can only describe as a galoot—a National Party member, a big tall bloke walking around wearing a stupid hat on his head. He said, 'We will be the food bowl of Asia.' Hey, listen: thanks to your policies, we'll be the begging bowl of Asia. You can see where this is going. In seafood, we are a net importer. In pork, we are a net importer. In fruit and vegetables, on average, we are a net importer. We can clearly see where we're going. Our cattle herd is down. Our sheep herd is down. Our sugar production is down. Our dairy herd is down. We know where agriculture is going. We had 240,000 farmers and now we have 120,000.
What we are talking about today is family farm assistance. You blokes had better watch out, because the farmers are not all stupid, and they're watching. It was these blokes, the ALP, who introduced the family farm assistance scheme. If ever I have seen a Treasurer who did everything he could for us, it was Wayne Swan. There's no doubt about that. He introduced the family farm assistance scheme. For the first time ever, when we were going broke and on our knees, we got at least a welfare payment. The terrible part is that, if there are 87,000 farmers left in Australia and there are 9,000 that have received the home assistance grant, that means one in 10 farmers in Australia are on welfare payments. We tried to do something about it. I'm still in a state of shock over the ALP moving for a minimum price scheme in dairy, I must admit, but they did. So farmers out there might start questioning their loyalty. One in 10 of them are on a family assistance program introduced by the Labor Party.
Where would the dairy industry be if our milk marketing bill were introduced, bringing the price scheme back? I'll tell you where it would be: the price would be over $1 a litre. Our farmers are getting 58c a litre in Queensland. They were getting 59c prior to deregulation in the year 2000. Twenty years ago, arbitration at a fair tribunal—the arbitration commission for milk, the milk marketing board or whatever you want to call it—gave us 59c a litre. Twenty years later, we are on 58c a litre. I can tell you that, when it was 59c, I didn't see many of my dairy farmers driving around in Mercedes-Benz cars or even in top-of-the-range Range Rovers; they didn't have them either. They were making a quid and staying alive, but they weren't taking trips overseas every year or anything of that nature. But now, 20 years later, when money is buying 30 per cent less, they are on less money than they were 20 years ago.
It was very, very sad for me to see the once great party of Jack McEwen and Larry Anthony, founded by them physically bashing people to get a minimum price, being led by the Labor Party and opposed by— (Time expired)
Yes. I would like to speak to it as well. I move:
That all words after "reading" be omitted with a view to substituting the following words:
(1) is of the view that the income support provided to farmers and their families through the Farm Household Allowance is inadequate due to the current maximum of four cumulative years of income support provided; and
(2) calls on the Government to consider extending this maximum period to seven years, the average duration of droughts in Australia".
The original question was that this bill be now read a second time. To this the honourable member for Hunter moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The honourable member for Kennedy has now moved as an amendment to that amendment that all words after 'reading' be omitted with a view to substituting other words. The question now is that the amendment moved by the honourable member for Kennedy to the amendment moved by the honourable member for Hunter be agreed to.
The Labor Party introduced this act, and they will go down in history and be applauded and respected for what they achieved there. The coalition government expanded it from two years to four years, and we applaud and thank the coalition for having extended it to four years. But our droughts on average are seven years, and so I've chosen a period of seven years. There is structural damage in our industry, which I just outlined, from the situation where we have two supermarkets chain—and I'm not blaming them for that—completely controlling the marketplace and paying the farmers whatever they feel like paying the farmers. I pointed out that we're competing against people enjoying 40 per cent support levels—'total support estimates' is the technical term used.
I have to interrupt the member for Kennedy. I've sought some further advice from the Clerk, and that advice is that the member for Kennedy is not able to speak further at this stage. But I have a point of order from the Manager of Opposition Business.
Yes, Deputy Speaker. Given the circumstances of how that unfolded and not wanting to have a situation where the member for Kennedy doesn't get to explain the amendment, if the government wants to as well, we'll provide leave for him to speak for a further five minutes.
This is a little unusual, because the member for Kennedy did have an opportunity in his earlier remarks to speak about his amendment, but, given that there's a great deal of unanimity in the chamber about this issue, the honourable member for Kennedy has a further five minutes.
I was speaking to the bill. I'm now speaking to the amendment. I thank both sides of the House for giving me the five minutes. I'm just asking for the support to be extended. It was two years originally under the ALP. The coalition extended that to four years, and God bless them for that. It needs to be extended to seven years, because the crippling drought is going on unabated in very large sections of central and southern Queensland. I think realistically it should be for seven years, and that's why I have chosen seven years here in moving this amendment.
The only other thing that I must add is that—while I said there's 41 per cent support levels in other countries and we only have a six per cent support level in Australia, and we have the situation with two huge combines controlling the marketplace—the third problem we have is an inflated dollar. Where the rest of the world was under one per cent in their interest rates for nearly a decade, Australia was over three per cent, and that propped our dollar up to artificially high levels. When Paul Keating free-floated the dollar, it went down to 49c, and then he propped it up. He did the right thing and then he did the wrong thing. When Peter Costello came in, he did the right thing and allowed it to free-float, and it went to 51c. Again, he lost his nerve and propped it up. He did the right thing and then did the wrong thing. There is in doubt that the dollar has been held to twice the level that it should be at, and that has been enormously detrimental to farmers.
So, to ride the situation with drought, is it fair that a person on a farm has his whole life destroyed because he can't get a welfare payment? If everyone else is entitled to a welfare payment, why should a farmer be deprived of a welfare payment? So I don't think that welfare payment should be limited to two years or to four years. It is not going to allow him to stay on the farm. Eventually it will be sold out from under him; there's no doubt about that. All we're saying is that humanity should prevail. The farmer should be allowed to feed himself and his kids.
If anyone wants to read a heartbreaking story, 1932, a book by a famous journalist in Australia, describes a family that was sold up in Western Australia. Well, that's happening every day of the week in the dairy area. In probably the biggest dairy area in Australia, the Atherton Tablelands, we had the highest suicide rate in Australia, which was three years after dairy deregulation.
These horrors can be avoided, to a very small degree, with this decision to give farmers welfare payments—and I won't hesitate to use that word; why should everyone else be entitled to welfare but farmers be deprived of it? These are living payments—allowing-to-live payments—and we're asking here that they be extended from the current four years to seven years.
I rise to sum up on the Farm Household Support Amendment Bill 2019. I understand we'll be dealing with the amendments after I sum up. This bill demonstrates the government's responsiveness to the needs of farming communities in rural and regional Australia.
The Farm Household Allowance Program provides up to four years of eligible income support to farmers and their partners while they take steps to assess and improve their long-term financial situation. While on the payment, farmers and their partners have access to a healthcare card and a pharmaceutical allowance, rent assistance, telephone allowance, energy supplement and remote area allowance where applicable. These features of the program are unchanged.
Farmers accessing the program are subject to income and on-farm and off-farm asset thresholds. Between 1 September 2018 and 30 June 2019, the on-farm asset threshold known as the farm asset value limit was increased from $2.6 million to $5 million. This bill proposes to maintain the farm asset value limit at $5 million from 1 July 2019. The government understands farmers can be asset rich but cash poor and need support to improve their circumstances, particularly if they are experiencing poor climatic conditions.
The program supports recipients to consider alternative employment, or to make the decision to transition away from farming but to implement the change on their own terms. We know things are tough for a growing number of farmers. In the last year, government outlays on the program have grown from more than $230 million to over $340 million. We have helped an unprecedented number of farmers and their partners, with the number climbing to over 12,000 recipients over the life of the program.
This bill also clarifies the treatment of deductions and income for recipients. As to allowable deductions, the business running costs can be claimed against the earnings to which they relate. For example, fuel, insurance, cartage and interest payments related to the farm enterprise can be taken off the income of the farm. People who have a second, unrelated business can deduct the running costs from that business against their income.
The bill maintains the farm asset value limit at $5 million. It clarifies the treatment of deductions and income for recipients and helps farmers and their partners plan for their future financial security.
I thank the members for their contributions, and I commend the bill to the House.
I thank the Minister. The question is that the amendment moved by the honourable member for Kennedy to the amendment moved by the member for Hunter be agreed to.
The question then before the House is that the amendment moved by the honourable member for Hunter be agreed to. All those of that opinion say aye; to the contrary no.
Honourable members interjecting—
I think the noes have it?
Mr Burke interjecting—
I believe I heard two voices, but maybe my hearing is a little more acute than the Leader of the Opposition Business's! The noes have it. There's no division required.
The question now is that the bill be read a second time.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.