Wednesday, 23 October 2019
Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019; Second Reading
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 and to move the second reading amendment circulated in my name. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(1) notes that the drought is severe and ongoing; and
(2) criticises the Government for forcing desperate drought-affected farming families off the Farm Household Allowance".
We are, in some circumstances, going into the ninth year of drought on the eastern seaboard, and of course there is not a state nor a territory in the Commonwealth which is not in some way adversely impacted by this drought. If it is not already, it will soon be the worst drought in our history—at least, since the time of European settlement. It is hurting lots of people—not just our farmers but people in rural communities everywhere. The economies of those communities are turning downwards. When the farmer is doing it tough, he or she purchases less in the town and less from the farm supplies business, and everyone is impacted. Of course, many of those communities are also suffering at the hands of terrible bushfires which are, themselves, a function of a changing climate—a hotter climate, a drier climate—a climate which is causing high temperatures earlier in the year than we would expect and a climate which, over time, has produced a lot of unspent fuel sources in and around those communities.
Lots of workers who don't get much mention in our debate here about the drought but should get more mention are all those who work on-farm for farmers and there are many of them. Many of them are now out of work or only getting intermittent work. That doesn't make life particularly easy, because that frustrates someone's access to income support through Centrelink. If they're in and out of work all the time or they're getting fluctuating rates and hours of work then they don't get the support that farmers will receive through this bill and the legislation it is amending. Some of them will be working for the local rural supplier's business or the local mechanic or the local electrician or some other tradesman and are now not getting the work they previously were able to secure because there's less work in the community.
Of course, some of those communities are literally running out of water. Even big communities like Tamworth, Armidale and Murrurundi, in the member for New England's electorate, are all too close to running out of water; in fact, Murrurundi did run out of water some time ago. We are very careful that, in the absence of meaningful rain in the next six months, year, maybe two years or, even worse, three years, we are potentially facing what I'd describe as a war-like situation. Some tough decisions might need to be made about whether we keep moving water to people or people to water, for example, whether there are some commodities that we can save and some we can't save. Some we will need to save with our limited resources and some we won't be able to save. I pray every day that we never face that situation but it's a real possibility. The weather forecasters don't give us any hope of summer rains. They don't give us much hope of meaningful rains through the winter of next year. And, you know, it's easy to come to the conclusion there's no reason to be optimistic beyond that either.
So the government needs to establish and determine some scenarios, like, as I said in the Australian Financial Review this morning, as a general would: assess the geopolitical situation, the risk of war, what the scenarios look like and then build a battle plan to respond to each of those scenarios. This is what this government hasn't done. At least, we're not aware that this has been done. If I am wrong, I will be very, very relieved but, sadly, I suspect I am not. The government needs to be asking itself: 'What do we do if it doesn't rain for another six months? What do we do if it doesn't rain meaningfully for another year? What do we do if it doesn't rain for another two and three years?' As scary as that proposition might be, it should have a battle plan for each. Generals don't wait for the battle to begin before establishing their battle plan; they make their assessments well in advance, they determine the scenarios, and they have a battle plan and contingencies for each. We don't have that in this country and we should have. And again, I hope I'm wrong but there is a possibility that we will be facing some very, very challenging times.
That's why the Leader of the Opposition and I have reached out to the Prime Minister and the Deputy Prime Minister and suggested that, given the severity of the situation, we sit down around a table—all parties—to talk about those scenarios, to assess those scenarios and to think about what will need to be done by government to ensure that the impact on the Australian community is less than it might otherwise be. That offer was extended very sincerely and genuinely, and I extend it again here today. I appeal to the Prime Minister to come to the table. He can have his jokes about the semantics about whether there was a war cabinet or not a war cabinet, or whether it was a war advisory council. The Australian people don't want us talking about or arguing about such frivolous points. What they do want us to do is sit down together, fully comprehend the seriousness of the situation and hatch a plan to do something about it.
The Prime Minister says he has a plan. The drought minister says he will have a plan; he said he will have a plan when the National Farmers Federation delivers its plan. Well, the National Farmers Federation has now delivered its plan, and it's time the government delivered a plan too. National Party MPs, we see in the newspaper today, are frustrated too. They're so frustrated that they've decided not to wait for the Prime Minister; rather, they've hatched their own 10-point plan, sadly cobbled together and every bit as ad hoc as the Prime Minister's approach to drought has been over the last—well, six years for the government, but only a year for him. It's no plan, but the fact that rebellious Nationals MPs are breaking away from their leader and their Prime Minister to deliver their own plan underscores the point the opposition has been making now for weeks, if not months: that we don't have a plan, we need a plan and we need it now.
In fact, we needed it six years ago, which is where this sad story began. Six years ago, on coming to office, the then Prime Minister and former member for Warringah, Tony Abbott, and the then agriculture minister—still the member for New England—decided to put the brake on the COAG drought policy reform process. Imagine that! Prior to that, something historic had occurred. The states, the Commonwealth, the major political parties, the National Farmers Federation and all of their affiliates agreed that the drought architecture we had in this country was not working. It was inefficient, it was ineffective, it was full of moral hazard and it had to go. It's a big call. But they were determined to prepare themselves for the next drought with a policy which was more meaningful, more economically efficient for the taxpayer, devoid of moral hazard and which, of course, built resilient in our farming community. The COAG committee which was charged with progressing that reform was the Standing Council on Primary Industries, a formal arm of the COAG architecture, but it was abolished.
I think the Prime Minister of the day, and those who have followed him—including the current Prime Minister—thought the rain would come. It's a wonderful confidence we see in our rural communities. Farmers tell me almost every time I speak with them, 'Every day is a day closer to rain.' It's an admirable optimism. It's a courageous optimism. It does help to build emotional strength in our rural communities. But the Prime Minister of the day can't be that relaxed. The Prime Minister of the day has to plan on the basis that it might not rain—or, indeed, when it does rain, it might be many, many days away. He doesn't have that latitude and shouldn't take that approach.
What did he and those who served before him do?
They thought they'd just take an ad hoc, piecemeal approach—roll out a program here, roll out a program there—and hope it rained, and rained soon. And then the current Prime Minister thought he'd lose an election. I'm sure he is very happy he didn't—much happier than we are, obviously! I think he believed it would be a Labor problem now, but it remains his problem. Notwithstanding that, the hand of friendship and bipartisanship is there for him, and he should take it.
The other thing he should do is stop claiming he is spending $7 billion a year on drought assistance. People no longer have to take my word for it when I say that that is a shocking exaggeration, a shocking embellishment. Thanks to Senate estimates just this week, that assertion by me has been confirmed by departmental officials both in the agriculture department and in the Department of Finance. We know how he got to that $7 billion. He got there very quickly by including the so-called $5 billion Future Drought Fund, which we know is not $5 billion and won't be $5 billion for 10 years; it's $3.9 billion. More specifically, it's a fund which won't draw down until after July next year. When it begins to draw down money, it will draw $100 million every year.
Now, that's not a bad thing. We support the provision of future funding for the building of drought resilience. We don't have any disagreement with that. That is a good thing, although the money should not have been robbed out of the Building Australia Fund, which itself was dedicated to regional infrastructure. We don't have any problem with the concept or the principle. But not one cent, as confirmed by the Prime Minister right here, at that dispatch box, will go to a farmer. Not one cent will go to a farmer! For the Prime Minister to claim $7 billion by including that $5 billion is being more than loose with the truth. And then of course it includes a billion dollars worth of concessional loans, which most farmers have decided are of no help to them. More debt or shuffling debt, they say, is not going to save the day for them. Of course, the cost for the government of providing concessional loans is quite modest. The government borrows at the bond rate, which is very low at the moment, and provides a concessional loan at a slightly higher rate. I'm not saying there aren't costs—of course there are—but it should not be counted towards the so-called $7 billion.
Of course there are loans to the states for water infrastructure. There are another couple billion dollars there, or just a billion dollars—I can't recall, but it's big numbers—but these are loans to the states which have to be matched by the states. This is why they haven't been particularly successful. The states are under pressure as a result of fiscal vertical imbalance, so they don't have the money to match that. I think the Department of Finance told us that, over the next four years, the government will spend $2.5 billion. That is not $7 billion, not $6 billion, but $2.5 billion over four years. That's being pretty generous too because, again, it depends on how you count some of these programs, which are either designed to fail or contingent on repayments. But, more importantly, they aren't really helping farmers.
I don't mind the Prime Minister being loose with the truth with farmers and rural communities. I'm not happy about it, but, let's face it, politicians do that from time to time; the current Prime Minister won't be the first to be guilty of it. But what makes me genuinely angry is that the $7 billion is used as an excuse not to do more. That's what the $7 billion tool is really all about. When asked whether he'll do more for farmers, the Prime Minister's standard response is, 'I'm already investing $7 billion'—code for, 'I shouldn't really do any more, because $7 billion is a lot of money in anybody's language.' He knows that many Australians who aren't farmers, who might live in the capital cities, love our farmers. They recognise them as salt-of-the-earth, hardworking people who deliver our food and fibre. He wants them to know also that $7 billion is a lot of money, and he lives in the hope that they'll agree that it's not necessary to spend more, because $7 billion is an enormous amount of money. What really makes me angry is that his $7 billion loan is an excuse not to do more at a time when we desperately need to do more.
A good start would be to stop cutting income support payments for Australian farming families. Six hundred families have already been cut off the Farm Household Allowance and another 500 are to be cut off by Christmas. What a wonderful Christmas present for those farming families! Remember, these are amongst the most desperate of our farming families. Farm Household Allowance, be in no doubt, is a difficult payment to secure. Ask the hundreds that have tried and failed, or spent weeks, if not months, trying to succeed. To cut them off now while this drought is ongoing—remembering that we're talking about a very modest payment, sufficient to put food on the table and maybe a little bit of cashflow into the farm business to get to the other end—is a callous act. It's hard to fathom when the opposition sits here and offers bipartisanship. The Prime Minister is not going to get any criticism from us by extending the period for which farming families remain on Farm Household Allowance; in fact we're appealing for him to do so.
For balance, let me tell you what the Prime Minister will argue. It's something we all agreed with back in 2012. We all agreed that the income support payment for farmers, which is just like Newstart but has far more relaxed income and asset test provisions, shouldn't be forever. COAG originally decided that it should be for three years and that, during that period, the farm enterprise and the farming family have to decide how they reshape their business model, or to get out. That was, in 2012, a reasonable proposition. I note that, in one of the earlier amendments we dealt with here, that was extended to four years. But no-one here now, or no-one who was in the conversation then in 2012, could have possibly conceived that the drought would be so lengthy and so harsh.
The test of viability now should not be whether you can get through the ninth or 10th year of the drought. Sure, back then—remembering that Farm Household Allowance isn't just a drought payment; it's a hardship payment typically provided to drought affected farmers—it was reasonable for us to believe that, after three or four years, if the farming enterprise hadn't been able to sufficiently adjust its methods or its business model, it might be time to get out. And there will still be examples of that; there will always be examples of that. But those who are still hanging on in the seventh and eighth year are amongst the viable. The test of viability shouldn't be that you make it to the ninth or 10th year. That's the difference. When the facts change, you change your mind and you change the policy. We should all say together, 'Wow, this is something very significant, something unanticipated, something not expected, something no-one could have foreseen.'
We need to take away the time cap, which is forcing farmers off income support, and park it away until we get to the other end of this drought, and let's all pray that it comes sooner rather than later. I don't think there's an Australian out there who thinks that we should be throwing farming families off income support—a very modest payment—at this point in time. I'm disappointed in those who are publicly disagreeing with me. Amongst them is the member for New England, who outrageously claimed last night on the ABC that to extend farm household allowance to farming families beyond four years would be an affront to our WTO arrangements. You can just see it: the Europeans would be straight on the phone to say, 'You made an agreement you wouldn't have any subsidies, and therefore distortions, in the market.' Imagine them arguing that extending a modest $250 payment to a farmer who is destitute and barely able to keep their animals alive is going to distort the international market. It's not only a ridiculous proposition, but it's a ridiculous proposition to put. If that's the best excuse they can come up with for cutting farming families off farm household allowance, well, God save us all.
We support this bill, just as we've supported every other bill—this is the 12th we've supported. This is the 12th package of amendments to the farm household allowance, and we've supported each and every one of them. And along the way, in this place, in Senate estimates and in the public domain, successive ministers have told us, before the arrival of the next bill in this place, that farm household allowance is perfect and nothing needs to be done. I remind the House that when the member for New England doctored his Hansard in this place—a shocking event that led to the sacking of a highly regarded and respected public servant—it was for an answer he provided to a question I asked in this place about farm household allowance. They've been embellishing—when I say 'they', I mean the government—the effectiveness of farm household allowance, since March 2020, since the inception of the allowance. But here we are, after 12 packages of improvements.
What do these improvements do? Well, basically, three things.
I'll take that interjection. They improve it, and that's why we're supporting it. But don't interject to suggest that this is sufficient to cover off on what our farming families need. Let's keep it in perspective, too. The government says, 'Well, this is the first provision. Instead of being able to secure farm household allowance for only four years, you can get it for four in every 10.' Let me share with the Australian community what that means. It means that if I went on the payment in 2014 and I'm coming off it now—the government's cutting me off it now—I would be able to reapply in 2024.
Mr Littleproud interjecting—
And if I were the minister, I would not provoke me! The second thing it does is to further relax the income test. That's a good thing. We support that. But those worried about not being captured by $100,000 rather than $80,000 aren't the people, necessarily, who are destitute, Minister, so let's please keep this in perspective.
The other thing it does is to introduce these lump sum payments. So what the government is saying here is: 'We're not going to cut you off after four years, now; we're going to cut you off after four and a half years.' I'm impressed with their optimism. Maybe what they're saying is that they expect these farmers not to be in need of any allowance in six months time. I doubt it, sadly. I wish that were true. But I sadly doubt it.
We are now dealing with lateness again. This bill has to be passed before this lump sum payment can be secured. I've had a look at the parliamentary calendar, and, at best, this bill will pass through the parliament and go to royal assent in mid-November. It'll probably pass the Senate on Remembrance Day, if we get on with it. And we're here to facilitate it. But what happens to those who've already been cut off, until then? Of course, those who have been cut off before then will have to reapply for this payment, for this lump sum, and, gee, I pray that the process is nowhere near as horrific for farmers as was the original application to secure farm household allowance.
I just want to say something quickly about the dairy sector. The dairy sector was doing it tough, caught in a price-cost squeeze, even before the drought began.
Mr Littleproud interjecting—
The minister says he fixed it because he bashed up on the supermarkets. Go out to any dairy farmer in the country now and ask them whether anything has improved for them since the minister claimed to have fixed it. He claimed to be the new fixer!
Mr Littleproud interjecting—
Well, that's not what the dairy farmers are telling me, Minister. They had an 18-month ACCC inquiry into the dairy industry. Its main recommendation was a dairy code of conduct. Do we have a dairy code of conduct? No. Senator Hanson might give us one earlier than we can expect under those sitting opposite. But this is a government which has not lifted one finger—
I will support Senator Hanson, on any matter that helps our dairy farmers—in contrast to those who sit opposite. They have done nothing for them. When we put forward a reasonable proposition, to have the ACCC investigate the establishment of a minimum farm-gate milk price, do you know what those on the other side said? It was a cruel hoax imposed on our dairy farming families.
Mr Littleproud interjecting—
Well, Minister, let me tell you: that's not what they're saying now. In fact, they are screaming at you, and you should start listening. I know some of you are listening, because you had a bit of a stoush in the Nationals party room this week, and I know you're part of what I call the northern Nats, at war with the southern Nats. We stand with the northern Nats. If the northern Nats are prepared to do something for our dairy farmers, we will be there with them.
The original question was that this bill be now read a second time. To this the honourable member for Hunter has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.
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.
As the shadow minister has indicated, we will be supporting the measures of this bill, but I'm also here supporting his second reading amendment. In particular, I want to focus my remarks on the Drought Communities Program, which sits in the Infrastructure, Transport, Cities and Regional Development Portfolio. This is a drought funding communities program which, in essence, recognises that, as farmers go through drought, the communities that exist around them are also experiencing economic hardship. Over various governments, there has been some form of recognition that we do need to try and support the economies and jobs of those communities. But what is really disappointing—and we found this out in the last couple of days, through Senate estimates—is that not all councils are equal when it comes to the Drought Communities Program. I think there is a very serious issue with the way in which this program is being administered, the way in which decisions are being taken and the way in which councils are able to either get into the program or not get into the program.
As we understand it, as the current measures stand, there are about 123 councils that are eligible. During the election campaign, 14 councils were deemed eligible under this program. They may well be exactly in the circumstances we're talking about, but we heard in Senate estimates yesterday—and there is not a lot of transparency around this—that one of the measures that is being applied to whether councils are eligible or not is not only rainfall data but also the number of workers who are involved in the agricultural workforce; it has to be at around 17 per cent.
At Senate estimates we heard about the ridiculous circumstance of the shire of Moyne being deemed eligible for this funding and being offered $1 million, but they were out in the media saying: 'We are actually saying we think we've got enough rainfall at the moment. We feel a bit guilty about accepting this money, because we think there are other council areas in more trouble than we are.' That's not to say that parts of their shire aren't in trouble, but they were saying very clearly: 'We think there are people doing it much tougher than we are. How come we're getting this million dollars?' Then there was the example of the shire of Moira, in the member for Nicholls's electorate, which just fell short of the workforce figure—16.9 per cent. When you look at the workforce, that could potentially be, according to a spokesperson from the shire itself, a handful of workers—five people. It might have been because people had to leave the sector because the jobs weren't there due to the drought. This seems to me to be a very passing-strange way of administering this sort of program.
I also think, when we start to look at some of the things for councils being funded under this program, that the minister needs to pay some attention to this. I understand—others may not—that the government wants to use the program to, hopefully, provide some opportunity for better economic development—so, if it's in the tourism sector, trying to get people into the communities so that there are still jobs and that the economy is still going in those communities. But, when I look at the list of some of the projects that the department provided us on Monday—I am very happy to be corrected on this—I'm not convinced that toilets at Bourke Cemetery are actually economic drivers for jobs and growth in that region; I'm not sure about that. I'm not sure that toilets at a skate park are either. I think they're important, and I think it's great that you get toilets at a skate park, but I'm not sure that these were the sorts of things envisaged under the Drought Communities Program. We haven't seen a public media statement about this, but, as a result of some Channel Nine media inquiries, there was a report on Channel Nine that the government is now reviewing local government eligibility for this program. There has been, as far as I have seen, no media release or statement from the minister that this is actually a problem.
What we have got here is a government basically using this program with 14 councils during the election campaign—none of which are in Labor seats, I have to say, and there are definitely Labor seats that are drought affected. We had this program announced in the context of the election. It's a good election announcement to say, 'We are going to give your council $1 million in funds for community facilities.' We have got areas like Shoalhaven, and some of the areas in the member for Hunter's electorate, saying that they think they should meet the eligibility criteria as well—and places like Kiama as well. You have to say that this government has politicised this program, and it needs to clean it up—particularly in a context where we have communities that are severely affected by drought.
This government has tried to talk a big game about drought funding. The problem it has is that it has been asleep at the wheel. We are in this government's seventh year. The drought didn't just happen yesterday, or a week ago, or a month ago; we are in a long period of extended drought. The government basically cut and stopped much of the work that Labor had started in government: trying to actually look at drought mitigation strategies, trying to connect water infrastructure, trying to look at the way in which you would reform, trying to look at the way in which drought declarations and the partnerships between states and territories are made. It basically stopped doing any of that work because it had this principle that anything Labor did was bad, and therefore they couldn't do it, rather than actually thinking there was some good in it and they should just continue it.
The government has talked this game—'We've got $7 billion that we're spending on drought!'—which is simply and utterly not true. The government has taken $3.9 billion out of the Building Australia Fund, the infrastructure fund, which in fact it could have used for drought mitigation infrastructure if it got through the Infrastructure Australia process. It could've been using that money anyway. It's taken that and put that into a fund that will, over time, grow to $5 billion, and it will then draw down on the interest of that fund to the tune of $100 million a year. That is not a $7 billion drought program; that a $5 billion program, the interest of which will go to drought affected communities.
Again I say, supporting this second reading amendment, the government needs to actually look very seriously about what its drought policy is. In particular, it needs to look at what it is actually giving directly to farm households—it is in this bill, but also a number of people are coming off farm household assistance—and how that's working. More broadly, it needs to look at our preparedness and how we are actually managing drought—in particular, in my portfolio area, the Drought Communities Program. I look forward to seeing—the minister is at the table—the terms of reference of the review of the Drought Communities Program. I look forward to seeing whether it is just a review to try to say, 'We've got a local council in the member for Nicholls' area that probably should be eligible, so how do we make it eligible?' It looks to me, from the administration of the program, that this is a significant failure. If the government has politicised the program in the way that it looks on paper after the evidence of Senate estimates, frankly, they should be ashamed of themselves.
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. We all realise how important food is to our nation. Our farmers feed our nation and they feed at least 60 to 80 million people overseas as well. At times of severe drought, that importance is thrust into national prominence. Since 2014, we have realised that, being involved in agriculture at this time with increasing costs of water, electricity, fodder and feed—all the costs that go into producing food and fibre for our nation have increased—if the markets and the value of the goods increase, it's well and good, but there are many times, like now, where the cycle is against you.
Everything is clustering against farmers who are in drought affected areas. They are unable to grow the crops or the pastures or support the animals because of physical lack of water. It's not just irrigation that's been brought into the spotlight; it's dairy farming, it's cattle production—all the things that we have been taking for granted. With the severity of this drought at this time, many branches of coastal rivers—you see plenty of water in them, but most of it is salty until you get up into the hinterlands. Some of the branches of these coastal rivers in my electorate have turned in a chain of ponds, rather like the Murray and the Darling have over time.
The Farm Household Support Amendment (Relief Measures) Bill (No.1) 2019 is equally as important at this time because of the intersection of all these escalating costs generated by the drought. It's not just a drought program. As I said, being involved in agriculture, you're on very long cycles. When it's good it's very good but, when it's bad, you have to have incredible resilience. There are many people who are resilient, who have been excellent farmers and who have done what they could, but they have no income—and they haven't had income for many years. That's why the farm household allowance was increased in 2014, and, as the minister has said, we are now taking the next step to offer support.
The farm household allowance is virtually the same as Newstart. For those who qualify, couples get $1,000 a fortnight and individuals get just over $500 a fortnight. This is not charity; this is what everyone else in Australia gets if they're unemployed. It shouldn't be seen as charity. It's delivering to people who need it when they need it most. We've changed the criteria to make it more accessible to more people, given the situation that we find ourselves in now. The assets that the payments are judged against were upgraded earlier. On 1 July, the asset limit went up to $5 million. It started at a much smaller number, but that increased figure will allow farmers with mid-size farm to access it.
The other thing that we have adjusted is the amount of non-farm income that can be offset against losses. It used to be $80,000 but has now been increased to $100,000, which gives a much better idea of the true net position of a farming enterprise. We have also tried to make it easier by reducing the amount of paperwork, from about 30 pages down to 17 pages. A lot of farmers have partners that are involved in the same business, and now only one set of paperwork for those partners will be required—so you're not duplicating the red tape.
We have also changed the amount of farm household allowance from four years worth of farm household allowance in a lifetime to four years out of 10, which is much more generous and much more realistic—because most farmers are in the industry for their lifetime and many of them have seen droughts before. I remember the 1982-83 drought. It was devastating. Many good farmers walked off the land at that time. Hopefully, this measure will keep really good farmers involved in agriculture for a lot longer.
The farm household allowance will provide support for the basic necessities of life when the asset that they have developed is sitting there not earning income—just costing them income. We've allowed them to offset the forced sale of their stock as long as they put it into a farm-managed deposit account within six weeks of the forced dispersal or sale of goods and stock. So we've tried to help in as many ways as possible. There's also an ancillary payment of $1,500 to allow them to get financial advice. There are rural financial counsellors who will help them do that for free. They have been doing a great job, and demand is up. We've put more money into rural financial counsellors as well. There is also an incentive to diversify and do business analysis, do extra training and learn extra skills to increase their sustainability and build their resilience—to the tune of $4,000 during the period that they are receiving the farm household allowance. So we're not just giving a cash payment; we're trying to strengthen their business position during the time that they're receiving support.
The relief payment is the other important thing in this bill. We are adding a relief payment for those people who have struck the four-year barrier: $13,000, effectively, for a couple, or $7,000 or so for a single person. There are many who have argued for more. If the situation changes, we will always keep a watching brief to see what is required. But this bill definitely receives my support, because we do need to keep our really amazing Australian farmers in the business of producing food and fibre for our nation. As I said, it's not charity. It's just doing what we do for anyone who finds themselves unemployed with no income.
Farmers make a unique contribution to the prosperity and wellbeing of our nation. They do so under extraordinary conditions and family sacrifices, often subjected to unpredictable weather, fluctuating commodity prices, long hours of hard work, pests, disease, and, more often than not, heavy financial burdens. Not surprisingly, I believe most Australians are sympathetic with the struggles of farmers and are supportive of assistance programs that enable farmers to get through hard times. With continuously changing weather patterns, those hard times are likely to be longer and more frequent. We're already seeing more frequent and more extreme weather events, precisely as predicted by climate scientists, yet the Morrison government does not even have a comprehensive climate change policy. They often talk about climate change commitments, but when you delve deeply into their policies, the reality is that you see very, very little.
This legislation, the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019, can, in fact, be directly attributed to a changing climate. Without continued financial assistance into the future, farmers are going to find it more and more difficult to make ends meet. Under this legislation, farmers will be eligible for 4.5 years of farm household support in every 10-year cycle. Originally, farmers were eligible for three years of support in a lifetime. That was probably a reasonable proposition at the time that the policy came into effect, but times have changed and, in particular, the climate has changed. The three years was subsequently increased to four years and the four years is now being topped up with a six-month lump-sum payment of $7,500 for a single recipient, or $6,500 each for couples, which means it's effectively a 4½ year support program. I note that the payments are not subjected to the government's shameful robo-debt program. I welcome that, but it does expose the Morrison government's double standards.
For some farmers, the increased assistance will not be enough. We're hearing calls from the National Farmers' Federation for more drought assistance, including farm exit packages. Farming in Australia has always been risky, but when calls are being made for farm exit packages, that implies a crisis.
On Monday night I spoke in this place about the long-term sustainability of the Murray-Darling Basin, which, again, is a matter I have spoken about in this place on many occasions, and which has been the subject of parliamentary debate in this place for over a decade now. Yet we still have a situation where the insecurity hanging over farmers in the Murray-Darling Basin is as bad as it ever was.
It is irresponsible for governments to wait until a crisis is upon them before they act. By that stage, the financial and social cost to communities is traumatic. My understanding is that, since 2014, farm household allowances have assisted over 10,000 people. As at the end of 2018, just over 5,000 people were still receiving support. We also heard yesterday in question time that around 600 recipients had had their payments ended, and a further 500 will have payments terminated by Christmas. It seems incredibly short-sighted and callous—in a worsening drought period, with calls for increased assistance coming from so many sectors—to end farmers' government assistance payments. I simply cannot understand that logic. I would have thought that this would be a time where, if anything, we would be going in the opposite direction—yet we are not, under this government.
Of course, when farmers are struggling financially, it affects whole communities and industry sectors. We just heard the member for Ballarat talking about the Drought Communities Program. Government assistance should not ignore the impact of drought on the workers and small and medium-sized businesses who depend on farming for their own survival. For them, the effects of drought are just as direct as they are for the farmers themselves. Those small and medium-sized businesses and the workers who work for them may not be farmers, but they are also affected by the drought, and their struggles, unfortunately, are all too often ignored. Then we see the social consequences of that, with many of them, whether they are business people or ordinary families, ending up in a financial mess, seeking help from support services, which they quite often can't get access to, and the like. In fact, I suspect that one of the reasons we have so many social problems in many country areas is because of the struggles of the farmers as a result of the climatic conditions and the like, which then flow on to the communities around them.
The other matter of real concern that has been raised in this place in recent months is the issue of the way banks have operated across this country. The government did finally agree to a royal commission into the banks, but the truth of the matter is that it only agreed to that reluctantly. It did so under pressure. One of the issues that farmers across this country have continuously struggled with is the way they have been treated by their banks. Not only did the government agree to the royal commission reluctantly—in fact, from my memory, it voted against it some 26 times—but even now it does not follow through on the recommendations of that royal commission nor ensure that the interest rate cuts that have been handed down by the Reserve Bank of Australia are passed on in full to the farmers. That's one of the measures that directly has an effect on the viability of farmers across this country.
The Morrison government has been in office for over six years. It claims to be a friend of Australian farmers. But that is a very shallow claim. I've just spoken about the greedy banks gouging farmers and causing some of them to lose their farms, but it's more than just that, when you look at the track record of this government. The banks are just one example. I said earlier that this is a government that doesn't have a policy with respect to climate change. Climate change will mean that there will be more devastation, whether it is in the form of longer or more frequent droughts, or in the form of floods or tornadoes and the like. We know that drought has been one of the issues that this country has had to grapple with, particularly in the last two decades—and, I believe, more so than ever before. We hear this government constantly talking about building more dams. They've been in office for six years, and I'm not aware of one single new dam being built. So it's one thing to talk about having a policy and a strategy and to make promises to people to try to suggest that the government is responding to the needs of the farming community, but it's another to actually see what they are doing when they're actually doing nothing.
I said earlier on that I spoke about the Murray-Darling Basin only a couple of days ago. The Murray-Darling Basin Plan is now in shambles. Over two million Australians live within the Basin, mainly farming communities, and I see no clear direction for those farmers in that plan. We heard only in recent days about the response to the dairy industry and how it's caused a major problem within the National Party, the junior coalition member of this government. In fact, I understand that, as a result of some suggested changes to the dairy industry that ought to be made, the National Party has its own leadership crisis to contend with. This is a government that has been in office for six years and it hasn't dealt with the dairy industry. We have absolutely absurd claims that farmers are being forced to compete with mining companies for water. There is no way that most farmers can compete with mining companies for water and pay the kinds of prices that the mining companies are prepared to pay. It's not a level playing field anymore, and the farmers will simply not be able to compete on that basis.
We've also heard other speakers today, time and time again, say this is a government that does not even have a drought policy. In a country that relies so heavily on farming in climactic conditions that make farming so insecure, it is incredulous that Australia does not have a drought policy. What we have is a government that has a knee-jerk response to each crisis as it arises. Talk of a drought policy by referring to a $5 billion or $7 billion drought fund is absolutely meaningless when, as the member for Ballarat also quite rightly pointed out, that's not the amount of money that is being made available to farmers across this country to assist them through a drought period. In fact, that to me is shameful dishonesty on the part of the government—to purport to be supporting farmers with that fund—when we know that all the farmers get out of it is the interest that that fund accrues.
The last issue I will touch on with respect to how this government has ignored farming communities is the government's failure to provide decent health services and get health professionals into farming communities and regional parts of Australia. This is a government that has had six years to fix the rural health crisis and it has failed to do so. When farming communities are struggling because of drought or other climactic issues, of course they will need health services to a higher degree than at other times yet, again, we see reports in the media today and I hear stories on a regular basis about how accessing health services in regional Australia is becoming more and more difficult.
The opposition has moved an amendment to this legislation and I will be supporting that amendment. In summary, many members of this government represent the very communities that are going to be affected the most by the drought. I would have thought that they would have been in touch with their communities more so than other members in this place because they represent them. And yet, in the last six years that they have been in government, I have seen farming communities struggle from one crisis to another and I don't see a cohesive strategy to deal with that. We had the National Farmers Federation come to Canberra yesterday, I believe—that's what the reports say—and speak to the Prime Minister and to other senior ministers. It took the National Farmers Federation to bring the whole notion of a policy or of a strategy to deal with drought to the government. It should have been the other way around. This is not a new concept, and it should have been the government that led in respect of establishing a national strategy to deal with drought. The situation, in my view, is going to get worse in the years ahead of us. I say that because I have faith in the science. If that is the case, I don't want to see our farming communities struggle, because, as I said in my opening remarks, the farming community is essential to the prosperity and wellbeing of this nation. We need to ensure it remains that way, and that will happen only if we have a national drought strategy.
The proposal put forward by the previous speaker—that the government should, effectively, know what's best for every particular nook and cranny within the agricultural sector—is a load of rubbish. To have an open-door policy; to have lines of communication with the NFF, who are the peak association for our agricultural sector; to have them develop a policy that is most pertinent and appropriate for the struggle of each particular sector—that is what we as a government need. We need open lines of communication to every peak association within the agricultural sector. Let those peak associations design the support packages for what is best for each of their areas and bring those support packages to government, so we can assist in the way the industry thinks is most appropriate, not in the way that some group of politicians who have had a brain snap think might be best for the sector. It's what this government has been very good at doing.
The Farm Household Allowance is not just about drought. In fact my first example of the Farm Household Allowance came just prior to the election in 2016, when the milk price collapsed and clawbacks were put in place by two of our major processors, claiming that they had overpaid our dairy farmers. They were demanding that hundreds of thousands of dollars be repaid to them. The Farm Household Allowance was the mechanism we used to support farmers through that time. This support package we have in place needs to be adaptable under different circumstances. We never envisaged that this would then run on into an ongoing drought; however, now that it has, and farmers are getting hit from one area to another, it is appropriate that we broaden the qualifying criteria and make it more accessible to more farmers.
That's what we've done. We've lifted the off-farm income test from $80,000 up to $100,000. That's very important. We've lifted the assets that you're allowed to have tied up in the value of your farm from $3 million up to $5 million. We've extended the time you're allowed to be on Farm Household Allowance firstly from three years out to four years in a lifetime and then made it even more accessible by making it four years in any 10. This support has been broadened and expanded. We now have the exit packages so that, as people do transition off Farm Household Allowance, they have the one-off payments of $7,000 or $13,000, plus a little bit. These are some of the things that are really important for our people. But, before we think that putting in place support packages is enough for our people, it's not. It's more important that we first look at policy opportunities and ways we can further assist our farmers during times of hardship.
If you're in the southern Murray-Darling Basin areas, this all pertains to water policy. Are we doing everything we possibly can with water policy to enable our farmers to farm? It's good to hear the previous speaker, representing the Labor Party, suggest that we should be doing more in relation to building dams. That's very refreshing—that we're getting criticised by the Labor Party for not doing enough in relation to building dams! We would like that sentiment to be echoed throughout Queensland. We would love that sentiment from the Labor Party to be pushed harder throughout Victoria. It's good to see that the New South Wales government have come on board to partner with the federal government to build dams in New South Wales. But, if that's the stance of the Labor Party, then we're very happy that they have taken that view.
We also have to look at other ways of getting water to farmers. In the Murray River and the Goulburn River areas of Victoria, this might mean looking at using environmental water in dry years in the way that it was first explained to the Australian people under John Howard, when he had the view of putting together a national strategic plan instead of just this ad hoc arrangement where various governments around Australia were rushing off to buy indiscriminate parcels of water. Therefore, Prime Minister Howard at the time thought we needed to put some strategy around it, instead of these indiscriminate buybacks. When we put this strategy around it and put together a plan where water is taken out of agriculture and put into the environment, in dry years we should make allowances for that water to be returned to agriculture to enable farmers to farm. If we enable farmers to farm by using water in a more flexible manner, we're not going to need to supply farm household allowance to a whole range of farmers, because they're going to be able to fend for themselves.
This is very critical piece of support that the government is putting in place. Minister Littleproud, the minister for water resources and drought, is talking very clearly about a three-pronged strategy that we as a government are adopting. That is about providing, here and now, farm household support, and low-interest loans that have the capacity to save farmers in the vicinity of $30,000 per annum. We have farm household allowance, which is in the vicinity of $26,000 a year over a four-year period—that is, over $100,000.
A large proportion of the farmers that have transitioned out of farm household allowance have indicated it made a significant difference to their ability to stay in the farming sector. After transitioning out—hopefully, on the back of a couple of good years and profitability returning to their business—they've been able to look back and reflect that the farm household allowance came to them at a very crucial time and was a major reason why they were able to stay in agriculture. There is no doubt that this program has had wide-ranging impacts. Over 12,700 farmers have been part of the Farm Household Allowance Program. That has cost over $365 million during that period up to 4 October 2019. There has also been an additional $44 million for supplementary payments in recognition of the severity of this drought.
This program has been absolutely crucial to the ongoing viability of our people, certainly in my electorate of Nicholls. All of them would rather not be on this program. All of them have expressed some frustration with the complexity of getting the FHA—and we were able to acknowledge that, and it's a positive thing that the applications process has been, effectively, cut in half. It is still regarded in the same light as welfare support, even though we understand that it is entirely different. But the process of gaining this financial assistance does mean that we ask people to jump through a lot of hoops and provide an awful amount of their financial positions and financial structures. I understand that many farms are set up with trust arrangements, and this does add complexity to the process of being assessed for the farm household allowance. We do ask that people do not self-assess. We understand there are rural financial counsellors out there, who are prepared to help, and we understand that every member of this House is also prepared to help farmers in their patch, in any way they can, with their application for the farm household allowance. It is something that has been incredibly valuable.
I also need to re-stress this issue: that right now, this drought tightens its grip on our agricultural sector and our farmers and our farming communities. The point that's been well made is that this is not just about the farmers; this is about the communities that support our farming sector. Certainly in my electorate many of these small communities have been built around the dairy industry and, to a lesser extent, the fruit growing regions of the Goulburn Valley. So these communities are also the beneficiaries when it comes to giving people the farm household allowance to enable them to put food on their table and have that little bit of money swim around the community, which, in fact, it does. We have to stay fully committed to our farming communities.
I need to reinforce that, before we look at some of the things the NFF are talking about—that is, exit packages and maybe reskilling programs—we have to look under every rock and every hollow log to see if there's another way that we can actually help our farmers. If we happen to find an opportunity to assist with water policy and we are able to become more flexible with the water that currently exists within the agriculture sector, the investor pool or the environmental pool, then I think we owe it to our farmers to put the politics aside and look at the ways we can make water available to our farming sector in these incredibly dry times. If we come into this place and say that we all support our farmers and want to do everything we can to help them and then turn our back on them because we're not prepared to give them an opportunity to access the water that's flowing past their doors, flowing past their paddocks then we are simply politicians with hollow words. We have an opportunity to act in the Southern Basin. We have an opportunity to do something to help our farming sector. Everyone in this House has to have a genuine think about if it's just hollow words of support for our drought-affected farmers or if we actually want to change water policy to give them the water they need.
In Victoria right now, another element has been thrown into this, and this is the proposal that's been put forward to build another dam—that is, to turn little buffalo into big buffalo, which will effectively grow the size of buffalo dam by about 25 times. This is something that could lead to over a thousand gigalitres of water being held in storage. Again, this is something the Victorian government needs to come on board for and be supportive of. This is another way that we can capture more water in the heavy rainfall events and deliver it to Lake Nillahcootie to supply not just Victorian farmers but also South Australia and New South Wales with a more secure supply of water. Surely this is a project that needs to be looked at and examined. If it stacks up, then we need to see the funding flow and we need to see state governments prepared to get off their backsides and get to work and create further water storages to help our drought-affected farmers through these very, very troubling times.
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. The drought may feel a long way away for city dwellers, but for many people in my electorate of Macquarie, on the fringe of Sydney, it's very close to home. We might only be 70 kilometres from Sydney's CBD, but we have around 500 businesses in the agricultural sector employing around 1,000 people between them. That includes cattle producers, orchardists and vegetable and produce growers. We've also got Western Sydney University and the Hawkesbury campus, with its focus on agriculture and innovation in agriculture.
This drought, which people are saying will soon be the worst drought since European settlement, impacts in a number of ways. It impacts directly on local farmers who are coping with less water and higher costs; that is affecting their production and their profitability. It affects the businesses that supply those farmers, who are much less likely to be upgrading tractors and equipment in difficult times and are cutting costs where they can. It flows on through the whole local economy. When you drive past paddocks and dams every day, there's also greater awareness. Of course, everyone appreciates that things are so much tougher across the ranges. There's certainly nothing much positive coming from forecasters about rain throughout summer, and there is therefore huge empathy for the farming communities who are suffering. The government didn't need to spend $190,000 on an empathy plan to make that happen, as it did with the Inland Rail project; people do understand.
There is real sympathy for the plight of farmers and little sympathy for a government that likes taking photos with farmers but whose claims on drought funding sometimes just don't stack up. I think the best example of that is this: the Prime Minister keeps banging on about his $7 billion drought package, but we've learned that $5 billion of that is locked away in a fund for another 10 years and that only $100 million is going to be spent per year—so it's a $100 million amount, not a $5 billion amount, to be spent. And the other $2 billion is actually loans. I really think the Prime Minister has to be a bit more up-front about what is actually being provided to people.
I've listened with interest to Senate estimates on the Future Drought Fund. It's designed to fund research and other things that are really worthwhile doing; there is no doubt about it. But it's not actually providing immediate support to farmers and their communities, and it won't start until 1 July next year. So the question has to be asked: what are people going to do until then? That is why we will be supporting these extensions and improvements to the farm household support program, because they are terribly needed. But this isn't enough.
One of the reasons some communities are missing out on drought funding is that they don't have quite enough people involved in agriculture. I was stunned to hear that the formula that is applied is being applied so rigorously. You're required to have a minimum of 17 per cent of your community employed in agriculture. There are communities all around Australia that are dreadfully drought affected, but they're missing out on funding because they only have 16.9 per cent of their population employed in agriculture. We need communities' needs to be understood, not an inflexible percentage to be placed. The government really needs to think about how to make the support packages that they have available and accessible. We support this increase in farm assistance, because we believe there are people who need immediate support. But we also need longer-term planning and action.
In terms of immediate support, it is extraordinary how my community have stepped up to provide immediate support where they see a need. Groups like Hawkesbury Hay Runners, set up by Dan Naethuys and Josh Stephenson, are contributing to the immediate response. Earlier this year their volunteer truck drivers delivered 50 round bales to Moree, to help out, and they've been collaborating with Animal Welfare League NSW to provide some hands-on practical support. City Slickers Appeal, another Hawkesbury charity, has been active for around 18 months after Wade and a group of Ebenezer friends realised that they could help, that there was something they could do. Their work was recognised in a Hawkesbury Australia Day award earlier this year. When I spoke to Wade, he said that he realised just how hard things were in the bush and he simply wanted to show country people that city-slickers did actually care about what was happening past the mountains. Ever since then, Wade and his team have been going about their business, just trying to help as many communities and farmers they can, delivering bales, food and all sorts of supplies regularly to the bush. They're well supported by the very generous Hawkesbury community in which they live.
These are people who can see there is more to be done, in spite of the Prime Minister's claims that it's all under control. In the absence of rain, a promised dam just ain't gonna cut it. Dams are great when it is raining, but we're kind of beyond that point. What we're missing is a comprehensive approach to tackling the impacts of the current drought and then a longer term plan to manage the changing conditions that farmers are clearly facing. The National Farmers' Federation thinks there needs to be a plan. The Nationals think there needs to be a plan. It's just that the government can't quite see that things are at a point where in fact you do need to reach out and work with a whole range of people. Guess what? That includes working with us, across this parliament, to put a long-term strategy in place.
One of the things we need to see is the report by the Coordinator-General for Drought, Major General Stephen Day, which the Prime Minister refuses to release. That is mind-boggling. He tells us it's the basis for the decisions government is making, yet we're not privy to what is in that report. Keeping secret the reports you receive isn't a way to work collaboratively or for there to be any confidence in the decisions the government is making; nor is bluffing your way through by saying, 'We're doing heaps,' when those on the ground are having a very different experience. That's why we've proposed a drought cabinet, modelled on the war cabinets chaired by Menzies, Curtin and Churchill, creating a forum that allows decisions to be made on a bipartisan basis. These are dark days for farmers and the farming communities that rely on them. That's also going to flow through to every person who buys food. It's only a matter of time before the crunch is really felt. We can't wait for that point. This situation goes beyond what we've seen in the past with drought and requires a comprehensive and urgent response now.
I will address one final point. It's often said by those on the other side that our side doesn't understand the bush and farming communities. That claim is made often, as are many others that are simply not based on any evidence or fact. I put on the record that as, a small-business operator, my very first client was New South Wales Farmers. This was back in the 1990s. For 25 years in the course of working in my business as a media and presentation consultant I was privileged to work with a multitude of agricultural businesses. Sometimes they came to me because things were really tough in their sector and they needed help; at other times things were going great guns and they wanted to spread the word on what they were doing and needed some skills to do that. What it gave me was the opportunity to really see inside some of these bigger agricultural businesses and smaller producers, the individuals who were there working on their properties. I think it does this parliament a disservice that those opposite think they have all the knowledge about farming and rural communities.
There are parts of my community which you look at and you think, 'This is absolutely remote wilderness.' There are other parts where you think, 'This is rural agriculture.' I really urge those opposite: work with us. We do have some knowledge and understanding, and, what's more, we have the goodwill to find a way through this very difficult problem, which is not your problem alone; it's our country's problem, and it's something where we should all be working together to find a resolution. There has been a lot of talk about what the solutions might be for the best way to come to an agreement on these, because nothing is going to happen in a single term of parliament. Anything that really will make a difference in the long run is going to require ongoing support. You can't have governments chopping and changing at will. I urge you to set your pride aside and come and work with us. We really want to help. We have Australia's best interests at heart.
I'd like to briefly thank the member for Macquarie for that excellent speech and I would like to echo her sentiments. We remain ready on this side of the parliament to stand with the government to address the drought crisis affecting farmers across our nation. The member for Hunter and the Leader of the Opposition have proposed a 'drought war cabinet'—a joint effort to address this issue. That offer stands ready. It continues. Let's work together as a parliament, united, to address this issue.
I rise today to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019, and the amendment moved by the member for Hunter, as a representative of farmers who are battling drought, principally on the east coast of my electorate. It may surprise some in this place, but Tasmania does experience drought. I know the pretty pictures show we're an island of green and lush mountains and beautiful rainforests, but the east coast of my electorate and of the state is dry, and it's been dry for years. We've had record low rainfall and farmers are struggling. Farmers on the east coast of my electorate are haemorrhaging money as they try to prop up their businesses and feed their livestock. Their mental and physical wellbeing is undermined. They are desperately worried for their future. I've met with several of them in recent months and have attended a drought awareness community meeting in Cranbrook, as recently as a few weeks ago. Cranbrook is on the east coast of my electorate, smack bang in the middle of the driest region in Tasmania. From what I heard when I spoke one-on-one to farmers and others at the meeting, it was clear to me that these people, this community, are hurting, and hurting badly.
Tasmania is a state of microclimates. That's fairly normal. The west coast has always received much more rainfall than the east. But this year, the extremes were amplified. On the west coast, the town of Strahan—some members may be familiar with it and with its rainforests—had a record high winter rainfall. The east coast had the opposite. It's hard to believe how extreme the extremes can be in a state that is so geographically small. The west coast had record high rainfall and the east coast had record low rainfall.
This bill is welcome. It increases the time for which a person affected by drought can access farm household allowance from a maximum four years over their lifetime to four years in each specified 10-year period. It introduces an expanded off-farm-income offset, broadening the circumstances in which it can be applied and increasing the upper threshold from $80,000 to $100,000. Finally, it will serve to introduce a one-off lump sum payment to those who have exhausted the allowed days of the allowance, by July 2020. These are certainly good initiatives. Any support given to those living with drought is noble. But let me be clear: It's not sufficient. It isn't sustainable. It has no impact on the broader issues, which the government seems to be ignoring. In Little Swanport on the east coast, wool producer Stuart has been destocking and feeding sheep since May. He reports he has spent more than $50,000 on feed. If rainfall does not increase, Stuart is going to have to destock further and keep only his breeding stock. It will take him years to recover. Closer to Cranbrook, on Steph's cattle and sheep property only two of the 20 waterholes contain water. She reports that over the past five years the region has experienced less than half its annual rainfall—2014, she reports, was the driest in 118 years. Down the road, Alan, who also farms sheep, acknowledges the persistence of the dry. 'It's just hung on. There's no break in between,' he told the ABC last November.
In the south-east of my electorate it was reported in August this year that Bangor Vineyards' Matt Dunbabin, a former Australian Farmer of the Year, was having to invest in a $100,000 10-kilometre pipeline, simply to ensure that his grape vines continue to have a reliable source of water. It's expensive and a lot of work but cheaper than letting his grapevines die. The reality is that farmers across Lyons and across Australia are experiencing similar situations. There is no rain. There is no water. There is no let up from the dry, the extreme weather conditions and the drought.
The Prime Minister has stated several times that the drought is his top priority. He acknowledges the severity of it, the implications of it. He has a minister for drought. Previously he had a drought envoy. We still have not seen the reports or the results of that expensive, nonsensical marketing exercise that was generated—it seems clear now—only for a headline. We have seen nothing in public about what the drought envoy was supposed to have achieved.
Drought is not a new phenomenon to Australia. Our farmers and rural and regional communities have always had to contend with the realities of fickle and extreme weather, and it was always projected they will continue to be a prominent feature of Australian weather. What was not expected, however, was the consistency of this drought or just how extreme it has been. It May last year, a paper was published by the University of Melbourne in collaboration with the Australian Research Council's Centre of Excellence for Climate System Science. This paper demonstrates that Australia's recent drought experiences could be the worst drought seen on the continent in 800 years. The broader problem is Australia does not just have to face the challenges caused by drought. There is also blistering heat. The lack of rainfall has created an environment susceptible to bushfires and low dam reservoirs, and extreme temperatures mean we are not in a position to combat them.
Parts of my electorate not known for being overly dry—the Derwent Valley and the Central Highlands, which in winter are covered in snow as often as not—were ravaged by bushfires earlier this year, burning more than 200,000 hectares of land, including some of our state's most sensitive and unique natural areas. Vegetarian that has evolved over millennia went up in flames. In May 2018, many Tasmanian regions, including our capital city of Hobart and another part of the Derwent Valley—not the part that was hit by bushfire—were hit by floods, causing widespread damage and costing councils millions of dollars.
Across the world, we are seeing record-breaking temperatures and extreme weather becoming more frequent and more normal. This summer might well be the hottest summer in 100 years, but we need to change the way we think. We shouldn't be thinking that this is the hottest summer in 100 years but should realise that it could well be the coolest in the next 100 years.
Our farmers are resilient, optimistic and adaptable. There is only so much they can do in the wake of these experiences. The science, the data, the mapping and the research all show that our weather is going to get hotter, it's going to be drier and there will be more extreme weather events—more floods, more fires, more droughts. It's likely to be even more unpredictable in the years ahead.
Government needs to step up, take responsibility and do more to help those who are affected by the drought. While this bill certainly provides some assistance, it is not enough. I go to the member for Macquarie's statements and those of the member for Hunter. The government has made much of the $7 billion drought fund. Not one cent of $7 billion goes to farmers. We don't argue on this side against the merits a drought fund, about the $100 million to be drawn down in future years for drought infrastructure. We don't argue about the need for that or about the good sense in drought infrastructure, but stop telling farmers that it's for them. It doesn't help farmers on the ground, and it certainly does not help farmers who are affected by drought right now, today. Not one cent of it goes to farmers, so stop telling farmers that this is a drought fund for them.
Agriculture and our primary industries are critical to our economy. They employ tens of thousands of Australians in Tasmania alone. Around 10,000 Tasmanians are directly employed in agriculture and contribute about a third of gross state product. This does not include the money and jobs created through value-adding and downstream industries and processing. Last night, the parliament got quite literally a taste of some of the agricultural produce that Tasmania—
Thank you, member for Moreton. I'll take that interjection, that 'Hear, hear!' The Flavours of Tasmania was held in the Great Hall, a wonderful exhibition of Tasmanian produce, much of it from my electorate.
Agriculture affects a lot of people in Tasmania—a lot of communities—and a lot of them are vulnerable to increasing temperatures and unpredictable extreme weather. The fact is that the government have no plan for drought. Despite the minister, despite the envoy, despite the coordinator-general and despite all the research, they have no plan, they have no strategy. The backbench Nationals know there's no policy. They're sick of waiting to see one from their colleagues on the front bench. They're revolting, in more ways than one. Six years ago, the Liberals and the Nationals came to government and the first thing they did was abolish the Standing Council on Primary Industries, a formal body of the Council of Australian Governments. Under the last Labor government, the federal and state governments and the National Farmers Federation all agreed that existing drought architecture was deficient and we needed a coordinated national action plan. That was more than six years ago. The first thing the Liberals and the Nationals did upon coming to government, led then by Tony Abbott, the former member for Warringah, and his deputy, the current member for New England, was abolish this COAG process. What a different place we would be in today if that process had been allowed to continue. We would have a nationally agreed drought plan.
Where is the report from Major-General Stephen Day? He was appointed in a blaze of headlines to be the national coordinator for drought. Major-General Day did his job. He produced a report, with recommendations, that he has provided to the Prime Minister, but where is it? Collecting dust on the Prime Minister's desk. Why won't the Prime Minister release the Day report? Why won't he allow it to be discussed and debated? The Prime Minister's addiction to secrecy is causing uncertainty in the community, and others are filling the vacuum. In the absence of substantive drought action from the government, others are calling for a national drought plan. The NFF put its own ideas for one to the government earlier this week. Farmers for Climate Action are calling for a national climate change strategy, because, as we know, it would be foolish to have a drought plan that does not include a climate change action plan.
The discussion around climate and worsening weather should not be ideologically divided. The effects are real—it's based on science—and we can see them around us every day. The cost to our fellow Australians is real. The cost to the economy is real. Climate change is not about Left and Right. It's not about cities versus regions or latte sippers versus VB chuggers. Climate change affects us all and we must come together as a nation to do something about it.
I recently met with Farmers for Climate Action—a professional movement of farmers, agriculture and primary industry leaders, and rural Australians who want to ensure that action is taken on climate change. Farmers are on the front line of climate change and are part of the solution. They must be part of the solution. Farmers for Climate Action work directly with those on the ground to ensure that they have climate literacy. They encourage them to become advocates and teach them innovative and scientifically backed practices to adapt to a changing climate. The work they do is vitally important and the lessons they teach are valuable, but they can only do so much, and they must be listened to. Countries and communities across the world are implementing innovative practices and strategies that serve to alleviate some of the consequences of climate change. In Africa, we have the Great Green Wall, an ambitious project to grow an 8,000 kilometre natural wall of forest to combat climate change and desertification. A decade in and with roughly 15 per cent under way, the project is already restoring Africa's degraded landscapes, providing environmental outcomes, food security and jobs. Elsewhere in Africa, there are other attempts to restore landscapes and encourage water retention. Justdiggit, a Dutch NGO currently active in Kenya and Tanzania, is teaching communities how to modify their landscape through digging, to encourage growth and vegetation restoration, as well as water preservation for subsurface soil.
There's growing evidence that forest restoration can encourage rainfall, not only in places where trees already exist but also hundreds of kilometres away. Over the past 200 years, Australia has cut down more than 40 per cent of its forests, leaving a scarred landscape behind. To be clear, I support sustainable logging. I think the Greens' obsessive opposition to the sector is ridiculous. Sawn timber is a terrific carbon sink and a natural product we should make more use of, not less, in the construction of our homes and cities. When we cut down one tree, we should replace it with three, four or five. Some of those replacements should be destined for reharvest and others for reserve or reforestation, either here in Australia or overseas in places like Indonesia, Burma, Malaysia and the Amazon. Forestation is a major part of drought mitigation. I commend the bill to the House.
The debate is interrupted in accordance with standing order 43. The debate may be resumed later.
The House transcript was published up to 13:30. The remainder of the transcript will be published progressively as it is completed.