Wednesday, 22 August 2018
Farm Household Support Amendment (Temporary Measures) Bill 2018; Second Reading
I table a revised explanatory memorandum relating to the bill, and I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
The Farm Household Support Amendment (Temporary Measures) Bill 2018 is a Bill to amend the Farm Household Support Act 2014.
The Bill proposes two temporary changes to the Farm Household Allowance program. Firstly this Bill proposes to pay a supplement to all eligible Farm Household Allowance recipients that is in addition to their fortnightly income support payments. Secondly, we will increase the farm assets threshold to a net $5 million. The implementation date of 1 September 2018 for the net farm assets increase will be supported by a Minister's Rule under the Farm Household Support Act 2014.
These temporary measures are designed to help our farmers in need in the short term while we undertake an independent review of the program. The review, to be completed in the first half of 2019, will provide further guidance on the design elements of the Farm Household Allowance into the future.
Australian agriculture is a story of success, resilience and prosperity. It is a significant contributor to the Australian economy and continues to be a strong performer. But right now Australia's farming families across a lot of the east as well as parts of the west, are going through tough times. And when times are tough, the government listens and lends a hand to those in need.
Farm Household Allowance has always been more than a social security payment – it's a package of assistance comprising income support, an independent financial assessment of the farm business, individualised case management, and an activity supplement that pays for advice and training. The safety net provided by this program ensures the government can appropriately support farmers in hardship while they take steps to improve their situation.
Increasing the net farm asset threshold to $5 million will give more farmers access to the Farm Household Allowance during times of hardship. It will help those farmers who have little or no cash flow access to assistance – assistance that provides them an allowance as well as breathing room to prepare for and adapt to change. It means these farmers will not have to sell their assets and risk taking away some or all of their future income producing capacity of their farm business. It also recognises that farm assets can be difficult to sell quickly and, during tough times, often sold for less than they're worth.
Increasing the threshold also helps those recipients already on the program. They can be secure knowing they will remain eligible for the program even if their farm assets experience an increase in value, but their cash flow remains low. They will not be placed in the situation of having to urgently sell assets to support themselves, potentially to the detriment to their future.
The government is committed to increasing the farm assets threshold as soon as practicable. To this end, we will develop a new Minister's Rule under the Farm Household Support Act 2014 that provides 1 September 2018 as the date from which the increase will take effect. Implementation arrangements will be in place by 1 October 2018 to allow assessment of these FHA applications from then.
Our proposed FHA supplement will be payable to all Farm Household Allowance recipients in addition to their existing payments, in two lump sums between 1 September 2018 and 1 June 2019.
Each lump sum will be $3,000 per person for members of a couple, and $3,600 for singles. This means if both members of a couple are receiving Farm Household Allowance between 1 September 2018 and 1 June 2019 they will receive $6,000 each, or $12,000 per household. For singles, the maximum amount payable will be $7,200.
Everyone who is on Farm Household Allowance is eligible for the lump sum payment. They don't need to apply for it, it will automatically be paid. If they receive FHA at any stage between 1 September 2018 and 1 December 2018 they'll get the first payment. Farmers on FHA at any stage between 2 December 2018 and 1 June 2019 will also receive a payment. People on FHA for both periods will receive the two payments.
No farmer who lodges a claim for FHA on or before 1 December will be disadvantaged. Subject to being eligible for FHA they will be back paid their FHA allowance to the date of lodgement and will also receive the supplement. Also, if they receive any FHA during the second payment period (2 December to 1 June 2019) they will receive the supplement.
The FHA supplement will give farming families what they sorely lack right now—cash. The additional disposable income will help put food on the table and cover basic expenses such as bills and school fees and will flow through to businesses in country towns doing it tough. As with the increase to the farm assets threshold, it will provide a safeguard for farm families that might otherwise be forced to liquidate farm assets to support themselves, and deliver significant benefits to them and their communities.
These changes to the Farm Household Allowance will be supported by an additional $5 million to the Rural Financial Counselling Service. The RFCS is there to assist farmers, to help them understand what's available. They sit at the kitchen tables and get under the bonnet of farmers' businesses to help them make strategic decisions. The RFCS is not a bricks and mortar service. Staff are highly mobile and can visit people on-farm or in town. These funds will provide additional financial councillors and support for farmers, particularly those applying for FHA for the first time. This will be of enormous value to farmers who are eligible but have not yet applied.
The Department of Human Services also has specialist staff available through the Farmer Assistance Hotline (132 316) and Farm Household Case Officers who provide assistance and support to farmers and their communities. Where a farmer is facing genuine hardship, and full claim details have been received by the Department of Human Services, a decision can be prioritised.
As a result of the continued dry conditions we are experiencing a surge in applications for FHA. The Department of Human Services has been working to identify ways to make the application process simpler and quicker for farmers. In the meantime, to ensure that much needed money gets to our farmers as quickly as possible, the Department of Human Services will be looking at a risk-based approach for processing applications. Post-claim checking will limit the risk of overpayment that would need to be repaid to government.
In June this year, we extended the Farm Household Allowance program from three to four years, as we knew some farmers and their families had been, and continue to be, subject to pressures extending beyond a cumulative three year period.
We are also investing $11.4 million in mental health support initiatives with additional funding for Primary Health Networks and community-led initiatives through the Empowering Communities program.
All of these measures are immediate and material. These commitments, in addition to our most recent and further announcement, brings our Government's commitment to farmers experiencing drought to $1.8 billion.
In seeking to increase the net farm assets threshold and introduce the FHA supplement, this Bill further demonstrates this government's ongoing commitment to ensuring farming families and communities get the support they need for the conditions they are facing in rural and regional Australia, to recover and get back on their feet.