Sussan Ley (Farrer, Liberal Party, Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) Share this | Hansard source

I thank all my colleagues on both sides of the House who have essentially supported the Farm Household Support Amendment Bill 2007. The support from members has been pleasing to see. I also acknowledge the contributions members have made in speaking for their electorates—the people they know or the people they have represented in another capacity here in this place—and their understanding of what it is to experience a drought in rural Australia at this time.

It is correct that it is not the first time this government has offered drought assistance to small business operators—something that was raised by the member for Hotham and the member for Lyons—but it should be noted that this program is quite different to the one we offered in 2002. During this debate the issue has been raised that the assistance on offer in 2002 had low rates of uptake and that there were a number of concerns raised by the small business community. I acknowledge that. However, based on our learning from the prior assistance measures and the expertise that has been gained from delivering the exceptional circumstances assistance to farmers, the program is now much more in touch with the needs of small business operators. In very simple terms, the current program provides much more value to a small business operator, essentially putting them on exactly the same footing as farmers in EC areas.

The exceptional circumstances program for agriculturally dependent small business operators mirrors what is already in place for farmers. In the bill that has just been presented, we see the one component of income support, but business support or interest rate subsidies are also on offer to eligible small business operators. They have access both to the interest rate support and to the household support. In the 2002 small business program, only business support was available to small business operators suffering from the drought. Interest rate relief was available only on loans of up to $100,000, meaning that a maximum of $10,000 over two years could be received. Now small business operators can get interest rate subsidies on all their commercial debts, up to a maximum of $100,000 a year, just like farmers.

The 2006 assistance program also offers something new to small business operators: the income support outlined in this bill. On top of receiving funds to help meet the financial obligations of their business, agriculturally dependent small business operators may be able to receive up to $760 a fortnight for income support to help meet their household expenses. Exceptional circumstances assistance for small business operators is a demand driven program, and it is actually very difficult to predict just how many eligible applicants will walk through the door. But I travelled recently in south-west Queensland and I have to say, after talking to rural counsellors from the rural financial counselling services there, that there is a lot of interest and a lot of applicants, and I understand a lot of assistance will flow.

The program has been very well received and it is already proving successful. Since the program was announced in November 2006, just five months ago, over $5 million has been provided to over 280 applicants at an approval rate of 69 per cent. The small business exceptional circumstances program is only on offer until June 2008, as we cannot predict what the weather is going to do. We may see rainfall stay at extremely low levels or we may, if we are lucky, get some respite from this drought. By having an end date which has a regulation allowing it to be extended, we can review the program and determine whether it is still needed 15 months from now. If there is still an overwhelming need for support across Australia at that time, drought assistance for agriculturally dependent small business operators will continue to be provided.

Of course, providing assistance to small businesses suffering from drought is not just about money and it is definitely not about providing support for unviable businesses. This bill is really about maintaining Australia’s vibrant rural communities. If agriculturally dependent small businesses are unable to continue to operate due to drought, the communities they support will lose employment opportunities, local economies will suffer and hope will begin to fade. We are already seeing a shortage of skilled workers from rural areas, and young people from rural areas are also being lured away to the cities. By supporting small businesses in rural areas, we can reverse the current trends. We all know that once people leave regional Australia it is very hard to get them back. As a rural and regional member of parliament, I am sure I share with all my colleagues who represent rural Australia a dislike of the statistic that 80 per cent of Australians live within about 50 kilometres of the coast. We would like to reverse that trend.

Rural and regional communities are important contributors to the broader Australian economy. Through providing assistance both to agriculturally dependent small business operators and to farmers, there will be flow-on benefits to townships as they will continue to provide essential services and have some income to spend in other local businesses. While farm businesses have been the first group to experience the effects of the worsening drought, agriculturally dependent small businesses in drought affected areas are definitely experiencing hardships. You only have to study the transcript of the speeches of those who have spoken on this bill to see live local examples that really bring that point home. Without the assistance provided by this bill, the ability of some small businesses to service rural and regional communities may be at risk.

I want to address a couple of remarks made by members opposite. The member for Hotham said that this government has done little to prevent the causes of this drought. He refers to it as the worst drought in 1,000 years; it seems to be a phrase that has slipped into popular culture. The member for Hotham is a former Minister for Primary Industries and Energy and, indeed, in his remarks to the House, he demonstrated empathy and an understanding for farmers doing it tough. I am a little surprised at his saying what he did. It does appear to me that there is a Labor Party line that the drought is caused by climate change, the government will not act to fix climate change and therefore the government is responsible for the drought, which is really rather silly. It concerns farmers, and everyone in this place who represents farmers knows how hard it is for them at the present time, particularly when rather glib explanations about the causes of their circumstances are presented.

I just want to make it clear that, while the scientific consensus is that climate change is real, the extent of the contribution that climate change is making to this current drought event is unclear. Furthermore, the exact magnitude of the impact of climate change on future rainfall frequency and reliability is also completely unknown. The relationship between long-term climate change and short-term climate variability is complex and unclear. It is a topic of ongoing research. But, as a government and in the agriculture portfolio, we have well and truly got our eye on these issues. There is the government’s National Agriculture and Climate Change Action Plan; it is not the subject of today’s debate, but it does aim to build resilience and adaptability into the agricultural sector, reduce greenhouse gas emissions, identify and conduct further research and development, create awareness and communicate the important issues associated with climate change. I just wanted to place that on the record.

The member for Lyons talked about the terminology relating to the numbers of employees helped by this bill. He seemed to take exception to the fact that we defined a small business as having a maximum of 100 employees and suggested that that was not what a typical small business was. But by setting the number at 100 employees—and eligible businesses with that many employees would be very unlikely—we are helping all eligible small businesses in EC areas. And ‘small business’ is just a term; it does not mean anything in a strict statutory sense. I think it is a good thing that we have set the limit on the number of staff that would be employed by a small business at 100. In this way nobody falls directly under or over the bar, and we avoid the issue where there is a threshold reached and somebody does not fit in whereas somebody in a very similar situation does. It removes what could be a possible difficulty.

The member for Lyons also mentioned that drought support was not available in Tasmania. I will shortly be visiting Tasmania—I always look forward to talking to farmers when I am there—and, to my knowledge, no application for EC has been made by any organisation. An application would normally be made by the state department of primary industry or agriculture, if that is what it is called. As soon as an application comes forward from the state department, of course the federal government will consider both prima facie EC and then, in the context of the National Rural Advisory Council, a tour of the area. There is no way that Tasmanian farmers would be disadvantaged against any existing EC guidelines; I would like to give the member for Lyons that assurance.

In conclusion, I stand by the assistance that we have provided to farmers during the present drought, which, I guess, really began in most places at the end of 2002. Since then, New South Wales has received $710 million, Queensland $351 million, Victoria $257 million, South Australia $14.2 million and Western Australia $47 million—a total of $1.39 billion. And the program, of course, is still ongoing; exceptional circumstance recognition has been extended, along with the measure we are talking about today for small business, until June 2008. Again, I thank all my colleagues for the support they have shown for this bill.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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