Stewart McArthur (Corangamite, Liberal Party) Share this | Hansard source

I would now like to move to the impact of the drought in Corangamite and in Australia. One of the remarkable things about Australia’s current strong economic condition is that it has occurred at the time of one of the most severe droughts on record. In south-west Victoria the drought is the worst in living memory for most farmers; in my own judgement, it is worse than the 1967 drought. Fodder is in very short supply or non-existent. Farm water is scarce; at some of the farms I have visited, it is non-existent. In past years, severe drought would have precipitated a significant economic slowdown, but the more flexible and diverse domestic economy established over the past 20 years, together with the disciplined economic policy of the current government, has enabled the nation to continue to grow and generate new jobs and wealth. The budget papers show that farm GDP is projected to fall by 20 per cent in the current year. Mr Deputy Speaker Adams, I would have thought it might be even more than that in your state of Tasmania and on the eastern seaboard, where the drought has been quite serious. A partial recovery from the drought on the back of more average seasonal conditions and rainfall is expected to add half a per cent to national GDP growth over the next year. The breaking of the drought would make a huge difference and be yet another factor contributing to a better economy.

Whilst the economy remains in good shape, our farmers have experienced the full impact of the drought. South-west Victoria has qualified for exceptional circumstances and eligible local farmers are able to apply for EC assistance to provide a helping hand to manage through and recover from the drought. The Howard government provided a combined total of $1.2 billion in EC drought assistance last year and this year; the budget provides for assistance of $688 million in 2007-08.

Rural Finance Victoria hosted an event for farmers at Colac last week. I learnt that 127 farmers across south-west Victoria had successfully applied for EC interest rate assistance valued at $3.4 million. There is an 81 per cent approval rate of farmers’ applications for EC interest rate subsidies in Victoria, with an average grant of $25,000 per farm. This assistance is making the difference for farmers who are receiving it, and in some cases they are on the breadline. An additional allocation of $205 million over four years has been provided in the budget to provide professional advice to drought affected farmers. I commend both of these initiatives strongly, and I have been pleased that the government has responded to the drought stricken farmers in my electorate of Corangamite.

It is important to recognise the important contribution our farmers make to managing Australia’s environment. The budget extends the Natural Heritage Trust until 2013, providing $2 billion to improve water quality and combat land degradation. An additional $112 million has been allocated to landcare in the budget. I commend that initiative, because the Howard government initiated the Natural Heritage Trust. It has been very effective in Corangamite and, in my judgement, the allocation of money has been very well utilised by the Corangamite Catchment Management Authority and also by farmers.

The government has strong credentials on practical environmental protection, as demonstrated by our ongoing commitment to the Natural Heritage Trust and landcare. These programs are providing for an army of people on the ground who are working to fix the environment, but often these initiatives are ignored by commentators and those who are alarmist about environmental matters. Last week I joined the board of the Corangamite Catchment Management Authority to inspect some of the works to which the Commonwealth has made a contribution in relation to the environment, water catchment and the removal of willows from the streamside in the depths of the Otways. These programs, which I saw firsthand, are helping the future of water catchments and the future quality of the water. The removal of 72 kilometres of willows along those catchment creeks was a very practical and sensible measure funded by both the state and the Commonwealth.

Fifty million dollars has been provided for a new long-term environmental stewardship program whereby farmers will be paid to help preserve and restore sensitive environmental assets. This is an innovative future-looking policy that has been welcomed by National Farmers Federation President David Crombie, who on 8 May said that it is:

… an historic partnership that acknowledges farmers’ important—and growing—contribution to the environmental, economic and social lifeblood of the nation.

I also add my support for this initiative whereby farmers and landholders are very much part of this program to encourage the stewardship of those natural assets. In the long run, it will be the encouragement of those landholders and stakeholders that will make these environmental policies work.

In closing, I would like to look at the Labor alternative. I listened very closely to the budget response by the Leader of the Opposition, and it was remarkable that Labor had no alternative budget to put forward. They accepted the Howard government’s budget—as indeed they should, because it is a very good document in the nation’s interest. Since that time, we have learnt that Labor has no income tax policy, as demonstrated in the parliament this afternoon, because the Prime Minister and the Treasurer have the tax balance right. The Leader of the Opposition received sympathetic and uncritical reporting of his budget response—in particular, his extraordinary claim that he would not outspend the government’s budget. This far-fetched claim was repeated again in today’s media. The cold hard truth is that, by accepting the budget and promising additional expenditure—as the Leader of the Opposition did in his budget response—Labor are in fact proposing to spend more and run down the surplus. Labor cannot hide behind the dubious savings concocted by the member for Melbourne, who made a contribution to the parliament a few moments ago. As a member of the former government, the member for Melbourne would know that savings are very difficult to achieve. His suggestion to the parliament that he could get $3 billion worth of savings is completely without foundation. (Time expired)

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