Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

The member for Murray and the member for Mallee know that I too have a good knowledge of the farming communities that they represent. In fact, I spent some time with both of them as a supplementary member to the Standing Committee on Regional Australia, when we toured the basin and spoke to communities throughout. So I have no doubt whatsoever that they bring their genuine concerns into the House by raising this motion that is before us tonight.

I want to begin by outlining and clarifying some of the facts, Mr Deputy Speaker Adams—facts that you yourself referred to in your own contribution to the debate. Firstly, the exit grants offered time-limited, one-off assistance for those farmers whose farm enterprise is or was located in an area covered by an exceptional circumstance declaration on or after 1 July 2010. The program was clearly stated to be available until 30 June 2012, or until funding was taken up—and I repeat: or until funding was taken up. The program indeed did close in August of 2011, after additional funding to the tune of $4.4 million was allocated to the original of $9.6 million.

The program was closed when it was fully subscribed. It is as simple as that. The government has subsequently said that any person who believes that they have been adversely affected by the closure of the program is entitled to seek a review or appeal—and I think that is quite appropriate. I also understand that the government is working with individuals to lodge act-of-grace claims, meaning that each case will be considered on its merits. As both the member for Mallee and the member for Murray have said, they have raised this matter with the minister, and I understand that the minister is looking at those matters. Therefore, I think everything that could be done is being done by the minister right now. And I certainly accept that both honourable members are waiting for responses from the minister. I want to talk about this issue in a broader context, however. I said at the outset that I toured the Basin with the member for Murray as a supplementary member of the Regional Australia Committee that looked into the Murray-Darling Basin issues more broadly. I and other members of the committee heard from individual farmers and rural communities right throughout the Basin. There was no doubt in my mind whatsoever that those rural communities were doing it tough. I also understand from more recent reports that, as a result of the good rains we have had in the last 12 months or so, things are looking up and in many parts of the Basin there has been a substantial turnaround. However, I accept that for some they had sunk so low that even the end of the drought has made their own recovery near impossible.

The situation has, of course, been further compounded by two other events. Firstly, the global economic recession, which has undoubtedly put a damper on farm exports from this country. Secondly, the high Australian dollar. The high Australian dollar has had, I guess, a twofold effect. On one hand it has meant that our own exports have had to compete with exports from other countries and, therefore, sales of our own produce has not been as easy as it might have been if the Australian dollar was lower. Secondly, it has meant that the imports of foods that compete with the very foods that our irrigators grow come in at prices well below what we produce here in Australia and, in turn, it keeps the prices back home much lower than they would otherwise be as well. So the Australian dollar, as I say, has had a double effect, and then to that you add the global economic recession and, thirdly, the long drought. You can understand why the irrigators in the Murray-Darling Basin area have been doing it so tough.

But I am not, however, convinced that exit grants are the way to go. Whilst I accept that they have been a strategy and a policy area that this government has adopted, I have to say it would not be my preferred policy area if I were determining how we should assist people in the same situations. Interestingly—and, Mr Deputy Speaker Adams, you made this point yourself—the Productivity Commission has also commented about the use of exit grants and generally, I think, made the point that it is not so supportive of them. In fact, I understand it determined that they were ineffective and should only be used sparingly. My concern with the use of exit grants relates to a couple of matters. One is a matter that the member for Murray would know only too well and that is this: in the course of our work throughout the Murray-Darling Basin we were constantly told that the water buyback provisions that the government had committed to were causing a term we constantly refer to as 'the Swiss cheese effect', where it was causing inefficiencies throughout irrigation communities. It was a matter that was raised with us time and again.

It seems to me—and I cannot understand the difference—that the water buybacks were a form of exit grants. What they enabled many of the irrigators to do was to sell their water, exit their property although retaining ownership of the land but retaining a property that was no longer productive as a farm. And, if it was producing anything, it was certainly not producing the kind of income that would make it sustainable. So it was a form of exit grant and we were criticised for doing that. We were, in fact, told that we should stop providing money for water buybacks because it was having a detrimental impact on those communities. It seems to me that the use of money to directly assist people to get off the farms has exactly the same effect. If you assist a farmer to get off the farm then surely, whether you buy the whole lot or not or whether you simply pay the farmer to leave the farm, the end result is that you have one less productive farm in the system and therefore the so-called Swiss cheese effect that we were criticised for putting money into is being duplicated. I frankly see little difference, other than the management of the process—but the outcome, I believe, is exactly the same. For that reason, I do not believe it is the best way to assist farmers. The second point that concerns me is this. Given that we know that in the future there will be a greater demand for our food resources because of population growth around the world and given that the Murray-Darling Basin generally is a place where I believe our farmers produce some of the best food in the most efficient manner anywhere in the world, we have an enormous opportunity to ensure that in the future we might be in a position to supply food not only for Australia but for the rest of the world, and in so doing boost our own economy. In 1950 the agricultural produce in this country amounted to some 30 per cent of our GDP; it is now just over 2.5 per cent. That is how far it has dropped back. But we have an opportunity in the future to rebuild that, and we are not going to do so by paying farmers to get off the land. We need to find alternative methods of supporting them during the time that they go through difficulties, without throwing out the opportunity that the farming sector presents to them and to the nation as a whole in the future.

This is a very serious issue because, quite frankly, it is not only about opportunities for this country; it is about opportunities for the world, where we know we have got some of the best farming methods available at our disposal and our farmers have proved that they can produce the food that is necessary. Given that, even though it might change from one period to another, if we now have an opportunity to get these farmers back on their feet that is exactly what we should be doing. It does concern me that farmers out there are still doing it tough, but it concerns me just as much that we are being encouraged to promote policies which get them off the land, off the farm, rather than doing the exact opposite, which I believe would be in the long-term interest not only of the farmers but of the nation.

See this speech in context