Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Hansard source

The Farm Household Support Bill 2014 introduces a new safety payment for struggling farmers in this country. It comes from the intergovernmental agreement secured by the former Labor government, and on that basis I can report that the opposition will be supporting this bill. I note that the bill has a cost to the budget of $99.4 million over four years and further note that something like $37.6 million of that is allocated as administrative costs to the budget. I invite the minister, when he closes this debate, to provide further detail if he can on that administrative charge. I know some of it relates to ICT resourcing and new systems being put in place to administer this particular program, but it is an extraordinary amount of money as a percentage of the total allocation. I invite him to share the reasons for that with the House.

This is definitely a supportable initiative flowing from the intergovernmental agreement. It is the latest iteration of the safety net we have in place for farming businesses and farming families when they run into financial difficulty, whether it be because of drought or for other reasons. I note that this is not just a drought initiative; it is an initiative that will be available to all farming families, regardless of the cause of the circumstances in which they find themselves. The key to this particular initiative is the means testing of that payment, which would of course be far more generous than the means testing for Newstart allowance, or as some would call it the dole, for other potential recipients. That is of course due to the fact that farmers typically have substantial capital assets on their properties which in most cases would deny them the capacity to be eligible for Newstart allowance-- and similarly with income testing. The situation for farmers can be quite different.

Last night, I participated in a discussion at the National Farmers Federation—the topic was drought and the challenges ahead. Senator Richard Colbeck, the Parliamentary Secretary to the Minister for Agriculture, also participated in the debate. Professor Linda Botterill, from the ANU, made the point, as I often have, that farmers in Australia are held in very high regard by the broader community. I see you, Madam Speaker, nodding your head in agreement. As I said to her last night: as I usually put it, farmers are up there with ambos, firemen, policemen and members of the military—unlike politicians, who typically are down there with used car salesmen. And you do not need to do any empirical research to know that, although Professor Botterill was able to back it with some research on this subject last night. So I have no doubt that all Australians will be pleased to hear us debating this particular bill, and to see we are reaching out in acknowledgement of the severity of the current drought and the assistance farming families find themselves in need of. Again, this is not a drought initiative per se, although certainly it has its genesis in the discussion with the states on future drought policy.

As many members of this place would know, we have been struggling with drought policy in this country since Federation, really. Certainly since 1990 there has been a raft of reports on drought policy, each of them voluminous. If you read the latest Productivity Commission report—I think it was from 2008—half of the report reflects on earlier reports on drought. It is a complex and difficult area. I think there is a settled consensus in this country that some sort of safety net is appropriate; I have never seen the matter that is before the House today contested. But there have been many challenges to the various forms of drought policy we have had in the past—whether they are efficient and whether the objectives of drought policy or the programs under that drought policy are consistent with the objectives of the particular drought policy of the day.

Again, this was a matter for debate last night, and I made the point then—and this is always the big challenge with drought policy—that in 2007-08, for example, only 27 per cent of our farmers accessed the old 'exceptional circumstances' regime. That is still a large number, 27 per cent, but it indicates that 'farms ain't farms'. Some farms are more sophisticated than others and bigger than others, and some have made a much greater effort to ready themselves for drought—to drought-proof themselves, if that term is appropriate—and to be well prepared for drought. Others possibly—and often through no fault of their own—have not had the resources to do that and find themselves on marginal land and therefore subject to the vagaries of the weather and certainly more vulnerable to drought than others.

Last night I also made the point that it is quite possibly true that drought policy beyond the safety net will always face that dilemma—that if you assist those who are continually vulnerable to drought you are somehow disadvantaging those who have invested heavily and have innovated and better protected themselves against drought in the future. Those are not my thoughts; they are the thoughts of many who have made submissions to drought policy consideration over many decades. They asked the question, 'Why is it that Joe next door is getting a taxpayer subsidy when I am not getting the subsidy because I have made the effort to drought-proof my farm business?' And it is hard to see any time in the near future when that dilemma will not still be with us. It is a dilemma we should be grappling with in this place on a bipartisan basis, because we cannot be in any way playing politics with this issue, and we need to find innovative ways to help farmers in times of drought. Of course, we cannot necessarily prepare ourselves adequately for some droughts—like one-in-50-year events. In the past we have placed a greater and growing emphasis on drought-proofing rather than on in-drought events, and that is what initiatives like the farm management deposits scheme are all about—providing tax incentives for farmers to put money away in the good times to be used in the bad times, and I suspect that is where much of the focus will be in the future.

There are some academics and others out there who will say that we should not go beyond the farm household support package—that the welfare payment, if I can call it that, is sufficient. I reject that at the same time as I reject some of the old schemes like interest rate subsidies, which I think more often than not encouraged poor behaviour and did nothing to encourage further drought-proofing within farm enterprises. There will be more to be done, and we must do more. But in this place and in the place over the other side we should be working on a bipartisan basis to make sure that we get the right policy—and good policy, not policy that is a compromise between competing political parties seeking to win the hearts and minds of the farming communities, and of course those people in the broader community who are so supportive of farming families.

I hope she will not mind me saying so, but last night Professor Botterill said that politics does play a role here, and sometimes you just cannot secure the best policy—you have to accept the second-best policy because of the nature in which politics does creep into these public policy issues. I rejected that, because she had also mentioned the need to have evidence based policy, and I said, 'I am far more attracted to evidence based policy than I am to second-best policy'. We should never accept second-best policy, and together in this place we should strive to ensure that we have the very best policy, and one that is fiscally responsible but takes into account the special place farmers have in our economy. They are the people who provide our food security; they are the people who put food on our table. They are the people who export two-thirds of everything they grow and therefore make an enormous contribution to our export earning. But, more particularly than all of that, they are people who are exposed to the vagaries of the weather like no other industry in our broad and very diverse economy.

But it is not just about that. It is about how we have a sustainable farming future, and how this country makes the most of the opportunities presented by the growing demand for food in Asia. We often talk about the Asian food bowl, but it is not a phrase I use. I think it is a misnomer. It implies that somehow Australia will play a substantial role in feeding the growing middle classes of Asia. Of course, that can never be the case. We can never produce the volumes necessary to feed a substantial part of that growing Asian middle class. To provide a mere five per cent of the additional food demand predicted by 2050, Australia would have to double its agricultural output by value.

That is still a lot of food though, which is why I prefer to refer to it as the dining boom. As we move on from the mining boom, we enter the dining boom, because a doubling in our output would still be a boom. A doubling of output would be a welcome achievement in this country, but a tripling of output would be even better, and it is not beyond our capability if we are smart about it. However, a tripling of the output will still not equate to a substantial share of the food demand in Asia. We will still be a small player there, but we would experience a boom here. A tripling in our output would be very nice.

The question then becomes: how do we get there? It is going to be hard. I have acknowledged in here before that I think the member for Hume, in an earlier life, was the key author of a report by ANZ bank and Port Jackson Partners, in which they suggested that to achieve our ambitions out to 2050 we will need something like $500 billion of infrastructure investment in this country. It is axiomatic, and clear to all of us here, that if we are going to get anywhere near that level of investment in this country we will need a great deal of foreign investment. That is why I am so disappointed that the government, so early in its life, has sent all the wrong signals to potential foreign investors by rejecting the ADM takeover of GrainCorp.

The former Labor government was investing heavily in one of the key infrastructure issues in this country, and that is the challenge we face getting our grains to export markets—through our rail lines in particular, and then through our ports. We were investing heavily in some of that rail infrastructure back in New South Wales and Western Australia—the key export state, because Western Australia exports about 90 per cent or more of the grains it grows—and that is something we are not seeing any more under this government.

It is true that fiscal rectitude in government is important. Keeping the budget in balance over the cycle is important. But those opposite, as they sneer, seem to constantly forget that only a few years ago we had the biggest global economic downturn since the great depression. We used that cycle responsibly and appropriately. It is all right putting money away in the cookie jar, but if you are under-investing in your critical infrastructure there is no net gain—there is a balance, and I fear this government does not propose to get that balance right. But, we shall see. I may be proven wrong.

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