Andrew Broad (Mallee, National Party) Share this | Hansard source

Some of that profitability is in wine, as I hear the member for Gippsland say. Some of it is in grain. Some of it is in sheepmeat. Some of it is in wool. Some of it is in so many different agricultural products that we are blessed with a very, very rich agricultural land.

I can talk a little bit about this because I am a farmer—I am still a farmer—and have at times applied for farmer support. I want to give a bit of an overview of the journey through that. But really what creates opportunity is doing two things—that is, increasing profit and decreasing cost. If you can address those two things, that is the first step. Farmer support is the ambulance at the bottom of the hill. What we want is the fence at the top of the hill. We want people to be able to make a profit from going about their farming activities.

When I was 16 we had some old wethers. Wethers, for those who do not know, are male sheep that have had an operation and are used for producing wool. We could not get 20c a head for those wethers. As a 16-year-old, I and my mate had to line up and shoot those sheep. We had to shoot those sheep and put them in a hole. My dad could not bring himself to do it. In those days, we were exporting sheepmeat to 12 countries around the world. Not last year but the year before, when it was a drought, and just recently, last year, on my farm, I was able to sell old sheep with no teeth—no teeth because they are old; their teeth had fallen out, but they were very old—and I got $135 a head. We now export sheepmeat to 96 countries around the world.

There are some, particularly in the Pauline Hanson's One Nation party in the Senate, who will tell us that trade does not equal wealth. Well, I want to tell you that, when it comes to agricultural products, trade equals wealth. The thing you can do to help farmers, who do not really want support, is increase their opportunity for profit and decrease their costs. Across the Wimmera and Mallee, which are the area that I represent, arguably the best part of Victoria, certainly the best part of Australia, a lot better than Gippsland—

Mr Chester interjecting—

Gippsland is too hilly, too wet and too cold, whereas the Wimmera and Mallee, of course, have the mix of the Grampians in the south and also the lovely warm weather in the north. They have been huge beneficiaries of the free trade agreements. We have seen table grapes go from 12 shipping containers to 34 shipping containers a year and now all the way up to nearly 1,000 shipping containers, with $190,000 worth of table grapes in a shipping container. We have seen citrus that is now very profitable as we are benefiting from the counterseasonal horticulture. We have seen prime lamb prices now at record levels, up to $8 a kilogram. I sold mine the other day for $6.20, and I am giving Barnaby a hard go. He is the agriculture minister; he should have got me $8! But we are seeing huge profitability.

At the same time, though, we are seeing our costs increase, and that is the challenge for us. We need to make sure that, wherever possible, we can reduce the costs of doing business. One of the things that are a cost particularly on the agricultural sector is electricity. There is a debate going on in this place about the reliability of electricity. You can only have an abattoir that can work effectively if you have a good power supply. I saw this when I was in Argentina, a competitor country for us for meatworks. As the slaughter works were going through, every now and then they would shut down. The power would shut down. Making sure that we can increase profits and decrease costs is essential.

But can I also say that there will always be farmers who exit the industry. Ever since the country was set up in soldier-settler properties, those properties have been consolidating and getting bigger. That is the challenge for us. There are some people who you will not help. But the other thing you have to remember is that the one thing that makes farmers profitable is their pride and their stubbornness. I think it is a great attribute of the Australian people but is also a challenge when we deal with issues of mental health across the farm sector. I was Vice President of the Victorian Farmers Federation through Black Saturday and then president through the floods, so I have seen what stress people can go through.

When we are working through the issue of the Farm Household Support Amendment Bill and how we actually implement this, it needs to be said that, when farmers go in to Centrelink, it is very confronting for them. They are proud people, and they feel at times somewhat of a failure for going in and applying for farm household allowance. I know this because in 2002 I was—let me think for a moment and work it out: I bought my farm in 1998, when I was 22, so that would make me 26 in 2002—in debt to my eyeballs with a working wife. The drought of 2002 was nothing like we have seen recently. I think 2002 was marginally less bad then 1982, but it was certainly a bad drought. I went into Centrelink. I felt very uncomfortable going into Centrelink. I had to come up with $90,000—I think off the top of my head—and I had no income. It was a bit of a challenge as to how I was going to keep the bank off my back. To Centrelink's credit they established that I was a farmer. They took me off to a separate area and said, 'Here's the paperwork. We can assist you going through the paperwork.' We did that, and I filled out the paperwork as well as I could. I did not get an accountant to fill out the paperwork. I did not have any money to pay an accountant. They assured me that it all looked pretty good and pretty proper. My wife was an occupational therapist. She was working, earning about $31,000 a year. I remember that because it was very pertinent, because at the time, because my wife was working, I was ineligible for anything. We were sent two letters saying we were ineligible because of that and because we were unviable. That was my interaction with the federal government. I took that letter and got a nail and an old grinder spanner, for anyone who has been to a shearing shed, and I nailed the letter to the shearing shed. I said, 'I'll prove to you who's unviable,' and went shearing, went working in a shearing shed, went rouseabouting—whatever I could. We managed to renegotiate with the bank and to find some money to scrape together for an interest-only payment and, lo and behold, I am still here and still have a profitable farm. I was viable.

Farmers do not seek out support, but there is value in having a system where we say to the farmers who are doing their best to turn water, sunshine, soil and effort into profitability that we are walking the journey with them. Of course, farm household assistance in the context of the budget that you lay out as a farmer is not a lot of money. It does not even touch the sides, but it does give some reassurance to some of those people who are hardworking Australians that we believe in what they are doing. We cannot turn our back on people. There does need to be a farm household support package.

These amendments are good. My office deals with a lot of desperate people who come in at times. We have been finding that the farm household support package has been a bit of a dogs breakfast. It has not changed that much from when I applied for it in 2002, in that people would go through all the paperwork and there was a long lag time with assessment. They would not feel that they had a government that was walking the journey with them. These amendments, frankly, should be supported by every side of the parliament. I hope that these amendments are not partisan, because they are simply about making it quicker for a person who is eligible to access assistance. When you are walking that journey you do not always think clearly, I have to say. It is confronting to have to bury your pride a little bit and go and talk to Centrelink. But if there is a lag time and it is so long and then it is just a complete balls up in trying to fill it in, that does not send a very good message. These amendments will make it a lot quicker.

Australia has never been very good at developing a proper drought policy. If you look at the history of the Commonwealth, you will see that for 117 droughts have come and droughts have gone, but we have not developed a very good drought policy. I think we still do not have one, but I believe there are a few things we should look at very seriously. I believe the purpose of seasonal insurance is something that has not been given enough emphasis, but there are packages that are starting to be developed. For example, on your farm business you might write out cheques for $250,000 to $300,000 to put a crop in. There you go, you have just laid $300,000 on the gambling table. The packages that are being developed are along the lines of your having to pay for an outlay like that about $10,000 in additional insurance premiums. If the season was a decile 1 year—a year when you do not get even your input cost back—you would get that $300,000 back. You are not hedging your profit; you are simply hedging your input cost. That is something that we need to provide some more support towards as we think through what is a good drought assistance package for Australia.

Our government has increased farm management deposits from $400,000 to $800,000. That has been a welcome increase because for some farmers that is not even the trading outlay for a 12-month period. I guess where we want to land ultimately is that if a farmer is thinking through their business schedule they should put some money aside as an insurance package so that they can get their input cost in a bad season and they should have some farm management deposits, which would allow that farmer to cover the interest component for 12 months in a drought year. Then, what I think would be a very worthwhile response, we could look at paying half the shire rates of landholders who are actively farming. It is equitable, it is simple to administer and it has been done before. Ultimately, if you want to instil an example of working with the farm sector, you would just go: 'Right, your farm rates bill this year is $10,000—that is what it normally is. We recognise that you're in a roaring drought. We're going to give you a farm rates bill of $5,000.' So effectively the federal government would be subsidising the local councils. It would keep the money in the local districts. It is a very simple way of doing that. It requires fewer bureaucrats in Canberra to administer it. The only thing you would have to make sure of is that the rates burden is also being passed on to lessors of ground, so the person who is actively farming receives the benefit. But I think, ultimately, you would do something towards helping the farm sector set up for the future.

Farmers do not want support. They do not actively seek support. They actively seek the opportunity to create profit from their hard work, from the soil, from the water, from the sunshine. We are very blessed to have Australian farmers. We stand beside them when they have got difficult times. But, ultimately, the decisions we set up in here should be more about creating opportunities and reducing costs than focusing just on farm household support.

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