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

It is all right to extend sympathy to our farming families, which I do tonight on behalf of the opposition, but they need much more than sympathy; they need a parliament and a government working for them, making the real and meaningful responses to drought that can take us well and truly into the future in a way that offers them confidence. Whatever those policies look like, they need to be underpinned by the basic acceptance that drought in our country should no longer be treated as abnormal event, something which will come along occasionally and which, hopefully, won't last too long, and that, rather, our climate is changing—and neither this evening nor the course of this policy debate is the time to argue about what is causing the change; that is for another day—in a way which is making it far more difficult for our farming communities. We need to recognise that is unlikely to change; it's the new normal. We need to accept that protracted drought will be with us again and again, part of our climate on a permanent basis, and approach the policy with those fundamentals in mind.

I am still not sure why the Prime Minister recently had a drought tour. I would've thought that, after five years in government and at least seven years of drought, he might've understood the drought and what we as a parliament should be doing about it. More surprisingly, he didn't come back from the drought tour with a policy announcement. I accept that prime ministers look for a photo opportunity when parts of our community are facing natural disasters, but they usually do that ahead of a policy announcement, and on the Prime Minister's return, disappointingly, he offered no such thing.

The fact that we are debating this Farm Household Support Amendment Bill 2018 this evening poses four key questions for me. First of all, what has happened in drought policy over the last 10 years? I think that's worth sharing with the House. Second, why are we debating this bill before the House now in June 2018? Third, what does the future hold for drought policy in this country? That's something I've already touched on. Fourth, what are the government's policy priorities, and how do the agriculture, forestry and fisheries sectors rate in the government's considerations?

Ten years ago now, back in 2008, Commonwealth and state governments started to reflect upon the history of drought policy in this country and its failings. In 2013 something quite historic took place: the Commonwealth and each of the states and territories agreed to a whole new approach to drought policy and entered into an intergovernmental agreement which will have lasted five years, coming to an end 1 July this year, only days away. A number of principles were embraced within that agreement. I should say that agreement had the support of key farm leadership groups like the National Farmers' Federation, and within this parliament it had bipartisan support. It was agreed, with the helping hand and guidance of a Productivity Commission report, that the way we were doing drought policy in this place was failing our farmers, our economy, our communities and indeed, of course, the budget. We were spending a billion dollars a year on a number of initiatives which usually fall under the umbrella of exceptional circumstances. They were costing us a billion dollars a year. A considerable proportion of farming families, as the Productivity Commission indicated, have been on the welfare payment for many, many years—too many years. Of course, the Productivity Commission identified the fact that many of our farm businesses hadn't made a profit for many years, and it was clear that the drought policies that were in place were not working and were failing our farmers, our communities and our economies.

So the states and the Commonwealth said, 'Let's try a new approach,' and the agreement was underpinned by a number of principles. I want to share them with the House. There are five of them. The first was to assist farm families and primary producers to adapt to and prepare for the impacts of increased climate variability. The second was to encourage farm families and primary producers to adopt self-reliant approaches to manage business risks. The third was to ensure families in hardship have access to a support payment that recognises the special circumstances of a farmer, and that's the principle which is leading us to this debate tonight. The fifth was to provide a framework for jurisdictions' responses during periods of drought. I missed the fourth; I'm sorry, Mr Deputy Speaker. It was to ensure that social support services are accessible to farm families. So they are the principles that underpin the intergovernmental agreement which comes to an end on 1 July this year.

Of course, the governments—plural, because it commenced under the former Labor government—moved pretty quickly to establish farm household allowance as one of those key principles. Farm household allowance, for those who don't know this area well, is basically an unemployment benefit for farmers. It comes with a more generous or liberal assets test, because obviously farmers can be very cash poor in times of hardship—not necessarily just drought—but still be quite asset rich and unable, of course, to readily pass off those assets. So we need a welfare payment. I think the welfare payment is an important part of the equation, and farm household allowance represents that welfare payment.

Importantly, the COAG discussion included an embrace of the idea that the welfare payment should not be ongoing ad infinitum. The concept is really that farmers should get income support for a period of time—three years was chosen—and in that time they should be expected, with some government support and guidance, to make themselves more resilient and more adaptable, to embrace new business models, maybe to get other off-farm income or maybe to leave the land, if that's absolutely necessary and they conclude that that's the only option available to them.

What brings us to the debate tonight is the fact that a couple of thousand farming families have now reached the end of their three-year entitlement to farm household allowance, and the government is now seeking to extend it by one year for those who are already on it or have just left farm household allowance because their time has expired—and, indeed, for those who are coming onto it. I need to make clear to the House that, for new entrants on the farm household allowance, the period will now be four years, not three—thus the considerable impact on the budget bottom line. It's not just existing farmers; there will be future farmers as well.

The problem with all of that is that the work simply hasn't been done along the way. We've lost five years, basically. The first act of the member for New England when he became the minister was actually to abolish the COAG process. The whole concept of the IGA relied upon the idea of greater collaboration between the Commonwealth and the states. It's true that, as the mainland managers, under our Constitution the states have to be part of the equation; they have to be part of the solution. There was an entity called the Standing Council on Primary Industries, which dealt with these matters under the umbrella of COAG. SCoPI, the Standing Council on Primary Industries, was not only the ministers meeting but also the committee on which the secretaries were represented. It was the role of that COAG committee to continue to progress the next stages of that drought reform plan.

That was then pulled away. Under pressure, it was eventually replaced with a thing called AGMIN—that is, the ag ministers group—which didn't have anything like the construction, secretarial support or resourcing that the Standing Council on Primary Industries had. I'll never understand why SCoPI was abolished, but it was a great mistake by this government. It was a decision authorised by no less than the Prime Minister of the day. It is something the current Prime Minister hasn't sought to turn around; he should turn it around. If we're going to have any hope of producing real and meaningful drought policy in this place, we need a COAG process and we need it very quickly. We've seen other areas of government policy where we've been let down by the diminution of the COAG process.

What we have had over the last five years is an increasing reliance on concessional loans. It was a former Labor government that first went down the path of concessional loans for our farmers. At that time, it was not because of drought but because of high indebtedness. That was the major issue of the day. I still believe that, in the higher interest rate environment at that time, there was a role for concessional loans, but this government has fallen into the trap of offering concessional loans for just about any hill any business ever faces: Northern Australia infrastructure loans, concessional loans to farmers—and the list goes on and on. But, as a drought response, the reality is that more debt or switching debt is simply not a solution or an option for many farmers. It entails challenging your relationship with the bank. We've learnt time and time again in this place that it means going through a terrible number of hoops in terms of paperwork during the application process. It is very, very difficult.

We've had this over-reliance on concessional loans, and of course the concessional loans have allowed the government to spruik the capital value of the land. We read in the Agricultural competitiveness white paper the government's $4 billion investment. It is a failed document; I think there's a general consensus in the sector on that now. It's $4 billion because that would be the total capital value of all the loans if they were all lent out. Of course, that's not the cost to the budget bottom line. The cost of the budget bottom line is the cost of administering the loans and any bad debts. We need to look at the difference between the government's bond-borrowing rate and the interest rate of the loans. The cost to government is not great. The government has become very fond of these loans because it doesn't cost the budget bottom line and it allows them to spruik that larger amounts of money are going to our farmers. It's a sleight of hand, it's not an approach which is conducive to bipartisanship in this place and it's certainly not a way of helping our farmers.

By way of completeness, I acknowledge that the government has improved the farm management deposit scheme in recent years. That's a good thing. It's a very wise policy to allow people to put money away in good times for use in bad times and to use the taxation system to make that attractive. We should continue to make that a key centrepiece of drought policy. The government has also done a little bit of work around capital depreciation—that is, accelerated depreciation for certain infrastructure projects on-farm, whether it be water or otherwise. The problem is that accelerated depreciation is no good to someone who's not making a profit. You have to spend the money in the first place but if you're suffering a very bad drought then you're not likely to have the money to invest.

That takes me to the Regional Investment Corporation. The government is so fond of these loans that it's now going to establish the so-called Regional Investment Corporation in Orange. Why Orange? I think you know the answer to that: because that's where the Nationals lost a state seat for the first time in 69 years, and the best way to grab it back from the Shooters, Fishers and Farmers Party might be to run a little boondoggle or pork-barrelling exercise out to Orange. The problem with the Regional Investment Corporation—

Mr Broad interjecting—

I acknowledge that the member for Mallee would have liked to have had the Regional Investment Corporation, but I will put his mind at rest by saying, 'Don't worry; I don't think the Regional Investment Corporation will ever eventuate.' I don't think we're going to have a regional investment corporation. I've already mentioned 1 July, which is supposed to be day that the Regional Investment Corporation opens its doors and starts making farmers right around the country happy and gives a huge boost to our national economy. Everywhere Mr Littleproud goes, no matter what the problem in the agricultural sector, he says, 'Don't worry; you're going to have the Regional Investment Corporation.'

Well, that isn't happening. There won't be any doors opening in Orange on 1 July—at the end of this week or whenever that is—because the Regional Investment Corporation has no real objective, no CEO and no staff. It doesn't even have a location, let alone a building. In fact, the board turned up in Orange I think for the first time last week. There is a board. The minister has appointed a board, and they met in a park. We had the APVMA team, small as it is, meeting at Macca's in Armidale, in the electorate of New England.

Mr Broad interjecting—

I'll pick up the member for Mallee's interjections—no reflection on Macca's; it's a good choice. Their coffee's not too bad. But we have the APVMA CEO holding her business in Macca's in Armidale and now we have the RIC board meeting on a park bench in Orange. This is a disgrace. It should stop and it should stop now. The new minister should walk away from the antics of the former minister and just say: 'This is enough. This is not working. This is $28 million of money which could go to drought-affected farmers tomorrow.' That would be a better use of the money.

What is the RIC going to do if ever it opens, unlikely as that is? It's going to do the same thing the states are already doing through their rural adjustment authorities: it's going to administer concessional loans to farmers, but only new loans. We'll have a situation where the states will continue to administer old loans for up to 10 years and the Regional Investment Corporation will administer new loans. This is just silly. It's a duplication and an unnecessary one. The minister will say, 'The states weren't doing a very good job of it.' Well, I challenge that, but a good minister would work with the states, bring them in and say: 'I'm not completely happy with the way these loans are being administered. Let's do it better.' That's what a minister showing leadership would do, but it's certainly not what this minister is doing. I should say that the RIC is allegedly also going to administer some water infrastructure loans. We shall see.

While I think of it, I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes the Turnbull Government's failure to provide timely and effective legislative amendments to support Australia's farmers and agricultural industries".

I'm sure the member for Griffith will be happy to second that for me.

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