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

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 calls on the Turnbull Government to:

(1) allow eligible farmers the option of receiving the Farm Household Allowance supplement in a single $12,000 up-front payment; and

(2) prioritise the resurrection of the COAG process it dismantled in 2013, in order to restore progress on the development of the National Drought Policy Reform Program”.

Many are dismayed by the failure of the Australian parliament to reach a settlement on energy policy. I'm glad the member for Port Adelaide is with us to hear this contribution. Over a period stretching more than a decade, political partisanship has run interference on every attempt to put a carbon constraint in place without unnecessarily pushing power prices up or undermining electricity reliability. It's a both bewildering and sorry story.

But there's an even more bewildering story to tell. Next year marks 10 years since the completion of the Productivity Commission's inquiry into government drought support. The PC's work should be compulsory reading for anyone with an interest in farm and drought policy. Like in the energy sector, we still have no coherent and effective drought policy 10 years on. What makes this even more incredible than the energy story is that we managed to lose 10 years, despite the lack of partisanship—at least until the member for New England came along.

In 2008 Commonwealth and state primary industry ministers reached an historic agreement on drought reform. They agreed that drought support based on exceptional circumstances was 'no longer appropriate in the face of a variable climate'. Sitting at the COAG committee known as the Standing Council on Primary Industries, which the now government abolished in 2013, ministers further agreed to commission the PC inquiry and report. Another historic agreement followed. On 3 May 2013, SCoPI ministers, including the former Queensland agriculture minister and now federal Minister for Regional Development, Territories and Local Government, signed the Intergovernmental Agreement on National Drought Program Reform. It is worth noting that five of the nine ministers who signed that agreement represented conservative governments. It is important to note that both the 2008 and 2013 agreements enjoyed not only bipartisan support across the political parties; they also were backed by the key farm leadership groups. So why is it, 10 years on, we are now dealing with the third government drought announcement in two months? Why is it that the last two announcements came only a fortnight apart? Why is it we still have no coherent drought policy based on the 2008 and 2013 agreements?

The answer can be found in the September 2013 election result. Two things followed. First, the member for New England became the Minister for Agriculture. Second, the now Turnbull government abolished the SCoPI, the key COAG committee. Remember, underpinning the Commonwealth-state agreements was the recognition that the changing and more challenging climatic conditions demanded a new and different approach to drought. As the new minister then, the member for New England had a different view. He doesn't believe our climate is changing and nor does he think we should be taking any responsibility for or action on it. His 2015 failed agriculture white paper made only a passing reference to it. So I suppose we should not have expected him to embrace a policy approach based on that proposition. Minister Joyce made his view well known—'Climate change is a conspiracy, but the best way to deal with it is to build dams.' I always said he'd never build a dam and he never did. His response, no doubt, will be to say he ran out of time. Well, he had five years. How many years did he need? Was it 10, 20 or maybe 25 years? I don't know.

SCoPI was the key driver of that drought policy reform. As a COAG committee, it was properly resourced and structured. It held regular meetings, was supported by key public servants and had a diverse agenda, including drought, biosecurity and productivity. Members of the government will argue it was replaced by a thing called AGMIN. This is a fiction. AGMIN is no SCoPI. Indeed, the department of agriculture website says:

The Agriculture Ministers' Forum (AGMIN), which is chaired by the Australian Government Minister for Agriculture, agreed to meet face-to-face once a year and for ad hoc meetings as required.

And that is what AGMIN has done—met once a year. The member for New England, when he was minister, often didn't even turn up. I suspect he viewed it as a bit of a waste of time. SCoPI was the vehicle for drought reform, and its abolition cost the nation five years of drought reform progress.

Following the 2009 PC report, and prior to the signing of the 2013 intergovernmental agreement, SCoPI agreed to trial new drought measures. The exercise was held in the agriculture region of Western Australia. The measures aimed to achieve the following outcomes: to ensure farmers and their families were better equipped to adjust to the impacts of drought, increased climate variability and reduced water availability; to develop a more effective social support system for farming families and communities; to encourage farmers to adopt a self-reliant approach to managing farm risks; and to encourage farmers to use Australia's natural resource base and water resources more sustainably and efficiently. The pilot consisted of seven programs: Farm Planning; Building Farm Businesses; Farm Family Support; Farm Social Support: Rural Support Initiative, Online Counselling for Rural Young Australians Initiative and Rural and Regional Family Support Service; Stronger Rural Communities; Farm Exit Support; and Beyond Farming. This was an extensive agenda.

While the results of the trials were mixed, ministers agreed to soldier on with the reforms. The 2013 IGA set similar objectives:

a. assist farm families and primary producers adapt to and prepare for the impacts of increased climate variability

b. encourage farm families and primary producers to adopt self-reliant approaches to manage their business risks

c. ensure that farm families in hardship have access to a household support payment that recognises the special circumstances of farmers

d. ensure that appropriate social support services are accessible to farm families

e. provide a framework for jurisdictions' responses to needs during periods of drought.

That last, of course, was a reference to the roles of the states, as opposed to the Commonwealth—something still not well delineated. Ministers further declared that the agreement should facilitate the achievement of two key outcomes:

a. primary producers have an improved capacity to manage business risks—

and business risks, of course, include drought; and:

b. farm families are supported in times of hardship.

In the past five years, little progress on these objectives and outcomes has been achieved.

Commonwealth and state ministers also agreed that the 2013 farm household allowance should be a temporary payment only. This decision was consistent with the view that drought cannot be treated any longer as an abnormal event; rather, protracted dry events and higher temperatures can be expected to be regular events. There is no justification for providing ongoing income support to farmers who are not viable during protracted dry spells. I've heard no-one challenge that proposition. Farm household allowance was designed to provide farmers with the support and the time they needed to adjust or to adapt, or, indeed, to leave their business.

The latest iteration of farm income support—that is, the farm household allowance—is time-limited and comes with mutual obligations. Farmers can opt in and opt out of the farm household allowance. And they could receive the payment for no longer than three years in total—until, of course, the Turnbull government increased it from three to four years, from June this year, just prior to the winter break. Labor supported that because there was a complete and utter absence of any longer drought reform policy. So the government left us with no choice.

The mutual obligation requires recipients of farm household allowance to enter into a financial improvement agreement. An FIA requires recipients to accept case management and to enter into activities like further study or training, or even paid work elsewhere, to contribute to self-sufficiency. As stated already, the Turnbull government has extended farm household allowance for an additional year but there's little evidence the mutual obligation side of the government's FHA design has been a success. Both outcomes reflect poorly on the government's performance on drought and drought reform policy. Every time the government concedes the need to extend income support or spend more money on farm welfare, it is also conceding failure, including a failure to meet the agreed objectives of the 2013 intergovernmental agreement.

There were aspects of the PC's report that surprised many of the policymakers. For example, it alerted us all to the fact that in 2005-06 the largest 30 per cent of farms generated 82 per cent of the total value of agriculture operations, while the smallest 50 per cent of farms generated just seven per cent. As a group, the bottom 25 per cent of broadacre farms have not made a profit in any year from 1988-89 to 2007-08. In 2007-08, 23 per cent of Australia's farms received drought assistance, totalling over $1 billion, with some on income support continuously from 2002. Obviously, these figures are dated, but I've seen nothing to suggest that any of those trends have changed much. These revelations were, or should have been, a wake-up call to all policymakers.

The PC also pointed out that the most vulnerable farmers are not necessarily those facing the toughest drought conditions; rather, the most vulnerable to drought are those which are already marginal—my words, not the PC's. The most vulnerable farms are those which lack scale, suffer the effects of land degradation and have not embraced regenerative practices, have low liquidity and capital, lack diversity in their income sources, have a broken business model or have a poor take-up on the innovation front.

Now, that brings me to the counterproductive nature of past approaches to drought policy. The drought policies of the past created a moral hazard, sending a signal to those who don't adapt and prepare that the taxpayer will always be there in their time of need. This, of course, undermines the incentive for others to build resilience. In building resilience and self-reliance a farm business relies on five levels of capital: natural capital—the soil and water resources on which it relies; physical capital—the infrastructure and technology that farm businesses use in production; financial—the income both on farm and off farm; the capital—both debt and equity; human—the labour, skills, education and experience of those who work within the farm business; and social—the ties between people, both on the farm and with the local community. These are the areas which should have been our policy focus over the course of the last five years. Sadly, that hasn't been the case.

Despite the length and severity of the current drought, the Turnbull government has been asleep at the wheel. It only started to focus when the media started to bring drought to the top of the public discussion. Four years ago, the opposition was telling the then minister and indeed the government that farmers were finding it all too difficult to access farm household allowance. Minister Joyce's flippant dismissal of our concern led to an unfortunate answer to a question from me in this place and subsequently the doctoring of his Hansard and, sadly, the dismissal of the secretary of his department by the Prime Minister.

As I noted, after five years of policy inaction the Turnbull government has now made three drought announcements within two months. This bill seeks to give effect to one of them. Firstly, it gives effect to an increase in the assets test for farm household allowance from $2.6 million to $5 million. They are, of course, on-farm assets. Secondly, it gives effect to the introduction of the supplementary payment of up to $12,000. These changes are being made despite consistent claims by government ministers that the farm household allowance required no adjustment. They were still saying that up to a month ago—even more recently, I think. Now its changes are almost daily. Only last night I was informed by the government that it'd be amending this very bill we're debating tonight. The ink is hardly dry on the bill, and already the government is amending it. All of this is happening as the government continues to progress a review of the farm household allowance—a review, we are told, that will not be complete until next year. I ask members to think about this: we need a year to work out what is needed to change a system that didn't need changing but is now being changed on a daily basis. It's chaos. There's no logic or rationale.

The opposition will support the changes contained within the bill but we are obligated, I think, to point out that there are many part-pensioners in this country doing it pretty tough, because their pension begins to taper off when their assets go through about $375,000—it's $5 million for farmers and $375,000 for pensioners. There are many unemployed people struggling on a Newstart payment which is frozen and not keeping pace with the cost of living who face about the same assets test as pensioners: around $375,000. That's a big difference.

Labor has always supported a more generous asset and income test for our farmers. We recognise that, when things are difficult, they can be asset-rich with all those farm assets and very income-poor. We acknowledge that and have always supported it. But $5 million seems extraordinarily arbitrary. If we are not careful, we will lose community support for these income support measures. I heard one farmer complain that his assets are $8 million, so he'd still miss out on farm household support. There is something dramatically wrong with that narrative. It can't go on ad infinitum. Income support must be the bridge to something better, not just a bridge to nowhere and more of the same for those who are doing it toughest.

The mistake we too often make is to treat farmers as homogenous. Every farmer is different and every farm business is different. I can introduce members to farmers in the most drought-affected parts of Queensland and New South Wales who are doing quite well in the face of drought, because they've built the necessary resilience. We have old farmers, young farmers and people for whom the farm is a secondary income or the dominant of two incomes. We have growers, croppers, producers, graziers, pastoralists and apiarists. There are those who grow fish and grow trees. It's a very diverse portfolio or sector.

There are publicly listed companies, privately owned corporates, cooperatives and, of course, family farms. Some have scale, some don't. Some have embraced technology, some haven't. Some take a science based approach, some not so much. Some are on good land and others are on marginal land. Because of our history with soldier settlements, there are many on marginal land—governments didn't give away really good land. Some rely heavily on chemicals, some do not. Some are organic, others are not. Some export, some don't. Some want to grow in size and, believe it or not, some don't. It's true of all small businesses—some are keen to grow, some don't necessarily want to grow. But they all have one thing in common. They need their government to do at least 10 things: keep the economy strong; keep interest rates low; keep costs and red tape compliance down; make sure there is a workforce with the necessary skills; maintain a strong biosecurity system; grow and maintain markets; provide the supply chain with infrastructure and connectivity; provide data and climate information; ensure we have strong research, innovation and extension systems; and address market power inequality.

Many farmers need help to adapt to a harsher climate. Adaptation and resilience-building must be our key response to a hotter and drier environment. We must help farmers regenerate their landscapes to improve the quality and biodiversity of their soils and to retain more water. Raising soil carbon levels by one per cent on an acre of land will hold around 140,000 additional litres of water. I've said it before: we can improve our soils quickly and less expensively than we can build dams.

Scientist and author Charles Massy says we have to work with—not against—our ecological systems and empower them.

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