Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

I rise essentially to indicate on behalf of the opposition that we support the Farm Household Support Amendment Bill 2007 because we take the view that anything to address the plight of drought affected farmers and the communities they serve, in this the period of the worst drought in a thousand years, is worth while. Our concern is whether the initiatives that are proposed in this bill will work given that they seek to replace an earlier government initiative that has been a dismal failure. Secondly, I wish to take the opportunity in this debate to point out that the government really has done very little to address the causes of this severe drought in this country.

If one goes back over the period of time since the first drought bill was brought in back in 1992, this government has done very little to advance drought policy or initiatives to obviate drought in this country or to lessen those things that have an impact on it. The truth is this is the worst drought in a thousand years and it is continuing. Forty-four per cent of the nation is declared to be in exceptional circumstances. That is a desperate situation for all affected communities. We know because on this side of the House we visit them and in many cases we represent them given that the coverage of this drought affected area now is so huge. We have had to put forward our own policy initiatives in the past—and I will come to those in a minute.

What we are really critical of this government for is its failure to take any leadership to address the real causes of the problem. This government inherited the national drought policy that it operates under. It was a policy that I introduced as minister for primary industries in 1992. It is a drought policy that has stood the test of time when drought occurs. Up until this, the worst drought in a thousand years, the drought in 1992 was the worst on record. We have always recognised that much more has to be done to address the causes of drought, not just the consequences of it and the impact it has on families and their communities. The policy that we introduced back then recognised fundamentally the need, once drought had happened, to put food on the table, to ensure that people can survive and to try and restore some of the dignity, much of which is lost, of many farming families during these debilitating circumstances.

But we also recognised the need to ensure that farmers were not just provided with income support. We put in place policies to better equip them to prepare for drought in the future and adopt appropriate drought management solutions. The approach that we put forward, which was adopted, included structural adjustment, interest subsidies and the introduction of the farm deposit scheme, as it is now known, so that people could put aside money in the good times without it being taxed and draw down in the bad times. We also proposed many initiatives to better train our farm community for better drought management techniques—better farming techniques generally but in particular better land usage and better preparation for drought into the future.

That was a comprehensive policy put in place back in 1992, and this government has really failed to build on any of those initiatives in the time that it has been in office. Even worse, this government has failed to address the climate change issues identified as the key cause of the drought. I do not know how many times I have had to come into this chamber when this government has been in charge through this drought and listen to them constantly blaming the states. We know that their constant refrain is to never accept any responsibility for anything that goes wrong and to simply shift the blame. They claim credit for everything that goes right but they shift the blame for anything that goes wrong, and the constant refrain when it came to drought policy was to always criticise the states either for failure to move quickly on the exceptional circumstances considerations or failure to declare certain areas et cetera. People are sick to death of the blame game being used as an excuse for failure on policy grounds.

The drought continues and is having a devastating effect on rural communities. It is a devastation that we try to empathise with, but unless you are in the middle of it you do not really fully understand it. You do understand when you visit people. You see the hardships and the hurt. It is not just loss of incomes to families. In many cases it is loss of the family history, the loss of the family farm. It is the isolation that comes from it, the sense of failure and despair and the inability to feed the family and find income that enables the basics in life to be met. It tears not only at the individuals but also at the social fabric of the communities and the rich cultural history that the farming community has given to this country.

I said before that, during the last worst drought on record, I did see the need to respond to these circumstances—to address the pain and suffering as best we could and prepare for the future. The drought policy of 1992 was not an easy exercise because it did require the cooperation of all state governments. In those days, unlike today, all but one of those state governments was a coalition government. As a Labor primary industries minister I had to negotiate with coalition ministers to develop the national drought policy. There was only one Labor primary industries minister, the late Ed Casey from Queensland.

It took a lot of time because there was this argument as to who was responsible and the proportions and shares that should be paid up in the case of exceptional circumstances. I was prepared to go the extra steps and commit the additional resources to secure an outcome because I believed that it was in the interests of the country and our farming community. We did reach agreement between the state and federal governments. We did, in those years, end the blame game. That is why nothing annoys me more than to hear this government revert to it when all it had to do was effectively implement that which it inherited. I hear the Treasurer in this parliament talk about the people who were the authors of the policy and why not let them have the opportunity to implement it. I turn those words back on him. I do not understand why in this coalition government the National Party predominantly always gets the agricultural portfolio. It does not have the wit or the wisdom to develop a sensible drought policy for this country or to build on that which we put in place. If the National Party in this country does not stand for effective drought policy and looking after farmers, what the hell does it stand for? Yet I look in frustration at the wasted opportunities, especially in these very hard circumstances, where we could have built on the initiatives and done much more to help struggling farmers in the circumstances.

The Rural Adjustment Scheme, which is a scheme that I implemented, was the vehicle for providing assistance to farmers in times of exceptional circumstances, including, but not limited to, drought. That was an important part of the broader drought policy. The objectives of the policy were to encourage the agricultural sector to adopt a self-reliant approach to management for drought. They were also to maintain and protect Australia’s agricultural and environmental resource base during the severe drought, to preserve as best we could the land—the productive capacity of our great farming community. It was also a policy that, in having preserved and retained that productive capacity, enabled us to adopt long-term sustainability practices and put in place the mechanisms by which long-term sustainability became the way forward.

One of the key features of major changes to the Rural Adjustment Scheme announced in September 1992 was to introduce the exceptional circumstances provisions, which included the differentiation between financial assistance to farm business and to the farm household, keeping the business, the viable farmers, on the land, but providing the much-needed household support for those who had no income whatsoever. It was a drought policy that demonstrated that Labor can work in cooperation with the states to deliver a cooperative approach. More importantly, it was the Labor government that gave the lead on this. We do not see that leadership from the self-styled supporters of the rural community over there. I hope the farming community, as much as they might have history, prejudices or whatever you want to call it against the Labor Party, do understand which party in office not only has stood behind them but has been prepared to develop the innovative, creative solutions to deal with their problems.

The bill being debated today extends the exceptional circumstance relief payments and ancillary benefits to agriculturally dependent businesses that have endured a sustained negative impact on their businesses and incomes due to the drought. But again we see in this legislation a government acting only when it becomes a crisis situation. It is also worth while noting that this is legislation to fix an initiative announced, I think, in 2005 which has been a failure in its implementation. The government got it wrong last time when it tried to extend payments to agriculturally dependent businesses in rural communities. We support the notion that communities, not just the farms themselves, may need support. We do not argue against the principle inherent in that. The government made an earlier attempt to assist small businesses affected by the drought, and I go to the explanatory memorandum to remind the House as to what we are dealing with here. It says:

Agriculturally dependent small business operators are currently able to access EC Relief Payments through ex-gratia arrangements. The amendments to the FHS Act—

that we are dealing with—

will formalise these arrangements as well as provide agriculturally dependent small business operators with access to a Health Care Card.

The extension of entitlement is worthy, but I am still looking for a demonstration that this legislation fixes the problem that the earlier announcement was supposed to address. Let me remind the House of what we were told. The government did make an earlier attempt to assist small businesses and to extend to them a similar definition where, I think, 70 per cent of the income of the business is derived from agricultural activity—that is the test. But when the National Audit Office did a performance audit into drought assistance in 2004-05, it noted that when the government introduced the initiative that was supposed to cover agriculturally dependent businesses in rural communities, the government claimed that they expected to get up to 17½ thousand applications, 14,000 of which, they assessed, would be successful.

I ask the question: does the parliamentary secretary at the table know what the actual result was? There were 17½ thousand applications expected. Do you know how many were actually received? It was 452. If you were that far off the mark, you would be drummed out of a business for incompetence. The shareholders would be demanding that the board be sacked. There was all the hoo-ha about looking after businesses in rural communities affected by the drought, not just the farmers. The government said that this was going to impact on 17½ thousand people and there were only 452 applications. How many do you think were successful? It was only 182—a third. So not only were they way off the mark in terms of the reach of this policy; the application process was so hard to get through, presumably, that people either gave up or did not know that the scheme was there. I do not know. I would be interested when the minister comes to explain this in response.

How is it that of so few applications even fewer get up? How could the government get it so wrong? How could the National Party in particular stand by and let this happen to its constituents? It is all very well to argue that this bill extends the notion of the health card, but the question I ask is: where is the evidence that they have fixed the problem in applications? Where is the evidence that this legislation is actually going to hit the mark? It is little wonder that businesses did not access the government’s initial provisions, because the government made it too hard. Criticisms that were made of the previous program included that small business operators were too busy to complete the forms, the forms were too complex and the effort to complete the forms was greater than the benefits. Previously, businesses have found it difficult to prove that 70 per cent of income derives from ‘farm business’. What is farm business? These are all the definitional issues that this bill does not address.

I suspect that here we have another piece of legislation where the government are trying to give the impression they are doing something when in fact the policy will fail again. I want the minister, when he responds, to tell us how they have fixed the failure that was endemic in the scheme previously. I would also like to understand why, in this exercise, the definition of small business in a rural community is the one that they use for the workplace relations test—100 employees or less. I ask the House to reflect on this: what we are being asked to do here is to extend farm household support to a business which is 70 per cent reliant on agricultural income. If you have to give farm household support to the business owner, does anyone seriously suggest that they would still be employing 100, 90, 80, 76, 60 or five people? If you need farm household support, how the hell can you employ anyone? This is the point I am making. This bill does not seem to have been thought through.

I wonder what we are debating here. No-one argues against the need for this sort of extension, but are we really addressing the problem? Are we hitting the mark? The government did not hit the mark on the earlier occasion and I suspect they will not hit the mark on the next occasion. Labor have an amendment. The amendment will not fix the problem—it is simply to try to draw attention to the problem—but I think it is incumbent on the minister to explain how this problem is going to be fixed into the future. Unless they do it, I think farmers are entitled to think that they are being let down seriously yet again.

I make the point: no-one can question Labor’s bona fides or our commitment to both providing farm household support and trying to address and alleviate the pressures consequent upon drought. Our record stands. The policy that we put in place still stands. The policy that we put in place has not been built upon despite the fact that we are experiencing a worse drought than when I introduced the policy some 15 years ago.

That brings me to another point that I want to make in this debate. While it is one thing to provide drought assistance, it is just as important, in terms of a balanced approach to policy, to ensure that we deal with the cause of the drought and implement policies that address the cause. Back then I argued that we had to recognise that water management issues could not be looked at separately, that they must be considered in terms of industry development and environmental protection and that all of these were linked. I have also said on previous occasions that water is not just an environmental issue, an economic issue or a social issue; it is all three of them. That is why this issue of addressing both climate change and water policy is so vital. This is where the Commonwealth does have to play a leadership role. Back then we did not develop just the drought policy; we also developed a national water quality strategy. We amalgamated the agriculture, soil conservation and water resource councils to deal with natural resource management in an integrated way. I used the funding in those programs to leverage a commitment from the states, local government and individual stakeholders to invest in the infrastructure that was going to help retain water through technological solutions as well as channel covering and lining for the prevention of evaporation and seepage, through which so much of our great natural resource of water goes. We were arguing that 15 years ago; again, the basis for that was laid by us.

What did we see from this government until this year? Nothing. We saw the hastily cobbled together $10 billion Water Initiative of the Prime Minister that did not even go to cabinet. We had the Minister for Finance and Administration, who is in another chamber, say, when asked about this in Senate estimates, ‘What’s a billion dollars a year?’ And they have the gall to lecture the Labor Party about fiscal responsibility! So you don’t have to take to cabinet initiatives for $10 billion expenditure into the never-never! So you don’t have to consider the consequences; you just dump this out because you know you’re in strife and you’ve got to be seen to be doing something!

I lament this country’s wasted opportunities because this government failed. It was derelict in its duty because it did not build on the initiatives that Labor put in place in terms of drought, water policy and natural resource management. The base was laid, but this government, as with so many other things, went to sleep at the wheel. It wants to talk about the good things that happened, but they happened not by any policy direction of its own. Imagine what could have been done had the initiatives been carried on.

True, they have continued the national Landcare program—again an initiative that Labor introduced. They have scrapped the Murray-Darling Basin Commission and want to set up a Commonwealth takeover. I think it is a moot point as to whether it is better guided by a national body or an independent body. I happen to believe an independent body is the right way to go. Some three years ago in this place, as the Leader of the Australian Labor Party, I proposed, in a budget speech in reply, an initiative to save the Murray River and to put in place a scheme to put river flows back into the Murray-Darling Basin system. I proposed an initiative called Riverbank, whereby a Commonwealth investment would put into this fund money that would enable the necessary infrastructure to be undertaken to preserve our precious water. The water that we saved would be banked; it would be deposited. Once you had deposited it, you had to have a strategy by which you allowed the deposits to be taken out and go back into water flows. I proposed the establishment of an environmental flows trust, a body independent of government that, based on the science and the priorities, would make the decision as to where the savings from the initiatives went. That is smart policy. It was proposed and offered in a bipartisan way over three years ago, yet this government wants to make out it is doing something on water by appointing a minister. And what is the minister’s solution? Reversion to the blame game, to go around bagging the states for not doing certain sorts of things.

I am the first to accept that the states are not always the easiest to deal with and that just because you have come up with an idea it does not necessarily automatically get adopted by them. But I do know this, because I have done it and practically implemented it: if what you have got are the resources of the Commonwealth and effective leverage over initiatives that drive partnerships with the states, with local government and with the stakeholders, therein lies the solution. But you have got to have the preparedness to put the hard work in, to look at the initiatives, to get the right people around you, to commit the resources of the Commonwealth and to forge a partnership with the rest of the proponents.

As I will have opportunities on other occasions to talk more about water initiatives, I will go to the question of climate change in the brief time that I have left. This government argues that we should not sign the Kyoto protocol. I will tell you why we should sign up to Kyoto: it gives us a seat at the international negotiating table. If we are to address emissions in this country, an emissions-trading regime has to be developed. It has to be international. I would have thought that it would be in the interests of a country like ours, one of the most efficient producers of energy in the world, to be participating in a framework that gave us recognition for that efficiency. It would give us credits, bankable commodities or bankable instruments, that we could present as part of the equation when we went to negotiate in international marketplaces to try to win contracts. Think about it: it is what we did as a Labor government with the Rio summit at the last attempt at greenhouse gas reductions where we insisted that greenhouse sinks—plantations, if you like—should be included in the calculation for abatement. We won that argument. We won it because we had a strategy, we had a plan to implement it in this country and we were prepared to turn up at the international forum and argue for it.

This government’s solution is to stay away from the forum because George Bush stayed away from the forum. Everyone knows that this issue cannot be solved unless there is an international solution, and that is why we need to sign Kyoto. But it is not just about Kyoto. It is about investing in clean coal technologies and renewables. It is about embracing MRET in advance of an effective emissions trading regime. We have seen none of this policy development from this government, and that is why we have real reservations about this bill. We do not think the details will work and, unless there is an explanation, we think this will be another costly failure and another disappointment. But, most of all, it is about the failure of the government to address the causes of drought through climate change measures, better water management and building on the initiatives of the drought policy that only Labor had the wit and wisdom to introduce. Get behind the authors of what is good for this country in terms of land management. Re-elect the Labor government and you will see these issues properly addressed for the first time in 12 long years.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

It is fortuitous that we are having this debate at a time when 90 per cent of Victoria has been declared to be in exceptional circumstances. My contribution to this debate follows the contribution made by the member for Hotham, who was the Minister for Primary Industries and Energy in the Labor government from June 1991 to December 1993. While the Labor government was in power, he stood up to his thighs in green grass in the good times in Gippsland. In his time as a minister he has also seen the tears of rural communities falling in the dust on dry ground. He has lived through this and will know exactly what I am talking about. I do not for one moment come to this House to blame anybody for the difficulties we face as a community together across Australia. The member for Hotham probably has a broader knowledge of the issues than anybody in his party, particularly with regard to rural Australians and the people who have had to face up to these most difficult times. Coming from the community that I come from, where we normally have an abundance of water and green grass, he will understand what it is like to stand with farmers in the bottom of their empty dams when they are spending $250 per day just to cart water for their stock.

I hope the Howard government and this parliament will be seen as the best friends the Australian farming community has ever had. This government is determined to keep farmers farming through these difficult times of drought by holding the line in support of farming families to ensure their futures in agriculture and the futures of their collective community; by standing in support of the farming women who, in turn, support their men; by standing in support of the men of the land, who are held up by rural women; and by standing beside the children of farming families in the knowledge that, like their parents and their grandparents before them, they too will have a future in agriculture, not only in Gippsland in Victoria but throughout the nation.

I welcome this opportunity to speak on the Farm Household Support Amendment Bill 2007. Representing a rural electorate as I do, I am painfully aware of the serious impact that years of drought have had on our farming communities and rural businesses, which rely on water for their very prosperity. In my electorate of McMillan, that impact has been devastating. It goes beyond what the member for Hotham explained as exceptional circumstances. We now understand that exceptional circumstances triggered the Australian government relief for farmers that was put in place in 1992. In my area we are now enduring what I have termed extraordinary circumstances, which profoundly affects all aspects of rural life.

The Howard government has responded with compassion to the plight of our farming communities during the progress of this extended dry period. Since coming to office, it has expanded and refined the application of exceptional circumstances, which were first accepted in 1992. In 1999, agreement was reached on new criteria for exceptional circumstances, and these are the criteria we use today. This was followed in 2000 by a review of EC, which led to the recognition of buffer zones where farmers living in close proximity to a declared area could also apply for assistance. In 2002 the government agreed to provide immediate access to drought assistance as soon as an application for an exceptional circumstances declaration was received. This prima facie declaration meant that farmers immediately became eligible for income relief for six months even if the National Rural Advisory Council subsequently recommended against the declaration.

The reforms to the exceptional circumstances process continued in 2005 with a new drought package. That drought package increased the interest rate subsidy level from 50 per cent to 80 per cent for farm businesses in their second or subsequent years of EC declaration, doubled the off-farm assets threshold and introduced a $10,000 annual offset against the income support test and an automatic reassessment process for exceptional circumstances declared areas nearing the end of their second year of assistance.

More recently, the government announced two further expansions of its drought assistance program. In October 2006 there was a significant policy change to EC arrangements that extended income support payments and interest rate subsidies to all eligible producers. This removed the differentiation between producers such as irrigators, dryland farmers and dairy farmers in certain exceptional circumstances declared areas. In November 2006 exceptional circumstances drought relief was further extended to include thousands of small businesses that derive a minimum of 70 per cent of their income directly from agriculture. This meant that people like harvesting and fencing contractors; seed, feed and fertiliser merchants; livestock carriers; shearing contractors; and farm machinery businesses could access assistance.

The bill now before the House will give effect to these important changes. It will enable small business operators dependent on agriculture to gain access to relief payments and ancillary benefits such as concessions under the youth allowance and Austudy. It also gives effect to the current ex gratia arrangements for small business income support and sets out the criteria that will determine eligibility, to ensure the assistance is available to those small businesses most affected by this most difficult drought. It will clarify the position of small business operators who could also be considered farmers and might not be eligible for assistance under the current criteria. The Farm Household Support Amendment Bill 2007 will also affect the Social Security Act 1991 and the Age Discrimination Act 2004. The changes to the Social Security Act are necessary to enable small business owners to gain access to concessions under the youth allowance and Austudy means tests. These are already available to farmers.

The bill before the House also makes a number of changes to the Farm Household Support Act in order to bring it into line with the Age Discrimination Act. The Attorney-General has provided an exemption from the provisions of the Age Discrimination Act to enable EC relief payments for both small business operators and farmers to be calculated according to their age. Those sections of the Farm Household Support Act that have age qualifications that do not already have exemptions under the Age Discrimination Act will be removed when this bill is passed.

The Howard government’s response to the unfolding issue of what has become the worst drought in living memory has been both measured and timely. In consultation with farming groups, individual farmers, small business operators and community groups, it has introduced change when needed. As was pointed out in the second reading speech of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, the Australian government has provided $1.3 billion in drought assistance since 2001 and is committed to a further $900 million to the year 2008.

Some measure of the seriousness of this drought can be drawn from its impact on those parts of Victoria’s South and West Gippsland regions that make up my seat of McMillan and the seat of Gippsland, held by the Minister for Agriculture, Fisheries and Forestry, Peter McGauran. In more normal times, this area is regarded as one of the most stable and consistent rainfall areas in our state. However, the cumulative effects of the past 10 years have had a severe impact on the dairy industry in particular, one of the mainstays of our regional economy. Each year, as the drought progresses, there is mounting concern as we miss out on any meaningful autumn breaks and get well below average winter rainfall, the lifeblood of the dairy industry.

What concerns me most about the impact of the drought in my electorate is the unfolding human and animal welfare crisis. After 10 years of worsening conditions, we have now reached the point where it is likely that a significant number of the most vulnerable dairy farmers may well not survive into the future. The least resilient and therefore the most at risk of being lost to the industry are the sharefarmers and leaseholders, considered by most as the future of the dairy industry in our area. They are struggling to maintain the value of their only real asset, their herds, which have dropped to about half their value at July last year. My office has been inundated with calls from farmers and their families at the end of their tether, physically and financially, and not knowing where to turn for help. We have had stories of several hundred farmers across the electorate paying as much as $250 a day, as I mentioned before, just to cart water in order to keep their livestock alive.

In southern Victoria the countryside in normal years supports perennial pasture species. This is no longer the case. Because of the drought, our farmers are now facing the additional burden of having to resow these pastures. With no pasture, fodder stocks have also been exhausted, and the same farmers have had to borrow substantial sums to pay huge feed bills, with round bales six to eight times their normal price. Much of this debt is owed to cooperatives that have to be repaid. The result of this is that even when dairy farmers in my electorate get back to meaningful production many of them will face the prospect of receiving no milk cheques—or very little of their milk cheques—until their loans are paid back.

Apart from the farmers, who are bearing the brunt of these effects of the drought, milk factories have also been seriously affected. The Murray Goulburn Cooperative Company, the largest dairy processing company in Australia, has reported a drop of 14 per cent in the daily deliveries of milk. It has had at least 50 suppliers quit the industry across Victoria, and I suspect this number will increase. Murray Goulburn has a major plant at Leongatha, in the centre of my electorate of McMillan, in the heart of one of Australia’s most important dairying regions. The company’s chairman, Mr Ian MacAuley, said its future viability is critical to the prosperity of the region and of the state of Victoria. Murray Goulburn has invested heavily in its Leongatha plant, and Mr MacAuley said future investment plans of more than $200 million relied on the continuing strong productivity of the dairy farm sector.

For the past six months I have been visiting and talking to farming groups, individual farmers, industry and community leaders and regional water authorities. These talks resulted in a strong case being put to the Minister for Agriculture, Fisheries and Forestry and his Victorian state counterpart to have exceptional circumstances declared in the four shires that make up the majority of my electorate of McMillan.

I have also made these concerns known to the office of the Prime Minister and to the Prime Minister himself when the opportunity presented itself when he came to Garfield recently for an announcement on extending broadband opportunities. The Prime Minister then stood on ground that was bare. Whilst the individual farmer himself had water and feed for his cattle—it was not a dairy farm but a beef farm—he explained to the Prime Minister as we looked across Koo Wee Rup swamp from where we were standing on the Garfield hills that those down there were desperate for water and feed.

As I have said, the conditions being experienced by farmers in parts of my electorate—and I am sure in many electorates around the country—are beyond exceptional circumstances and are surely this time extraordinary circumstances. Farmers occupy and manage 60 per cent of Australia’s land mass and know better than anyone how harsh the Australian climate can be. In periods of exceptional circumstances the best and most experienced farmers are normally able to cope as a result of forward planning and decision making based on their experience. But, in the present circumstances, even some of the most experienced farmers are struggling, and I fear there will be many farming operations that simply will not survive this drought.

I have been standing on the parched earth of McMillan. It is not something I remember well, though we have experienced droughts before. I grew up in a dairy-farming community. I grew up with the people that lived on the land. I have milked cows for a very short time—I think a week; I found it was not for me. I hold in awe those people who milk twice a day and who are out there struggling—for some, for the first time in their lives. These are people I mentioned just before. These people are not struggling farmers; these people are very, very good farmers. These people are across our nation. I know that they are not only in my area; I know they are in Tasmania. I know I am speaking to people across the nation on dairy farms. But I am telling you now that for the second time in Gippsland—and we have had a drought going on for 10 years; since 1997 this drought has been afflicting us—this has brought us to a stage where there has been no run-off since May last year in these areas that I am talking about. Even though we would have snippets of rain and you would come down to some parts of the electorate and you would say it was green, there is no water there.

The reason I have been pleading with my own minister, Peter McGauran, and with Joe Helper in Victoria, is that we are seen in Gippsland as not needing exceptional circumstances assistance. That is why I keep calling them extraordinary circumstances, because I have been to the farms and I have stood at the bottom of the dams. I have seen the efforts that these farmers have gone to to prepare for exceptional circumstances—to prepare to have the water available to them. But now there is so little water. We now have competition between the towns and villages for the same water that used to be available to the farmers, and we cannot take the same steps to help the farmers.

It is put to me, ‘Well, hang on, Russell, there are farmers throughout Australia who run out of stock water and cart that stock water or remove the cattle.’ This does not happen in Gippsland. We have creeks drying up in Gippsland that have never dried up in 60 years of memory. They have now dried up and they are not running today. We get a little bit of rain and they can pick up.

I have gone out on a limb on this issue with my minister and with Joe Helper with the Victorian government—and, can I say, there is no blame game. Why I say there is no blame game is that I know the officers in the Victorian department and the officers in the federal department have been doing their very best to see whether these areas can fit into our current exceptional circumstances arrangements. To a degree we cannot, but we are prepared, I hope, as a government to declare interim exceptional circumstances, because I can tell you, if we do not get autumn rain and if this nation does not get autumn rain, there will be a lot more people on our plate for this nation to look after.

We do have a responsibility to our rural communities that feed us, look after us and export for us, remembering that 70 per cent of this milk is exported overseas. But when they are having a tough time, isn’t it right that the communities in the cities, through their taxes, support these people as best we are able? I repeat again: we are not supporting inefficient farmers; we are supporting efficient farmers, determined farmers, third-generation farmers, who are saying, ‘I am not going to lose this farm because my dad had it and my grandad had it.’ I know there are members in this House today that have stood with farmers exactly the same as those people. That is why I say we have got to hold the line to support farming families to ensure their futures in agriculture and the future of their collective communities. We are talking about the loss of community. We are really talking about the future generations, standing beside the children of farming families in the knowledge that, like their parents and their grandparents—the generations before them—they too will have a future in agriculture. I commend the bill to the House.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I compliment the member for McMillan on his speech. I listened intently to it and I can assure him that there are other members in this House who agree wholeheartedly with the sentiments that he has conveyed. I would also thank the member for Hotham for the contribution that he made earlier. I remember the time that he was the primary industries minister. I know that many farmers, who probably were not Labor voters at the time, remember some of the initiatives that he put in place. I certainly do. I commend him for his interest in the agricultural sector over those years and since that time.

In recognising and supporting the Farm Household Support Amendment Bill 2007 before the House, I want to go to what the member for Hotham said, because I think he made some very important points in terms of policy and what we are actually trying to address. He made a very disturbing point, in my view, that, when this policy of support to small businesses was actually put in place, the projections were that 17,000 small businesses would apply and 14,000, I think he said, would be successful—and this was all in a report. Only 450 small businesses applied and 181 were successful in gaining support. I criticised the government at the time because they used different numbers to determine what a small business was. They were using 20 when it suited and 100 when it suited in other circumstances in the industrial relations legislation. There was duplicity in the numbers in terms of what a small business was. That matter has been addressed in this legislation.

At the time, it was promoted as an initiative to help those small businesses that were reliant on agriculture for their income and were suffering from the drought but were needed for the long-term viability of the farm sector in regional communities when the drought broke. There was a legitimate reason for supporting them. That number that the member for Hotham mentioned of 181 businesses successfully gaining support I find quite astonishing. I would like the minister to address this in his response, or maybe some members of the government could. If that is in fact the number, I think we really need to revisit this legislation. I thought the member for McMillan put this very well: this is not just about farmers; it is about communities. There is no doubt that there are a lot of small businesses out there—whether they be spray contractors, harvesting contractors or fencing contractors. Because the very nature of agriculture is changing, a lot more contract work is being done. Hence those businesses are an integral part of the future of agriculture. We really do need to make sure that there is genuine support going to those people. Like the member for Hotham, I am not convinced that this legislation will actually do that. Regrettably, the only way we will ascertain whether it will provide that support will be with hindsight. Hopefully, damage will not be done to those people, but it could well happen, and damage has been done in recent years.

I would also like to talk about the general support given to agriculture and the way various people, particularly in the media and in the city, some with political objectives—and, thankfully, I have not noticed it too much in this place—portray the support given to agriculture during a drought as exorbitant support. I think the government tends to be a little cute from time to time in terms of what is actually support for the farm sector. If you look at business support to agriculture during the worst drought in history—and I do not have the absolute numbers at this particular time, but I have raised this issue before and the minister can address the numbers—from 2001 to 2005, a four-year period, you will find that $242 million was spent on business support. Some people might know what business support means. It is exceptional circumstance interest rate assistance. In that period of time, the government argued that a vast amount of money was expended on farm support. Much of that support was by way of household assistance.

Household assistance is no different to the dole: unemployment benefits given to a family not receiving an income. In this case, it is a farm family who really needs to stay on the land to maintain the farm rather than leave the farm and seek income from another job. In that sense, that is not industry support; that is personal support to those households. In that particular four-year period, we have this extraordinary number: an average of $60 million a year in business support to the farm sector. As I said, I do not know what that number is today.

In her speech, the parliamentary secretary said that total support to the farm sector from the government over six years has been $1.3 billion, and she projected some hundreds of millions of dollars more into the future. My estimate of the business support to agriculture during that period of time is no more than about $450 million. Even being polite about it, say it is over five years, that is $90 million a year during the worst drought in living memory for a very important sector of our economy.

About 18 months ago, an article in the Australian said, and others were saying the same thing, that we cannot keep propping agriculture up. There was a myth being developed, aided and abetted by some people in the government that millions of dollars were going out to the farming community. When you track the actual business support, it would be lucky to average $100 million a year—I think it would probably be closer to $90 million. That is good support, and no-one is criticising that. But the majority of support going to farm families are unemployment benefits because there is no income going to those families. It is not correct for people in the press or in the parliament to say that that is an agricultural subsidy. Anybody who is unemployed in this country and who cannot find additional work will get support from government—so they should and so the farm sector should.

Let us look at other support in this country, bearing in mind that this is the worst drought we have had in living memory. Let us look at other industries, for example the building industry. When the GST was brought out—that was not brought about by a natural disaster; it was government policy, and a policy that I agree with—the government had an enormous response from the building industry, which said that a 10 per cent increase in the price of homes would destroy the economy, that there would be mass unemployment and that people could not bear the cost. So the First Home Owners Scheme was put in place. Since then, in a period of time comparable to that of the drought, nearly $6 billion of support has gone to the building industry, which is an average of about $1 billion a year. On average we give about $2 billion a year to the car industry and about $11 billion a year to other industries. Every time the Productivity Commission is asked to comment on subsidies to agriculture it says, quite rightly, that the support is quite low.

So it is grossly unfair for members of the media and some members of the parliament to suggest that enormous gratuities have been given to the farm sector. I support the member for McMillan. In these areas that are really suffering, we have to look to a policy initiative that actually does something on the ground. If the member for Hotham is right, and 180 businesses have support—if they are the only ones out of 17,000 who have support—then it says something about the policy mix, because I am sure the other 16,800 are not doing terribly well either. Surely there is a need to revisit that particular initiative.

I am not becoming a member of the member for McMillan’s fan club but, again, he addressed the issue not of exceptional circumstances but of ‘extraordinary’ circumstances. And they are extraordinary circumstances—not in every farm in Australia but in many areas. I would suggest that, where the creeks have not dried up for 60 years and they have now, it is a natural disaster, not drought. What we should be doing in this place in policy terms—rather than have this begging bowl mentality where we issue money to the farmers, make a press announcement and make them more depressed because they feel as though they are beggars—is put in place a natural disaster policy that in a sense is an insurance policy. Whether it applies to the Newcastle earthquake, whether it applies to the hailstorm in Sydney, whether it applies to a mudslide in Wollongong or whether it applies to a massive drought such as the one we are experiencing now, those events should be treated as natural disasters. It may be a Cyclone Larry or a Cyclone Tracy—those events should be treated as natural disasters and funds should be made available from a fund that everybody contributes to.

To simplify the issue, a dollar a week from every Australian would raise $1 billion in a year. If you look at the insurance records—and I am not sure whether or not this includes Cyclone Larry—since 1974 there has been one disaster that has cost more than $1 billion in the year, and that was the Newcastle earthquake. Normally it averages out—and it is not dissimilar to what is happening with this drought at the moment—at about $200 million a year. That is 20c a week from every Australian or 40c a week from every taxpayer.

So there is an easier way to go through this than the convoluted message where you create divisions between city people and country people and paint the picture that when the farmers are experiencing a drought they are being subsidised. The city people do not particularly like that and it is unfair treatment in some people’s eyes. If we created a national natural disaster fund, triggered by certain criteria, to assist people who were facing a disaster, rather than having the politics of blame and of playing the moment in the media when a disaster strikes, it would be a much better system than the one we have in place at the moment. It could be quite easily funded and could become some sort of national insurance scheme for disasters.

We have all seen insurance companies, when a flood occurs, arguing about whether the water fell down or the water came up. That has a significant influence on whether or not you get paid for the house and buildings you have just lost. If you have just lost your house and buildings, you really do not want to get into an argument about whether it was water falling on it or water rising up that caused the problem; you want some compassionate treatment. I think that in those sorts of circumstances you need a national insurance scheme. Whether they be city people or whether they be country people, if they are unlucky enough to be struck down by a natural disaster of some magnitude then there should be assistance for them.

The other issue raised today in terms of drought relates to the profitability of agriculture. Obviously, if you can lift profitability, you can lift the capacity of people to handle drought when it does come. There are a number of policy initiatives we should be having a close look at in this place. One is the renewable fuel debate. We still have not really addressed that issue. One of the impacts it can have is to lift the profitability of grain farming. It moves the income source from a purely food based market to an energy based market.

We have seen what has happened in parts of the United States with the lift in the corn price. We have seen what has happened to the canola price in Europe, and the pressures that puts on—and the benefits that that has for—Australian prices, even though we are almost nonplayers in the renewable fuels business. We have seen those impacts. We have seen the Brazilian ethanol industry’s impact on the global price of sugar, which has probably saved sugar communities on the Queensland coast. So there is a way of lifting the profitability of agriculture by looking at the ways in which we can enhance the income status of those involved.

The other issue I wish to raise—and the member for Hotham also raised it briefly—is climate change. What can agriculture gain from climate change that is not negative? I think there are a number of potential positives, so I was extremely disappointed that the Prime Minister did not include the farm sector in his carbon task force, for instance. If the storage of carbon in our soils through the accumulation of humus and organic matter can have a positive impact on the carbon dioxide in the air and on global warming, then maybe—through carbon trading et cetera—there is a way that agriculture can, again, lift its profitability if it can in fact store that carbon in soil.

One of the offsets is that, if you improve the humus and organic matter in our soils, you not only improve the capacity in terms of yield for our farm sector but also reduce the run-off and increase the infiltration rate and the microbial activity in the soil—you actually create a better soil. We talk about stewardship payments and all the other things that are talked about in the landcare movement and others. Why don’t we get to the basis of this problem? Where the pressure is coming on our soils, it is because the farmers of those soils are not as profitable as they would like to be and so the pressure is on their properties to produce income when the income producing times are on—and drought only exacerbates that. So I would encourage the government to look closely at that.

I do not know the answer, categorically, in terms of the capacity of our soils to absorb carbon. Obviously our better soils, such as those in the Darling Downs and Liverpool Plains—and probably even some soils in South Australia—may have the capacity to improve their organic matter and soil structure et cetera. But I think it is something that we should have a very close look at. Not only may it help those farmers in terms of their profitability, but also they may be part of the solution to the broader problem that has been caused partly by industrialised society.

In conclusion: obviously, I support the legislation. But I do think that, when we are passing these sorts of amendment bills, we should have a closer look at what we are trying to do with policy into the future. And I do not believe that, in the last decade or even in the last 15 years, we have progressed terribly far in terms of addressing drought through policy. If the number of 181 out of 17,000 small businesses that the member for Hotham suggested is correct—and I would ask the minister to reply to that tonight—that says to me that this policy is not working correctly. And that adds to the argument that the totality of the policy mix that we have been operating under for drought and other disasters is not helping the people who deserve that help. (Time expired)

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

We have heard some very interesting speeches this afternoon in the chamber. I took note of what the member for McMillan was saying in what was certainly a very passionate speech from someone who really cares about his constituents. I also found the speech from the member for New England quite interesting. I am not sure that I would agree with everything he said, but many of the things he said are worth supporting.

I noted that the member for New England again brought in the idea of having a larger renewable energy industry in Australia, with the idea that it would make it more profitable for those who grow grain—and that may be the case. But I think you should always be very careful when you start putting one industry in front of another. If, for example, grain were to go up 50 per cent as a result of extra demand from the renewable energy industry, then that would also affect those other farmers who have to buy that grain to feed their stock—for example, dairy farmers, pig farmers and feedlotters. If, for example, it doubled the price of grain in Australia then, yes, the grain farmers would do very well, thank you very much, but I doubt whether you would have a dairy industry or a pig industry left in Australia—as a result of government action. And if that were the case then I think you would have a lot of explaining to do to the pig farmers or dairy farmers in your electorate. Perhaps the member for New England does not have too many dairy farmers or pig farmers in his electorate—

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Mr Windsor interjecting

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

but I certainly have quite a few in my electorate of Barker in South Australia. In fact I have about 90 per cent of South Australia’s dairy farmers in my electorate, which equates to a bit over five per cent of Australia’s dairy industry. Not only do we have a large pork industry, a large number of pig growers, in my electorate of Barker, but also we have a very large processing plant, Big River Pork. If they were to find it very hard to obtain pigs because the pork industry had collapsed as a result of high grain prices then I think you would find that would affect other jobs. So there is a domino effect from any government decision that you make.

This legislation amends three acts: the Farm Household Support Act 1992, the Social Security Act 1991 and the Age Discrimination Act 2004. It is certainly legislation that this House should support. The fact is that my electorate is in what you might call uncharted waters. For example, areas around Tintinara, Keith, Coonalpyn, Bordertown, Mundalla and Naracoorte have had the lowest winter rainfall on record, and the records date back 100 years. As the member for McMillan said, it is extraordinary. We have never had anything like this—in 2006, the lowest winter rainfall on record. That followed a pretty tough year in 2005 and, frankly, if it were not for one month, October, then 2005 could have been just as bad as, if not worse than, 2006. There was not much feed growing during the winter and it was only that rainfall in October that allowed the crops to finish growing and many of the farmers to cut a lot of hay. There are farmers in my electorate who have been feeding their stock hay for nearly 18 months nonstop as a result of the drought conditions that we are facing.

Whilst October 2005 did allow some hay to be cut, some grain to fill out and some reasonable yields, it was not helped by the fact that prices were pretty low. Many farmers barely covered their costs. They had already had a tough year and we thought we were going to have a good opening, and we did in late March and early April last year in much of my electorate, but it just forgot to rain. This is an area that is generally considered very reliable. They had never seen anything like it before. It rained and then it just forgot to rain after that. I can remember that, in about September 2006, we had half an inch of rain and people thought, ‘Hell, we haven’t had rain like this for 12 months.’ So it has been a very tough year in those reliable areas where generally the farmers would say, ‘We have dry years and we have wettish years, but we don’t have droughts.’ Well, we certainly had one in 2006.

We did have some rains in January, but they were generally pretty useless for our Mediterranean climate. That Mediterranean climate in most of South Australia basically means we have a drought every year—it is called summer—and that drought usually lasts for five or six months. Those rains in January really are not all that useful to us as a rule, unless you happen to have a bit of lucerne. The January rain certainly brings that up, but I can say from my own experience—I am on the land; my son runs the farm—that the lucerne that resulted from the rains six months ago has now all been eaten off. It was an extraordinary two years, and the year before that was also pretty tough, so we have had three pretty bad years, and not only are farmers affected but also those businesses that rely on the farmers are affected.

That is why I was very pleased in November 2006 that businesses that rely on farmers were able to become part of the exceptional circumstances relief that the government so generously provides. I know of a tyre businessman in my hometown of Keith who not only is getting little business—because the farmers are making their tyres last a bit longer and not replacing them as they should or are perhaps just doing a patch-up rather than buying new tyres—but is having trouble getting payments owed to him, because the farmers do not have much money to pay him, so he is getting the double whammy. I am very thankful that we as a government were able to acknowledge the fact that, as the member for New England mentioned, not only farmers but whole communities suffer. We have now acknowledged that. I think the government probably did get it a bit wrong previously, but we were very quick to change the definition of small business from 20 employees to 100, which, as was pointed out by the member for New England, is the same definition used in the Work Choices legislation.

That change affected one business very near me that had 30 employees. That business could have got rid of 10 employees to become eligible for EC relief, which would have had quite a disastrous effect on the town. We used our nous and amended the legislation very quickly, and that enabled businesses in rural areas that I would consider to be small businesses to become eligible. That was an example of the government acting very quickly to fix an anomaly. The last thing we want in drought affected areas is for businesses to cut back, because when the rains do eventually come it will be very hard to get those employees back. We already have shortages in some fields, such as mechanics, and if they left it would be very hard to get them back.

The prolonged drought is having a severe effect on farmers and regional communities. Of my electorate of Barker, which is 64,000 square kilometres, over 40,000 square kilometres have already been EC declared, and I suspect that by the end of the next month or two it might actually be up to about 60,000 square kilometres. This is the first time that people in my electorate have had their areas fully declared as being in exceptional circumstances, so it is not as if we are used to the idea of going to the government for help. In fact, as many in this chamber would know, that would be the last thing on the minds of many farmers. But I have encouraged them. I believe this drought is, as other members have said, a natural disaster of unforeseen magnitude, and it has occurred in areas that have not seen drought before. I am not sure whether it is the worst drought in history—I have read the history and note that, from 1895 to 1903, the Federation drought was pretty severe—but, if it is not the worst, it is pretty close to the worst. These are quite extraordinary times for our rural communities.

Three areas have been EC declared in the Barker electorate, and they are the Murraylands, the Murray Mallee area and the upper south-east. Including those in Barker, there are now 64 areas of rural and regional Australia that are EC declared, and a further two areas in my electorate are currently being assessed for EC declaration—and, as of yesterday, I believe there may be another application from the South Australian Dairyfarmers Association. The total area that is now EC declared is approximately 45 per cent of Australia’s agricultural land, which is quite extraordinary.

In November 1996, the Prime Minister announced that agriculturally dependent small business operators would have access to the same EC assistance that is already provided to farmers. This assistance includes EC relief payments and ancillary benefits, such as a healthcare card and concessions under the Youth Allowance and Austudy means tests. Assistance will be available to eligible small business operators until 30 June 2008 unless that date is extended by regulation. For farmers, it actually goes until March 2009, and that is on the basis that for every year of drought you need one year for recovery. In many cases we are basically looking at three years of pretty tough conditions.

That is going to be very important to our farming and business families who want to send their children off to university. When times are tough, farmers tighten their belts and, unfortunately, the children often miss out on university, because of the extra cost, if they are unable to qualify for Austudy and rent assistance. Quite conservatively, because those people from rural areas have to move to a town and rent a place to live, you could say it costs them at least $10,000 more than if they could stay at home. That is $10,000 more than their city cousins would need; they can drive to university or catch a bus. So that is an extra cost for farmers and, as I said, in tough years their children tend to miss out. I think that measure is very important to ensure that our rural youth do not miss out on tertiary studies as a result of climatic conditions.

Agriculturally dependent small business operators face many financial challenges; therefore, it is imperative that this assistance be available and it warrants the prompt action that we have taken. We need to assure rural communities that there is support available for those businesses that can demonstrate a sustained negative impact on business activities and income. The proposed amendments provide small businesses which would otherwise be at risk with the ability to bestow services on rural and regional communities which, if not addressed, would have a significant impact on those communities and the broader economy.

The purpose of the Farm Household Support Amendment Bill 2007 is to allow agriculturally dependent small business operators access to the same EC assistance that is already available to farmers who have been adversely impacted by drought. Specifically, the bill will formalise current ex-gratia arrangements for EC relief payments and allow agriculturally dependent small business operators to access a healthcare card and concessions under the Youth Allowance and Austudy means tests. The bill will also make amendments to the Farm Household Support Act 1992 to bring it into line with the intent of the Age Discrimination Act 2004 and the changes made to that act in April 2006.

Agriculturally dependent small business operators are currently able to access EC relief payments through the ex-gratia arrangements. The amendments to the FHS Act will formalise these arrangements by outlining eligibility criteria, payment rates and multiple entitlement exclusions, and will provide agriculturally dependent small business operators with access to a healthcare card.

The amendments also include provisions for farmers who have diversified into agriculturally dependent small businesses—for example, they might be contractors engaged in trucking or harvesting crops or making hay for other farmers. As these farmers are no longer deriving a significant proportion of their income from the farm, they would not be eligible for EC relief payments as farmers, and their continued ownership of farm assets would affect their eligibility under the small business assets test. To make sure that this category of farmers is not disadvantaged, applicants in this situation will have specific farm and small business assets exempted from the relevant assets and means tests. These provisions do not apply to farmers who continue to derive a significant amount of income from their farms but who also operate small agriculturally dependent businesses.

The amendments affect agriculturally dependent small business operators where 70 per cent or more of their gross business income is derived from providing farming related goods and services to farmers in EC declared areas. To ensure that small business operators can continue to access assistance where they are reliant on providing agriculturally related goods and services to farmers in areas that continue to be EC declared, it may be necessary to extend the availability of EC assistance for eligible small business operators. The bill provides for this by allowing the end date to be extended by regulation.

The consequential amendments to the Social Security Act will provide agriculturally dependent small business operators with concessions under the youth allowance and Austudy means tests, mirroring those that are currently provided to farmers. The changes to the Social Security Act will make the same exempt assets, as outlined in the Farm Household Support Act, exempt under the youth allowance and Austudy means tests.

The consequential amendment to the Age Discrimination Act will make certain that the Age Discrimination Act applies consistently to the provisions in the Farm Household Support Act that relate to payments made to farmers and those made to agriculturally dependent small business operators. The change will allow exceptional circumstances relief payments to be provided to eligible small business operators at a rate that is in accordance with their age. Sections in this act that limit access to assistance based on a person’s age and which have not already been granted exemptions under the Age Discrimination Act will be repealed in order to bring it into line with the intent of the Age Discrimination Act. (Time expired)

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

For those of us who come from rural Australia, and on my father’s side I belong to a family that have lived on the frontiers of Australia for 120 or 130 years, we speak with some authority. Whilst I have had cattle for almost all of my adult life, I come from a family very experienced in businesses that serviced the cattle industry but were not directly involved with cattle. Whilst the businesses we had would not fit within this criterion, I applaud the government for taking this initiative. It is one that has needed to be undertaken for some time.

It would appear from my reading of the minister’s speech and the legislation itself, the Farm Household Support Amendment Bill 2007, that this only extends to 30 June 2008. I cannot for the life of me see why the good principle that is espoused here is concluding then—and the minister is looking at me here and I would like clarification if that is in fact incorrect. I find it misleading, and I notice in the minister’s speech that the date is 2008. It is not a matter for giggling at me.

Anthony Byrne (Holt, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I am not giggling. I am just saying that the member for Eden-Monaro is not the responsible minister.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

It is a matter for clarification as far as the parliament is concerned. In any event, I do not think that the subject matter we are talking about here would be a matter for frivolity. These related industries are far more vulnerable than the industry itself. In the cane industry, a cane farmer in the areas which I represent, which is probably about 40 per cent of the Australian cane industry—a very big industry; probably $1,000 million worth a year would be produced there—can sell out to lifestylers or to timber people who are advocating that you will not pay as much tax if you invest with them. There are a number of alternatives available to a cane farmer. He can switch to small crops. He can put lychees in. He has a number of other options, such as cattle fattening, open to him.

But a cane harvester often has more money—an awful lot of cane harvesters I know have two or three harvesters at half a million dollars a piece—invested in the industry than the cane farmer. If sugar continues on its downward spiral and the government does not come to its senses with respect to ethanol, then we have got very grim days ahead of us. But it is much less grim for the cane farmer than it is for the cane harvester. As I said, there are a number of alternatives open to the cane farmer. He can diversify, but a cane harvester cannot. What do you do with a cane harvester if you have got no cane to harvest? You indeed are up the creek without the paddle!

In cattle, for example, we have the livestock hauliers. Whilst their prime movers are marketable, the trailers are really not very suitable for anything else and to modify them so that they would be useful for other purposes is not practical. Again, here is an industry that is related to cattle but one that would be far more badly hurt by a drought or flood or the various other exceptional circumstances criteria than the farmer himself. So we applaud the government for the big moves that are being made here, but we seek some clarification on some of the details. We would strongly urge the government to reconsider, if there is a cut-off point in 2008, removing that provision.

Having said those things, we have to put this into the bigger perspective. When I say ‘industries’, people immediately imagine a man on a horse or a man on a tractor, but the vast bulk of the employment in most agricultural industries is in the support industries whether it be livestock hauliers, fencing contractors or mustering contractors, the helicopter owners or the people that sell supplementary feed in the cattle industry. In the cane industry, similarly, there are miles of ancillary industries depending upon the farmer for their existence.

What these industries require, whether they be the farmers themselves or the backup downstream industries and service businesses, are two things. Like everyone, they require a fair go—a level playing field. What this government has done—and far more culpable was the Keating government before it; but this government is equally culpable—is that it has not delivered a level playing field. In fact, it took our level playing field away from us. The last time I looked, the average tariff level for OECD countries was 49 per cent. The same figure for Australia was six per cent, most of which comprised the dairy levy and the sugar levy, both of which are being phased out—they may have even been phased out at the time I am speaking of. So a fair figure for Australia would be about 3.5 per cent or four per cent. We do not have a level playing field; we have our competitors up there running 100 metres with a 30-metre start, and we are expected to catch them. Our government has deprived us of the right to have a level playing field, whether that government was the Paul Keating government or the current government. I am deeply disappointed that there has been absolutely no attempt by the members of the government of Australia or the people that represent rural Australia to bang home this point to their own government. I would find it very difficult to find a single speech in this House that draws attention to the fact that while they preach level playing fields they in fact have put us on the most unlevel of playing fields.

The second thing required desperately by the rural industries—and I am talking about broadacre farming and the drought, but also flooding because sugar can be argued to be a broadacre crop and it is subject to flooding, which comes under exceptional circumstances, or did last time I looked—is assistance from government in the financial markets. All our rural industries that are competing on the world market are by their very nature cyclical. The price goes up and the price goes down. If you look at long-term prices in the wool industry, prior to the intervention by Doug Anthony with the buying scheme, and even afterwards, you will see that they are cyclical. The cycle is on a much higher level than the cycle was before the introduction of statutory marketing in the wool industry. It is similar in the wheat industry, the cane industry and the cattle industry.

But in those down cycles the banks panic. Australian banks are not very enlightened. They do not take a long-term view. The major banks have given up about 40 per cent of the market and they are desperately trying to win it back. When I was driving from the airport in Townsville back to Charters Towers, it was very funny to see a huge sign up there from one of the major banks—I think it was Westpac—effectively saying, ‘We love farmers; we want you to do business with us.’ Well, they closed all their rural branches, they lost all their expertise in this area, they did not want to know us, they sold us up and let Rabobank come in and take all of that ground from under them. Rabobank is now one of the major rural banks in Australia. Elders, the QIDC Bank and the rising and aggressive Bendigo Bank have taken a huge swathe of the rural markets from the mainstream banks because they have no enlightenment, no long-term view and no great or significant understanding of the industries that they are dealing with.

Let me be very specific: during the downturn in the cattle industry which was coupled with the drought in the late 1980s and early 1990s, our interest rates went to 23 per cent. That was the normal and almost universal interest rate in the cattle industry throughout that period. We were penalised because we were an at risk industry, which added 2.5 per cent to the 17 per cent interest rate regime of Mr Keating, the world’s greatest treasurer. He let all his supporters run away with thousands of millions of dollars playing monopoly games with each other whereas the Australian people had to pay 17 per cent interest rates to rescue the mainstream banks that had been so frivolous with their money. Whilst that figure was 17 per cent for Australia, we were hit with a penalty rate of 2.5 per cent because we were in an at risk industry. Then we were hit with another 2.5 per cent on top of that because we were in an at risk area which was suffering drought at the time. So another 2.5 per cent got piled on. Then, normally another one per cent went on in bank charges, because they wanted to oversight us. They put all sorts of charges on us—they had to pay three valuers to come out and look at our place, they had to review it, they had to do an inspection and they had to get a consultant in to give them another report on how we were going to get out of our troubles. I speak with great conviction and knowledge because we in fact paid 29 per cent in 1989, I think it was. That was the figure with bank charges that we paid in that year.

There have been enlightened governments in this country: Theodore and McEwen were the dominating figures in Australian history in the last century. I think all the history books tend to agree on the very great influence of Theodore that was carried on with Curtin and Chifley after he was gone. Those people said that we needed development banks. They used the words ‘development banks’, and they were not bad words to use. What happened was that when you got into the sort of situation that the cattle industry was in at the end of the eighties then you would go to this bank and it would ensure that at least you were paying only 17 per cent ordinary interest rates instead of penalty interest rates.

I speak again with very great conviction because I was one of the two ministers charged with the responsibility of the state bank in Queensland, which was called the QIDC. I received much criticism when the QIDC was switched over to a formal bank, as many in this place were quite aware of the prominent position that I held at the time. I will not use his name or be specific but the chairman of the bank at the time informed me that a third of the sugar industry would have to go. This was during a downturn in the sugar industry in the mid-eighties. I tried to explain to him that the industry was cyclical. We were at a function and I said, ‘No, I’ll come tomorrow,’ and the next day I brought to him the cycle of prices in the sugar industry and I showed it to him.

He explained to me as if I were a simpleton and a person that did not know anything about anything of importance that it was beet sugar from Europe that was crashing the world market. I informed the chairman that beet sugar had crashed the Australian sugar industry in 1898. It was not a new phenomenon for us to live with. We had lived with it for 100 years and it was not to be taken into account. I said: ‘We are at the bottom or maybe halfway down a down cycle—who knows, but we are not going to kiss goodbye to a third of this industry when we know we have a cycle here and we know that, with a proper government approach to this matter, it will recover.’ People said, ‘You did this to subsidise.’ No, we made huge profits in the QIDC. We went from a little bank of $250 million to a giant bank of nearly $4,000 million in a very short space of time. I think we are talking about nine or 10 years.

We people in rural Queensland will never forget that it was the National Party government, the Borbidge government, that sold that bank out from under us—we will not forget that. It was put in place to rescue those people. We brought almost every single sugarcane farmer through that period. If we had listened to this man we would have let a third of the industry go, but then, not eight months later, the price of sugar doubled because there was a cycle and it just happened to be a shorter cycle than normal.

We had the resources and the accumulated knowledge of government behind us when we made that decision. This man had come from the financial accounting industry and he had a towering ignorance of the subject he was dealing with but he would not be advised or listen to anyone; he was going to make his own decision. We had to ask him to stand down. It was a very controversial decision by the government. If we had not done that a third of those hardworking cane farmers—almost every one of them who had cut cane by hand as young men—would have vanished. Thousands of mill workers and downstream people that depended upon this industry, the people we are talking about today, would have been utterly distraught.

The greatly enlightened men of Australia, Mr Theodore and Mr McEwen introduced the Commonwealth Development Bank and the AIDC. Bjelke-Petersen introduced the QIDC in Queensland and the Rural Reconstruction Board. There were five different organisations that we could go to for help to get us through these periods. That is one of the reasons that the accumulated wisdom that a farmer has is so important. As one of my great friends in the citrus industry said: ‘People say I’m making a lot of money today as a grape farmer. What they forget is that it took me 15 years to become a grape farmer.’

In farming sometimes it might take you two or three generations. The station property I own never had cattle on it because no-one knew how to handle that country. But through the accumulated wisdom of three generations and some very good people who worked in agricultural science for the state government—they do not exist anymore; they have been wiped out by the current state government in Queensland—thanks to those people, we found out how we could run cattle and run them prosperously in that country. Because there is water everywhere there, there is lot more wildlife there now than in days past. Terrible fires went through there. In our second year on St Francis, fire broke out on the place next door and went for 800 kilometres. It took out every single tree for 800 kilometres. If you flew over it, you would see the imprint of the tree because there was ash on the ground that was a dark fawn in colour. But now man is there and there are firebreaks so that the terrible calamities that happened in the past cannot happen in the future. We have made this Australia that we live in a much better place.

As for it being the worst drought, Australians do not read the history books. It is a terrible shortcoming in this country that we have the shortest of knowledge time spans. From about 1884 through to 1914 it hardly rained in Australia. They called it the Federation drought but it actually started in 1884. Whilst there were some good years in there, it hardly rained at all. The spawning of the Labor Party came out of that because the cockies were broke and they demanded that they pay less to the shearers. The shearers got their backs up, they went on wild strikes and then there was violence in Queensland. There were 2,000 troops that were moved into western Queensland and the entire state executive of the AWU was jailed. I think 13 of them in the Rockhampton branch of the AWU got three years hard labour for going on strikes. There were woolsheds burned all over the place, people were shot and tied to railway lines. Out of that great violence was born the great labour movement which did a lot of wonderful things for this country, and I do not hesitate to say that. Some 26 million sheep died in a period of three or four years during that time. It is fraught with these things but the great instruments that the Theodores, the McEwens and the Bjelke-Petersens gave us in the state banks that helped us in these situations have been removed. (Time expired)

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

I am really pleased to have an opportunity to participate in this debate on the Farm Household Support Amendment Bill 2007. I begin my remarks by saying that I am supportive of this bill as it further assists rural communities and the vital businesses providing services to primary producers in this country at a time when we are experiencing one of the worst droughts on record. I listened carefully to the words of the member for McMillan, who spoke very passionately. Clearly, he has a very close working relationship with his constituency. I thank him for the work that he has done to personally convince our government and ministers to continue to work on providing a better response to the people in this country affected by drought.

I also listened to the member for New England. It has often been said in our community that rural people are the backbone of our society. It is certainly true that over the years primary producers have made a very significant contribution to the development of this country. We live in a country that has seven amazing parliaments, a national library, libraries in every state and territory, art galleries, museums and theatres. Many of these were built during the heyday of primary production, so we did indeed ride on the sheep’s back, as they say, although we also benefited from the wheat and other produce that was grown as well as from the dairy industry and the many other industries that form the primary production sector.

Like the member for New England, I get very angry when I hear members in this place, those in the financial press and others in the financial sector having a go at the farming sector when it gets a bit of help during these ‘extra’ exceptional circumstances, accusing farmers of being agrarian socialists. I really find that highly offensive. As the member for Kennedy has just said, many in this country have a very short memory. I think that all of us have an obligation to stand by those in our community who are going through hard times through no fault of their own. This is not about poor business management. This is about adverse conditions, in this case the ‘extra’ adverse conditions that these people have no control over. I also agree with the member for New England that we could better respond to and overall plan for these drought events because they are regular events in Australia, although we are never quite sure of the time frames between them.

Having grown up in rural Western Australian towns and as I am now representing a substantial farming area, I have seen first-hand the contribution that rural communities make to our country. I have also witnessed the suffering that drought brings, not just to the producers themselves but to all the people who live in those communities and rely to some extent on the health of primary production for their wellbeing. I think the coalition recognises the importance of primary production in our country and the fact that our primary producers not only grow food for local consumption but also play a very significant role in producing the exports which assist Australia to maintain a healthy balance of trade. I think this point was lost on the previous Labor government when, indeed, the then Prime Minister had to be shamed into providing support for drought stricken farmers by the generosity of the wider community. Who can forget the previous Labor Prime Minister saying these people had just got to learn to deal with these situations and the government was not going to provide subsidies for them? This was after four years of sustained drought going back to the early 1990s. We saw through the Farmhand Appeal project—run by Ray Martin, if my memory serves me correctly—a generous outpouring from the general public of Australia that shamed the then Labor government into doing something about providing support for farmers in drought stricken areas.

Despite a widening disconnect between rural and urban dwellers, when the dire circumstances that farmers face in adverse conditions become known to the community at large there is considerable sympathy and a real willingness to dig deep and help. Etched deeply in my memory bank is a visit I made to drought stricken rural New South Wales in 1994, when I was a new shadow minister for small business. After four successive years of drought, many primary producers were at breaking point. I witnessed during that trip grown men, tough men, cry—and women, but I mention men in particular because men in this country are not supposed to cry; well, that is the folklore. I saw men break down and weep as they told the story of the devastation on farms—farms that had been held by their family for several generations—where they had no hope of a future. These people were unable to keep their breeding herds alive. They watched as the country sank deeper into drought and as their life’s work, and indeed that of several generations of their family, disappeared before their eyes. Along with that, sadly, this country saw record numbers of young men in rural areas taking their own lives.

The generosity of town and city folk was evident in Casino, for example. In Casino business women set up a scheme to invite farm women to come into town once a week to use showers and washing machines. Things were so bad that whatever little water that could be carted was used to keep their breeding herds alive, leaving no water for the basic things that we take for granted like having a shower and doing the weekly washing. Meetings in town halls in Coraki and Tenterden and in towns in other parts of rural New South Wales brought heart-wrenching tales of proud people and proud communities brought to their knees by drought. One of the flow-on effects was the disastrous effect on businesses in the towns. As the member for New England said, I can never understand why we do not have a proper planned response to drought so that there is not this lag time and there is not this ridiculous political discussion about—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! It being 7.30 pm, the debate is interrupted. The debate may be resumed at a later hour and the member for Pearce will be entitled to continue her remarks when the debate is resumed.