Kevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Do existing exceptional circumstances drought relief arrangements provide sufficient support for farm businesses and families, many of whom are now enduring their fifth year of drought? Prime Minister, what further changes might be possible to assist Australia’s drought-hit farmers?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I do not think the exceptional circumstances support, in the eyes of some, could ever be enough. The Leader of the Opposition asks me what can be done to make it more generous. You could increase the amount of income support, you could increase the generosity of the circumstances in which interest rate subsidies are made available and you could expand the range of businesses that receive support. Of course there are ways in which it could be made more generous. The question you have to ask yourself is whether, in current circumstances, there is a case for a further liberalisation.

There was a very significant liberalisation undertaken by the government, I think earlier this year, following a liberalisation that took place last year. We extended the assistance to small businesses in affected areas. We had significantly liberalised the non-farm income and assets tests. One of my colleagues reminds me that the total amount under exceptional circumstances has now gone well over $1 billion—it is almost $2 billion—so it is very generous. I would be the last person to pretend that you cannot make it even more generous. It is a question of what is fair and balanced in current circumstances.

I might also remind the Leader of the Opposition that one of the things that have really helped farmers through the ravages of the current drought has been the introduction of the farm management deposit certificates. This was a scheme that was authored by the former Deputy Prime Minister and member for Gwydir when he was a senior member of the government. Essentially, this has enabled Australian farmers to put money into these deposits in good years and to take them out in bad years, with a greatly preferred tax treatment. I have been told by many farmers that the use of these deposits has been their saviour and that is the thing that has helped them through the drought.

I think the exceptional circumstances support is very generous, but it can always be more generous. It is a question of balance. I would remind the Leader of the Opposition that last Friday, when I was in Bathurst, I announced a further payment of $8 million to be made before 30 June to the Country Women’s Association—a wonderful organisation—to provide coalface assistance to farmers and much-needed small items. Overall this works in a very effective manner. I would say to the Leader of the Opposition that I think exceptional circumstances are now working very well. They are quite generous. If he says to me, ‘Can they be made more generous?’ obviously the answer to that is, ‘Yes.’ Should they be made more generous? It is a question of balance, having in mind our responsibilities to other people within the Australian community. I think we have the balance right, but I am a person who always keeps these things under review.