Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

by leave—Labor governments have a proud history of improving Australia’s agriculture policy to support our farmers and underpin economic growth. Under the Hawke and Keating Labor governments, significant agriculture policy reforms were introduced, many of which have enjoyed bipartisan support over the years including:

• Establishing the Rural Research and Development Corporations.
• Creating Landcare, an internationally acclaimed partnership between farmers and the environmental movement.
• And, of course, introducing ‘exceptional circumstances’ policy to help farmers and their families in times of extreme drought.

Labor has consistently faced the challenges of rural policy reform. That has continued under the Rudd government with the introduction of the Caring for our Country and Australia’s Farming Future programs and again yesterday when the Wheat Export Marketing Bill was passed in this House. The government recognises, however, that there is now more work to do.

The farm community now widely acknowledges that climate change is the greatest challenge facing rural Australia. Climate change is the greatest challenge facing rural Australia. It is a major challenge for rural communities, farm businesses and policymakers, particularly in the area of drought policy.

Labor has long recognised that, despite the best efforts of farmers to prepare for periods of low rainfall, severe droughts have a serious impact on the livelihood of rural Australia. Labor’s early drought policy reforms recognised for the first time a key principle that has since been supported by all sides of politics—that is, despite farmers’ efforts to prepare for drought, no-one could have predicted the severity of the drought we are now facing. Indeed, that is what is meant when we refer to ‘exceptional circumstances’.

Exceptional circumstances policy was underpinned by a number of key principles including:

• encouraging primary producers and other sections of rural Australia to adopt self-reliant approaches to managing climate variability;
• maintaining and protecting Australia’s agricultural and environmental resource base during periods of climate stress; and
• helping agricultural industries return quickly to levels of production which are sustainable in the long term.

To deliver these objectives, early drought policy was based on a number of key elements including:

• exceptional circumstances (EC) declared areas to define those areas in need;
• EC business assistance grants and interest rate subsidies to help farmers sustain their livelihoods in times of drought;
• financial planning programs for farmers and rural communities;
• drought relief payments to help families struggling due to drought; and
• the Income Equalisation Deposit Scheme, a precursor to the Farm Management Deposit Scheme, to help the benefits of the good years stretch into drought years.

In opposition, Labor gave broad support to changes to drought assistance introduced under the previous government. It is now widely acknowledged that the current drought has been significantly worse than when EC was originally conceived in 1992. The early drought policy was initially based on a model of a one in 20 to 25 year event. For example, at the time, it was not envisaged that a situation would arise when irrigators were unable to access water, as is currently the case. Furthermore, it was never conceived that some areas of the country would be in drought for eight consecutive years, as is the case in some parts of Australia today.

These facts have raised questions in the minds of all Australians, including rural Australians, about the link between climate change and drought. The band of climate variation is shifting. In recent years, these questions have been confirmed by a growing body of credible science. Recently, both CSIRO and the Australian Bureau of Meteorology have explicitly recognised the link between the current drought and human induced climate change. Against this background, the government believes that it is time for Australia’s farming community and rural policy makers to reconsider the meaning of EC for the future. By undertaking reform to drought policy now, we can help farmers to adapt and respond to climate change, as well as develop closer links between the objectives of drought policy and the challenges of climate change.

There is now an urgent need to start planning for a future likely to be characterised by:

• reduced water availability;
• increased frequency of extreme weather events such as flooding, drought and cyclones;
• increased frequency and intensity of fire;
• altered distribution and survival of pests, weeds and disease; and
• increased risk of heat stress for intensively housed animals.

That is why the government has announced a major review of drought policy. There are a number of critical areas where it is clear there is a need for new thinking in relation to drought policy. For example, it is now clear that climate change means we will need to re-examine the early model of a one in 20 to 25 year drought. Despite all the different views about the pace of climate change, there is agreement on one thing. I do not think anyone believes that, when this drought breaks, we will be waiting 25 years for the next one. If we change nothing, farmers in the future will miss out when the one in 20 to 25 year test is applied.

Another area of concern that many farmers have raised with me is the issue of lines on a map. This is one of the critical elements of early drought policy which the government believes needs careful consideration. With the benefit of time and experience, both sides of the House would probably now agree that creating distinct geographical regions within which a drought event is declared has its own challenges and difficulties. During my travels across the nation over the past six months, many farmers have made it clear to me that the lines on the map are unable to distinguish accurately those farmers in need. The current system allows neighbouring farms with identical needs to see one farm receiving assistance while the neighbouring farm receives nothing. We can do better.

It is now clear, with the benefit of hindsight, that this model needs closer examination. There is certainly widespread support from the farm community about the need to review drought policy. As the President of the National Farmers Federation, Mr David Crombie, has said, and I quote:

While the Government must continue to address the ‘here and now’ of drought through Exceptional Circumstances as the first priority, equally, we must cast an eye to the future.

That demands a new cooperative partnership between government and farmers to invest and work together to better drought-proof Australia and, ultimately, shift the policy focus from ‘drought relief’ to ‘drought management and preparedness’.

That is why, on 19 June, after extensive consultation with my state colleagues, I was pleased to publicly release the terms of reference for three separate investigations which form the national review of drought policy. I table the terms of reference for those reviews.

The three parts of the reviews are:

• firstly, a climatic assessment by the Bureau of Meteorology and the CSIRO;
• secondly, an assessment of the social impacts of drought by an expert panel; and
• thirdly, an economic assessment by the Productivity Commission.

The assessment being conducted by the Bureau of Meteorology and the CSIRO will provide underpinning evidence on the effect of climate change on the nature and frequency of exceptional climatic events. This scientific assessment will comment on the appropriateness of the current one in 20 to 25 year exceptional circumstances event trigger, based on the historical record, and will identify information needs and areas that require more detailed assessments. I expect to receive the Bureau of Meteorology and CSIRO report in the next month.

I recently announced the members of the expert panel to conduct an assessment of the social impacts of drought, which will be chaired by Peter Kenny, who is a cattle producer from Queensland and is President of Agforce Queensland and board member of the National Farmers Federation.

Other members of the panel include:

• Sabina Knight, an academic and expert in remote area health;
• Mal Peters, principal of a family farming enterprise in northern NSW, board member of the Australian Farm Institute and a former President of NSW Farmers Association;
• Professor Daniela Stehlik, Foundation Chair in Stronger Communities at the Curtin University of Technology;
• Barry Wakelin, the former member for the electorate of Grey, and a former Chairman of the Standing Committee on Aboriginal and Torres Strait Islander Affairs;
• Sue West, the chair of Anglicare Western NSW and a former senator; and
• Lesley Young, National President, Country Women’s Association of Australia, who is also a mixed farming operator in Tasmania and a former Chairman, Rural Financial Counselling Service Tasmania.

The panel will visit rural communities to hear first-hand how the drought has affected them.

The work done by the Productivity Commission will look into the appropriateness, effectiveness and efficiency of current Commonwealth, state and territory government drought business and income support measures. It will also examine the most appropriate measures to build self-reliance and preparedness to manage drought. As part of the inquiry the commission will release a paper on the issues surrounding drought and the impact on rural and regional communities. The commission will call for public submissions and conduct hearings across rural and regional areas of Australia.

Following extensive consultation, the commission will publicly release a draft report by the end of October this year. This will ensure it will examine all of the issues surrounding drought and that its impacts are considered. The commission will provide the government with a final report by the end of February next year.

These assessments, taken together, are a crucial step forward in the government’s efforts to ensure drought policy meets the future needs of our farmers in a changing climate. The Rudd government is determined to support our farmers to build even more competitive, productive agricultural industries. The drought policy review will complement other initiatives such as the $130 million Australia’s Farming Future package, which will increase on-farm preparedness, boost research and provide more professional advice and training to primary producers.

I want to stress that the Productivity Commission’s inquiry and the expert social panel’s assessment include comprehensive public consultation processes. The government does not have a predetermined outcome in mind except that the overriding policy objective of the government is to better prepare farmers for climate change. It is important to reiterate that the review will not affect anyone receiving assistance in a current EC declared area. This review is about preparing for the next drought.

Equally important to note is that the National Rural Advisory Council’s reviews of expiring EC declarations are not related to the review of drought policy and will proceed independently. The membership of NRAC remains the same as under the previous government and their assessment and recommendation tasks remain the same as under the previous government.

The government also recognises that some farmers coming out of EC drought declarations still require further income support. That is why, on budget night, the government announced a new program—the transitional income support program. TIS has been introduced to assist farm families who are in serious financial difficulty or who are recovering from drought, while they adapt to changing circumstances, including climate change. TIS is not a replacement for EC relief payments. The program is available to farmers coming out of EC declarations who still may find it difficult to put food on the table. It is also available to any farmer in any area who is in serious financial difficulty.

TIS has eligibility tests in line with other social security income support payments to ensure that those seeking financial assistance from the taxpayer must first draw on their own reserves. Farmers will need to meet a liquid assets test and farm business net assets test which has been benchmarked with other social security payments and set in line with the net assets level of low-income farmers.

Transitional income support will be available for up to 12 months from 16 June 2008 until 30 June 2009. Any assistance after that date with respect to TIS will be considered in context of the drought policy review. Transitional income support will have a climate change focus and strengthened eligibility criteria, and farmers will be obliged to take action to achieve self-reliance. Rural financial counsellors will assist farmers to plan for the future and take action to improve their long-term financial position.

The Rudd Labor government is helping farmers prepare for the future, a future in which the greatest challenge they will face is the challenge of climate change. The Australian climate has always been challenging for people working the land, and Australia’s farmers have proven to be adept at responding to our harsh climate. I believe Australian farmers can and will adapt to the challenge of climate change. The Australian government stands ready to assist them with this challenge.

I seek leave to move a motion in relation to the debate.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent Mr Truss (Leader of the Nationals) speaking for a period not exceeding 15 minutes.

Question agreed to.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The opposition welcomes the statement by the Minister for Agriculture, Fisheries and Forestry on the review of the exceptional circumstances drought program. Whilst the statement does not include any new announcements, it certainly summarises some of the recent events and the government’s plan for the future. As the minister rightly indicated, there has been a degree of bipartisan support for the need to provide support to and assistance for farmers during exceptionally difficult times. Farmers, like other businesspeople, are expected to endure the bad times as well as to enjoy the good. But when there are exceptional events beyond which even the most efficient and competent manager could reasonably have been expected to be prepared then there is a strong case for taxpayer support to help those people through those difficult times.

It is also an important investment in the nation’s future, because if we allow our breeding stocks to disappear and the viability of our farm sector to degenerate then we will not have a capability to produce food and fibre for our nation when the better times return. So it is important for us to maintain—alive and strong—the skill base, the investment, the breeding stock and the technology so that the farm sector is able to respond rapidly when good times occur. As the minister rightly said, the history of Australian farming has been a history of battling the elements. We have regular cycles of drought and these have happened ever since modern history has been recorded. The reality is, therefore, that we need to take advantage of the good times to help us through the bad—a philosophy that enjoys, I think, a high level of bipartisan support.

Many believe this particular drought to be the worst in recorded history. It is certainly the worst in modern history and the worst since Australia has had a sophisticated farming sector. Just before the last federal election, around three-quarters of the farm area of Australia was declared to be in exceptional drought circumstances. One hundred per cent of New South Wales and South Australia were so declared, and more than 25,000 farm families were receiving assistance, at that stage, in a program that had by then already cost over $2 billion—way beyond what has ever been spent on drought assistance in the past. That number is undoubtedly continuing to rise, because many people are still receiving assistance. There has been good rain in some parts, and that has been good to see, but there are still many, many areas where the situation is quite desperate, and it is hard to see that farmers in those circumstances can look forward to normal seasons in the short to the medium term. I welcome the announcement by the minister a fortnight or so ago about extensions of many of the areas that were expiring on 15 June. As I said to him previously, that announcement was too late—a delay which gave people unnecessary concern. Of particular concern was the fact that Centrelink was contacting people to tell them they were going off assistance when in fact many of them did not in the end go off assistance. That demonstrates what can go wrong when these announcements are delayed.

The first two or three pages of the minister’s statement included a fair dose of political propaganda, no doubt written in party headquarters. I am always amused at the way in which Labor ministers rewrite history to take credit for the good things that have happened in history, whether they were there or whether they were not. I notice that the Hawke and Keating governments, in the minister’s statement, are given credit for establishing rural research and development corporations, for creating Landcare and for introducing exceptional circumstances policy. I think that many people would highly dispute such a version of history. True, the Hawke and Keating governments played a role, but some of those things were in place long before the Hawke and Keating governments, and certainly there had been assistance for drought going back a long, long way before those governments. Indeed, the Keating government had to be dragged kicking and screaming to provide the exceptional circumstances drought package at that time, and even then what was provided—though generous by Commonwealth standards at that time—was well below what people now expect.

Of course, the states originally provided drought assistance but, sadly, they have walked away from their responsibilities in that regard. Some of the real challenges that the previous government faced were in getting sufficient cooperation from the states to make the process work. I was particularly pleased to note the rapid turnaround by the states when the minister, a couple of weeks ago, asked them to redraw boundaries. When this process first started and I went to the states and asked them to redraw boundaries, they said, ‘No, we are not going to redraw boundaries.’ We had to take the political flak for knocking back people who were perhaps entitled and, therefore, we were being asked to approve areas which simply did not meet the criteria just so we could pick up a few people who could have been fixed if there had been some willingness to redraw the boundaries in a sympathetic way. Some of the ice has thawed over the years, particularly as we have progressively let the states off their share of the responsibility. They have been a bit more cooperative, but I do think that it is unfortunate that the states are not bearing a bigger cooperative load in meeting the needs of those farmers and of people in the community who have to face the problems of drought.

The minister then went on to comment about some of the great things that the new Rudd government has done, such as the new Caring for our Country program which, of course, cut $1 billion off the assistance for environmental programs around the nation. Then there are the Australia’s Farming Future programs, which have taken $100 million off the programs provided by the previous government to assist farmers. And then yesterday the Wheat Export Marketing Bill was passed in this House. Not everyone considers that to have been one of the great reforms of the modern era, and I note that the Prime Minister, when he was Leader of the Opposition, wrote to scores of Australian farmers before the last election—

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

Not scores.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

Hundreds, was it? He wrote to them and said that Labor supports the single desk. He then went on to argue conclusively why the single desk should stay and how it was delivering enormous benefits to farmers. But, of course, when he gets into government, as Labor has done in every state, the single desk goes out the door quite quickly. That is why farmers are a bit suspicious when they hear the minister say that the Rudd Labor government commits to helping drought affected farmers in the future. If that promise was written by the same pen that made the promises about single-desk marketing, you can understand why many people have doubts about the reliability of that promise.

The minister then went on to outline the elements of the proposed review into exceptional circumstances support. There are three elements of that review, as he said. Firstly, there is an examination of issues associated with climate—and I note that he has asked the Bureau of Meteorology and the CSIRO to undertake that review. It is interesting, as a side point, that the government in the last budget slashed $60 million from the funding of the CSIRO and $5 million from the Bureau of Meteorology; so they may not be in the best of moods when it comes to responding to the government’s request to assess climate issues of this nature. I note that the cuts to the CSIRO in particular have led to another round of cuts to country based research facilities. I think it is deplorable that there are these kinds of budget cuts and that the CSIRO is now moving so far away from its original direction in supporting research in agricultural areas.

Then there is the assessment of social impacts, led by a committee of people who, without exception, have good experience in rural and regional areas. I am sure that they will provide an interesting social dimension to the activities.

The third part of the assessment, which worries me the most, is the referral to the Productivity Commission of measures associated with supporting farmers and communities through drought times. This is really putting the blowtorch to exceptional circumstances assistance. We all know the record of the Productivity Commission. It is very economically dry and I cannot recall a recent time when it has actually recommended assistance, particularly to a farm based industry. I was personally appalled at its recommendations in the pig industry inquiry, which we commissioned, which were delivered to the minister shortly after the change of government. Here is an industry in desperate trouble and the Productivity Commission came back saying: ‘Things are fine. They don’t need any help.’ If that is a reflection of the mood and attitude that it is going to take into this inquiry, I think farmers have a sound reason to be concerned.

I know that even the Labor Party in government choose which particular industries shall be subject to the venom of the Productivity Commission. When it came to a review of the car industry, they were not game to let the Productivity Commission loose. The Productivity Commission demonstrated clearly why they were not trusted with the review into the motor industry when they made it abundantly clear that they thought that all assistance for the motor industry should cease forthwith and that it was a waste of taxpayers’ money. So I have concerns about the approach that the Productivity Commission will take to this review. I do not have a problem with thorough, proper and scientific analysis, but I am afraid that the Productivity Commission take a predetermined position into many of these inquiries, and most industries that have been subjected to a Productivity Commission review do not feel at the end of that review that they have had a fair go. I ask the minister to consider very carefully whether the Productivity Commission is the right body to be undertaking a review of this nature and to also take into account in assessing the findings the Productivity Commission’s history and attitude towards these sorts of reviews.

The member for Maranoa, who was in here a little while ago, has brought to my attention some issues associated with the new transitional income support program. Let me say that, in principle, I think it is a pretty good idea to provide some kind of interim support for people who have lost their declaration to help them move towards a more normal income stream. It is confirmed in the minister’s statement—and the examples in the field are already coming through—that the criteria for this transitional income support program are different to the criteria that applied to the income support during times of drought assistance. It seems that many, if not most, farmers will not qualify for this new program. I notice that the budget for it is quite small, so the government has an expectation that not a lot of farmers will actually qualify for this program. I think we all need—and I particularly counsel those who are advocating the merits of this proposal—to alert farmers to the fact that only a small number of them will actually qualify for this program. I appreciate that it is likely to be the most needy, but nonetheless those who think that their income support is just going to continue for another year may find themselves mistaken because many will not qualify for this particular measure.

In relation to the review, as I said, the opposition believes that it is quite appropriate to undertake a thorough review, particularly now this program has been going for quite some time and has used more than $2 billion of taxpayers’ funding. If there is to be a food supply crisis, as we hear about in the press from time to time, this will be a particularly high priority because we do need to make sure that our industry is capable of providing food and fibre in good years and in bad to meet not only the needs of Australians but also our obligation to supply food and fibre to other parts of the world. It is an important part of our export income, but we are relied upon also by other countries.

The minister particularly made reference to the issue of the problems of people living just outside a declared EC area—the so-called ‘lines on maps’ issue. We sought to mitigate those problems by allowing buffer zones, and I think that worked well. But then eventually you get to a stage where there is a line on the buffer zone as well. However, the idea of moving to a needs based assessment from a geographical assessment also has problems. The previous government considered it and we would have done it if we thought we could make it work. The problem is that most farmers do not have sufficient records to be able to establish on their own property that they meet the one in 25 years test. They have never been obliged to keep rainfall records and farms change hands, so this may well be a problematic area also. If an individual farmer facing serious difficulties because of drought has to go through a complicated assessment process and fill out hundreds of pages of forms, that places additional stress on them at a time when they do not need that stress. Therefore, the geographical assessment also has some merit. I am not saying it is perfect—it clearly is not—but I think we need to look very closely at whether that should be tossed out, because it had some benefits too.

There will be a lot of key issues to be considered in the review. I appreciate that the minister is going into this with a constructive attitude, and he can be assured that the opposition will also be constructive. (Time expired)