Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

This motion is about the great distress and hardship that is now afflicting some farming families who have been caught up in a backflip, a change of mind, in relation to Exceptional Circumstances Exit Grants. We hope through this motion that the government will change its mind and put less than $5 million into making good on what, we believe, was a commitment that will give some farm families a chance to restructure their lives.

The recent eight-plus years of drought extracted an enormous human and financial toll over much of south-eastern Australia. In northern Victoria over half of the dairy farms were driven out of business. Equity in farm properties was eaten away and in quite a few cases the level is beyond recovery. The exceptional circumstances payments literally put food on the table for farm families who could not generate income from their properties and their hard work. The EC interest rate subsidies meant that more farms could remain in business while we all waited for the rains. Over $2.74 billion was committed to EC support in the last four years of that drought. That investment helped keep farm families on the land so they would still be there to claw their way back with the return of better seasons. That is what they are now doing. For some the drought was too long and they needed to think about the unthinkable—the sale of their farm. Hence, there were available Exceptional Circumstances Exit Grants designed to help the farmer driven off the land to re-establish in another industry. In all, some 504 exit grants were made, while nearly 33,000 families were helped to stay on the land with the equivalent of Newstart allowance for household support through exceptional circumstances grants.

The $600 million in EC support per year over the last four years pales into insignificance when you look at what that sector is now contributing, with the rains returned. In fact, it was a great investment in the future economy. ABS data shows that, in 2009-10, agriculture alone contributed $39.6 billion to the economy in that one year when the drought broke. Estimates for 2010-11 are that gross production value will be $40.1 billion. So the EC payments were a comparatively small but very sound investment in a hardworking and enormously contributing sector. EC exit grants were a vital part of that investment, making sure that farm families defeated by the drought were supported into new employment. While by 2011 it had rained in most areas—flooded, in fact, in some—incomes were not always restored, equity was depleted and some farm families still, tragically, needed to exit the industry to survive financially.

On 10 May this year the Minister for Agriculture, Fisheries and Forestry, Minister Ludwig, delivered his 2011-12 budget overview. In the accompanying facts sheet, the Department of Agriculture, Fisheries and Forestry identified the extension of the EC exit grants to 30 June 2012, with their three components: the exit grants up to $150,000; the advice and retraining grants up to $10,000; and the relocation grants up to $10,000 per client. Revised exceptional circumstances exit package policy guidelines were duly released in July 2011 in support of this decision. On the front page in bold lettering it said:

These guidelines apply to the period 1 July 2011 to 30 June 2012.

It stated that the Australian government had allocated $9.6 million for the EC exit package for 2011-12 and the program would close on 30 June 2012 or earlier if funds were expended before that date. In fact, 21 times in the 21-page policy document it says that the closing date is the middle of next year, June 2012. But we could not believe it when on 10 August, only six weeks after that policy document was released, while agriculture minister Ludwig remained deathly silent, the Department of Agriculture, Fisheries and Forestry slipped a statement onto their website. In a stunning reversal of policy, the website stated that exceptional circumstances exit grants were fully subscribed. Centrelink was told to close the books because the government had run out of money for the program. As you can imagine, this was a sickening blow for those who had decided to sell their properties at what was, usually, a hugely discounted rate only because there was the expectation after they spoke to Centrelink that they would be eligible for the $150,000 exit grant plus the retraining money if they sold the farm.

A lot of people do not understand that in country areas selling your farm is not just like selling a suburban home or some other business, because, too often, there are intergenerational families under consideration in farm families. Family farms are often brothers working together or their grandparents and sons, and indeed grandsons, working the same property. The expectation is that the farm is also your home. It is also where people go to school. They belong to small communities. They go to the Country Fire Authority and keep it going. They go to their sporting clubs in those small local communities. So a decision to sell your family farm is a life-changing decision for anyone to make and it is a decision that often leaves families in enormous distress. There is a lot of family marital breakdown associated with selling the family farm. The decision is not taken lightly.

Unfortunately, these people took counsel from Centrelink, who said: 'Yes, while you're not going to make anything out of selling your farm—your debt is too great—with your $150,000 exit grant, with that little amount of money, you can put a deposit on a new house somewhere else. You can have some training with the $10,000 that goes with this grant. You can start a new life.' They had sold their farms before 10 August—as you know, the state declares it a sale of the farm when you have exchanged contracts and a deposit has been paid. So you can imagine the shock to numbers of my constituents, as well as those of the member for Mallee, when Centrelink said to them: 'No, until you actually get the full cheque in the mail'—in other words, settlement in 60 days, 90 days or whatever is agreed—'we are not going to deem that as you having sold your farm, so you are not going to get the $150,000, because, sorry, we have run out of money.'

I have farm families now whose lives are ruined. There is one family who had sold their livestock, their household goods, their water and their plant and equipment. They had put a small deposit on a small, modest home in Bendigo. Their three children were told they would have to leave their beloved school. That farm family could only survive—and indeed was only making the decision to move off that farm—with the $150,000 EC exit grant. They received a phone call from Centrelink saying, 'We know, we understand, the trauma that this entails, but we cannot pay you that cheque.' This is the sort of thing that is occurring in case after case across the electorate of Murray and also in my neighbour's, and the member for Mallee will soon speak to his situation.

We are begging the minister for agriculture, in conjunction with the minister for finance and with this government, to look at act of grace payments for these people. They acted in good faith. They took an incredibly traumatic and distressing decision on the basis that the government would support them into a new life. It is not a decision they would have taken or could have taken without the expectation of this grant.

How come—six weeks after the announcement of a 12-month extension of a budget, with $9.6 million committed to that extension—someone did not know that, in fact, the funds had run out? Where did the funds go to? We are looking at less than $5 million to solve this problem, yet, just today, this government announced $50 million for the state governments to be coerced into going along with the new environmental forum—$50 million. We could have had $5 million of that, thank you very much, and saved these people's futures. We are not just talking about the mothers and fathers but their children as well, who are now traumatised, with no income and with no alternative but to wonder what their future will hold.

This motion is deadly serious. It is about a malfunction of a government agency under the guidance of this government. This motion talks about a lack of caring and a lack of understanding of consequences. It also talks about, I think, some extraordinary mismanagement of budget. Centrelink must have been keeping the minister informed about how many grants had been committed to. It takes between four and six months to work through one of these grants, from the time that you agree to sell your property, to selling your property if you are lucky, to selling all the other parts of your property and then, finally, waiting for the settlement. In six weeks, I cannot understand how you could have committed the whole of the next year's budget; that just seems amazing to me. There are a lot of questions that the minister needs to ask his department and Centrelink.

Meanwhile, let us have those act of grace payments out there in the communities before too much more emotional and financial trauma occurs with these families. It is not too late now, but it is beginning to be too late for some of these farm families. They need a future. It is not their fault it did not rain for seven years. They kept working through that time. They invested all that they had emotionally, physically and psychologically. They agreed to move on through great family distress in making that decision. This government has let them down. This government needs to make it good.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I appreciate the opportunity that Dr Stone has provided to speak about the Exceptional Circumstances Exit Grants program, as my state, as well as many others, of course, has been through some most devastating drought periods in recent years. Fortunately, that has been relieved to a certain extent in Tasmania and, I believe, in other parts of the country as well. And, of course, we have seen flooding in some areas in the last year or two. But I do understand that there are some cases of people who took it very hard during that period and have had to continue to make decisions about their farming future. Firstly, I would like to say that the Gillard government has stood by rural and regional Australia throughout the drought and that it will continue to support rural and regional Australia. As most people have now gathered, improved seasonal conditions have brought relief to farmers and to rural Australia. The area of agricultural land declared under exceptional circumstances fell from 26.1 per cent of Australia in June 2010 to only 0.3 per cent in June 2011, which is a great relief to many people on the land.

ABARES is forecasting a strong outlook in 2011-12, with positive crop and export forecasts. This includes positive projections for grain, rice, cotton, livestock, fisheries and forestry. However, the government knows that some people are still doing it tough after years of drought and has provided assistance to manage the transition, and there always is the transition period. The government has provided EC exit grants. These were set up at a capped amount, and many were taken up. Funding of $9.6 million was allocated in this year's federal budget, and additional funding was provided, taking the total amount available to around $14 million. As at 30 September 2011, 504 farmers have received EC exit grants since the program commenced in 2007, and a number of applications are still being assessed and finalised.

This program was designed to assist those in severe financial difficulties whose farms were located in an exceptional circumstances declared area and who had decided to leave the land. Just as this government stood by farmers during the drought, it will continue to stand by them as it works to reform drought assistance. The Gillard government has provided significant support for farmers in exceptional circumstances declared areas. Last year, expenditure on EC assistance was almost $400 million, and this included exceptional circumstances relief payments to over 12,000 households and an exceptional circumstances interest rate subsidy to over 5,000 businesses.

EC grants are just one assistance program; there are other forms of assistance available to farmers experiencing hardship. They include transitional and income support, which is available to eligible farmers, regardless of location or industry, who are in need short-term income support to assist in the recovery from drought and to help them to manage the impacts of changing climate.

Closing the program when the funds were fully subscribed has not reduced the number of people assisted. Any person who believes they have been adversely affected by the closure of the EC exit grant program is entitled to seek a review or to appeal, and this can be done through Centrelink standing practices. Additionally, redress can be sought through an act of grace claim. Under the act of grace rules, each case will be considered on its merits and the government is encouraging people to apply so that their case can be assessed.

The honourable member for Murray might note that, in 2008, the Productivity Commission report on government drought support clearly stated that exit grants are inefficient and should be used only sparingly. In fact, it recommended that exit grants be terminated through transitional arrangements. That is why the government has been trialling drought reform measures in Western Australia, a key part of which is an exit grant system that is designed to move farmers from a crisis-management approach to risk management and to increase skills and training. The national review of drought policy found that the current system of exceptional circumstances does not represent best practice when it comes to helping farmers manage the risks associated with drought and climate variability.

Once again, the task of preparing the Australian farm sector for the future is left to a Labor government, after 11 years of inaction and inefficient programs from the coalition. If the coalition had their way, farmers and primary producers would be locked into a cycle of debt from which they could not escape. There has to be more than handouts when those on the land are facing exceptional circumstances. There must be a means by which farmers and land managers can be assisted to adjust to changes in weather patterns, which are likely to continue through ongoing climate change. The do-nothing attitude of the coalition when it comes to drought assistance and helping to find better models with which to support Australian farmers is simply galling to me. The other side never gets on a positive foot; they always oppose and are negative. They are always saying that there is no future, that the government is always doing it wrong and that we can never achieve anything et cetera. That is not true. We do need to change and look at the risk management processes and get away from just piling on the debt or looking for total handouts when it comes to drought. We need to find a way to support enterprises that are productive and that can deal with changing weather conditions.

Rural and regional Australia can see through the cheap tricks that the Liberals are playing with drought policy. When it comes to reforming drought assistance and boosting our agriculture productivity, it is Labor that is doing all the heavy lifting. And it is Labor members, through their committee work, who get in with the minister and make things happen in a positive way for rural Australia, because we look at the rural industries as industry and we work towards making them better industries in the interests of Australia.

I know that the member for Murray is really interested in the plight of her farmers. I would not deny that; I know that she is very passionate about that and would endeavour to do what she can to further assist them. As I said, there are circumstances that can be followed. I would also say to the member for Mallee that he should follow that course where he can for his constituents who might need the assistance. I believe that we can assist many through the process if they are on the edge, but we cannot continue to have a total process. We must endeavour to learn from the Western Australian pilot program. We must endeavour to train people to get enterprises onto the front foot, to understand risk, to understand how to change and drought-proof a property and how to deal with a lack of rain, as this country has ever since it has been settled by white people. We need to go that way and not hang on to some of the old ways of yesterday.

The government is working by helping the rural industries transition to other land uses and occupations, and there are avenues to assist individuals who are not coping and who need extra assistance; the opportunities are there. But if people need to move on they need to move on and decisions have to be made. It is not an easy decision. It is never an easy decision. I have had some in my electorate who went through difficult times. With a change in pricing of produce and properties not big enough to make things pay, people have to make a hard decision. So I cannot and will not support this motion but I am glad I have had the opportunity to speak about it.

John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

I have to say to the member for Lyons that I am just a bit disappointed. I am on my feet to make an appeal, which I have been making ever since 10 August, to the government. I am going to talk about real people, real families. I agree with some of the contribution that the member for Lyons has made; we have to move on, but at the moment I am trying to deal with 13 real families who, in good faith, went about the process of selling their farm, with all the emotional steps that takes. Often it is a third-generation farmer, and they have to get over thinking about what grandad would say. They brought themselves and their families to the position of entering into an irrevocable contract of sale. They have taken a deposit and, in two cases, have used that deposit to enter into another irrevocable contract of sale to buy a house in town; they have to live somewhere once the farm has been sold up. My purpose is to appeal to the government on this, with all the advice it has had from the department that the drought is over and the package is not needed anymore. At the moment the member for Murray and I are dealing with real families. In fact, in one case the head of the house is 71 years of age. He now has to borrow to fund the house he has contracted to buy, because he cannot get out of it—it is an irrevocable contract for sale. I just do not understand Centrelink saying that it is not an effective sale until settlement occurs. It is just not true. It does not happen in any other part of the business world.

I raised this matter in the House on 17 August and since then I have placed questions on the Notice Paper and I have written to the minister, Senator Ludwig, twice, on 12 August and 29 August. To this day I have received no response. I did receive a response to the question on the Notice Paper, but it was completely inadequate. It is very poor form, especially when I am dealing with real people, people who are emotionally stressed and wondering what they are going to do. Sitting at their kitchen tables we have people, grown men, crying, 'What have we done?' Well, you have not done anything; the government has let you down.

So, this is an appeal. There are plenty of processes the government can use. I think the member for Murray has half a dozen such constituents, and I have 13. There are a lot more who are complaining but are not caught in the circumstances, but I want to help them. An act of grace is an opportunity for the government here. Seven of my constituents have already applied for that through Minister Gray. My purpose for being here on my feet is to confirm this appeal. It is not right to stand behind what the bureaucratic departments have advised. The member for Murray and I have to deal with real people who have families, and they are distressed and in poor emotional shape.

I express my disappointment that the member for Lyons has not understood that point. He knows me well enough to realise that I well understand the points he makes about the need for a better safety net for the primary producers around the nation. Nobody in this place has fought harder than me to do that. At the moment we are dealing with real people in real distress, and the member for Murray and I expect a positive response. Perhaps it could be a phone call from the minister, as a result of this contribution tonight, saying, 'All right, give me the information,' or whatever. But to not respond is very poor form. My constituents do not feel as positive about the Labor government as the member for Lyons has suggested. They feel very let down and disappointed.

I am advised by a number of my constituents that the senator has responded to their correspondence. This was facilitated through my office, but I felt they might get their message through better if they wrote and told their torturous story, rather than doing it via me, because the government might think I was playing some silly political game here. They were offered act of grace payments. They have been back into my office and we have assisted them with filling out the application forms.

I think the government needs to eat some humble pie here and maybe even apologise to some of my constituents. A blunder has been made. The member for Murray and I want to know how long before 10 August the government knew that it would not honour the program beyond that date. The rural councillors in my electorate, who put an enormous effort into assisting families like those we are talking about tonight, told me that at 4.30 on 10 August they received an email saying that if settlements had not occurred by 5 pm that day the exit grant would not be honoured. That is despite the fact that all of the constituents looking for some assistance here had letters of commitment from the department, from Centrelink. They were acting in good faith. Maybe it did not happen as fast as the department wanted it to, but it takes a lot of time to sell a farm, especially horticultural farms. Most of the families I am trying to help here are engaged in horticulture to do with Sunraysia, Robinvale and to some extent Swan Hill. Horticulture is not in good shape at the moment, so it takes a lot of time to set up a purchase. The department obviously does not realise that that is the difficulty. But they have kept at it and in most cases, if they received an offer, accepted a lesser value for their property, knowing that the $150,000 exit grant would help them transition into their new future.

Some of these cases are worse than that. Sundry debtors now look like they are not going to be paid a settlement. These are the people who supply chemicals, fertilisers, machinery parts and so forth. They have been waiting patiently, persuaded by the imprimatur that the government is facilitating an exit grant sale here and that it will be paid. Imagine how these farmers now feel, having given commitments like that. They are so embarrassed. They are out of small communities. They made a commitment: 'If you give me some space I'll pay you out of what's left of the exit grant.' It is a real mess. I am hoping the government responds positively and constructively, and I hope that other government members who are listed here to speak will give a much more passionate response to the appeal that the member for Murray and I are making. The member for Lyons did, and I am expecting big things from that. I hope my appeal for compassion has been heard and that act-of-grace payments will be delivered.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

The member for Murray and the member for Mallee know that I too have a good knowledge of the farming communities that they represent. In fact, I spent some time with both of them as a supplementary member to the Standing Committee on Regional Australia, when we toured the basin and spoke to communities throughout. So I have no doubt whatsoever that they bring their genuine concerns into the House by raising this motion that is before us tonight.

I want to begin by outlining and clarifying some of the facts, Mr Deputy Speaker Adams—facts that you yourself referred to in your own contribution to the debate. Firstly, the exit grants offered time-limited, one-off assistance for those farmers whose farm enterprise is or was located in an area covered by an exceptional circumstance declaration on or after 1 July 2010. The program was clearly stated to be available until 30 June 2012, or until funding was taken up—and I repeat: or until funding was taken up. The program indeed did close in August of 2011, after additional funding to the tune of $4.4 million was allocated to the original of $9.6 million.

The program was closed when it was fully subscribed. It is as simple as that. The government has subsequently said that any person who believes that they have been adversely affected by the closure of the program is entitled to seek a review or appeal—and I think that is quite appropriate. I also understand that the government is working with individuals to lodge act-of-grace claims, meaning that each case will be considered on its merits. As both the member for Mallee and the member for Murray have said, they have raised this matter with the minister, and I understand that the minister is looking at those matters. Therefore, I think everything that could be done is being done by the minister right now. And I certainly accept that both honourable members are waiting for responses from the minister. I want to talk about this issue in a broader context, however. I said at the outset that I toured the Basin with the member for Murray as a supplementary member of the Regional Australia Committee that looked into the Murray-Darling Basin issues more broadly. I and other members of the committee heard from individual farmers and rural communities right throughout the Basin. There was no doubt in my mind whatsoever that those rural communities were doing it tough. I also understand from more recent reports that, as a result of the good rains we have had in the last 12 months or so, things are looking up and in many parts of the Basin there has been a substantial turnaround. However, I accept that for some they had sunk so low that even the end of the drought has made their own recovery near impossible.

The situation has, of course, been further compounded by two other events. Firstly, the global economic recession, which has undoubtedly put a damper on farm exports from this country. Secondly, the high Australian dollar. The high Australian dollar has had, I guess, a twofold effect. On one hand it has meant that our own exports have had to compete with exports from other countries and, therefore, sales of our own produce has not been as easy as it might have been if the Australian dollar was lower. Secondly, it has meant that the imports of foods that compete with the very foods that our irrigators grow come in at prices well below what we produce here in Australia and, in turn, it keeps the prices back home much lower than they would otherwise be as well. So the Australian dollar, as I say, has had a double effect, and then to that you add the global economic recession and, thirdly, the long drought. You can understand why the irrigators in the Murray-Darling Basin area have been doing it so tough.

But I am not, however, convinced that exit grants are the way to go. Whilst I accept that they have been a strategy and a policy area that this government has adopted, I have to say it would not be my preferred policy area if I were determining how we should assist people in the same situations. Interestingly—and, Mr Deputy Speaker Adams, you made this point yourself—the Productivity Commission has also commented about the use of exit grants and generally, I think, made the point that it is not so supportive of them. In fact, I understand it determined that they were ineffective and should only be used sparingly. My concern with the use of exit grants relates to a couple of matters. One is a matter that the member for Murray would know only too well and that is this: in the course of our work throughout the Murray-Darling Basin we were constantly told that the water buyback provisions that the government had committed to were causing a term we constantly refer to as 'the Swiss cheese effect', where it was causing inefficiencies throughout irrigation communities. It was a matter that was raised with us time and again.

It seems to me—and I cannot understand the difference—that the water buybacks were a form of exit grants. What they enabled many of the irrigators to do was to sell their water, exit their property although retaining ownership of the land but retaining a property that was no longer productive as a farm. And, if it was producing anything, it was certainly not producing the kind of income that would make it sustainable. So it was a form of exit grant and we were criticised for doing that. We were, in fact, told that we should stop providing money for water buybacks because it was having a detrimental impact on those communities. It seems to me that the use of money to directly assist people to get off the farms has exactly the same effect. If you assist a farmer to get off the farm then surely, whether you buy the whole lot or not or whether you simply pay the farmer to leave the farm, the end result is that you have one less productive farm in the system and therefore the so-called Swiss cheese effect that we were criticised for putting money into is being duplicated. I frankly see little difference, other than the management of the process—but the outcome, I believe, is exactly the same. For that reason, I do not believe it is the best way to assist farmers. The second point that concerns me is this. Given that we know that in the future there will be a greater demand for our food resources because of population growth around the world and given that the Murray-Darling Basin generally is a place where I believe our farmers produce some of the best food in the most efficient manner anywhere in the world, we have an enormous opportunity to ensure that in the future we might be in a position to supply food not only for Australia but for the rest of the world, and in so doing boost our own economy. In 1950 the agricultural produce in this country amounted to some 30 per cent of our GDP; it is now just over 2.5 per cent. That is how far it has dropped back. But we have an opportunity in the future to rebuild that, and we are not going to do so by paying farmers to get off the land. We need to find alternative methods of supporting them during the time that they go through difficulties, without throwing out the opportunity that the farming sector presents to them and to the nation as a whole in the future.

This is a very serious issue because, quite frankly, it is not only about opportunities for this country; it is about opportunities for the world, where we know we have got some of the best farming methods available at our disposal and our farmers have proved that they can produce the food that is necessary. Given that, even though it might change from one period to another, if we now have an opportunity to get these farmers back on their feet that is exactly what we should be doing. It does concern me that farmers out there are still doing it tough, but it concerns me just as much that we are being encouraged to promote policies which get them off the land, off the farm, rather than doing the exact opposite, which I believe would be in the long-term interest not only of the farmers but of the nation.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I commend the member for Makin for his efforts in trying for 10 minutes to justify the unjustifiable. It was a valiant effort. He tried to go around the subject matter as best he could, but I do not think anyone could say that in any way what the government has done here is just or is fair. The motion notes that in the 2011 budget, the Labor government announced the extension of the Exceptional Circumstances Exit Grants program as part of its drought assistance measures. Very good. Less than six weeks into the extended 52-week program, the government announced that funds had run out. The exit grant was often the only means by which some farmers could exit their farms with sufficient support to transition to a new livelihood. Many farmers who applied and were assessed as eligible for the grant proceeded to put their farms on the market and had sold their farms through exchange of contracts prior to the announcement that the funds had run out. Many of these farmers, on the basis of the exit grant support, have made financial commitments to buy alternative accommodation so they can transition to their new locality and employment. And many of these farmers who trusted the government's commitment and Centrelink's documentation approving their eligibility are now in dire financial straits with no capacity to borrow, no income and no opportunity to become re-established.

This motion calls on the government to do what they said they would do: provide the exit grant to the farmers that have sold their farms through exchange of contracts by 10 August 2011 and were eligible under the guidelines for the extra grant had funding not run out.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Where haven't they done it?

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Okay, are you saying that the government is going to go to those 30 farmers who have come to you? Are you making a commitment on behalf of the government to provide these farmers with their money?

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

You've got no idea .

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I have got plenty of idea, clear-cut, right here. You don't like hearing it.

Mr Mitchell interjecting—

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! The honourable member for McEwen should stay silent.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Sometimes in this place the truth hurts. We hear from the member for McEwen about the truth hurting. We are concerned about what they are doing and how they are hurting these farmers. I could be very unkind and say it is because the financial management of this government beggars belief. Their incompetence and waste has led to them pulling the funds six weeks into a 52-week program and leaving these farmers high and dry. That is not good enough. We have this motion today because we want the government to act.

I commend the federal member for Murray for putting this motion forward and for representing her constituents in the way that she has. She has not lain down. She has presented the facts. She has moved this motion. If the member for McEwen wants to know who the farmers are who are impacted, we have the list right here.

The best thing the member for McEwen could do is say to the Prime Minister in his party room tomorrow: 'What we did to these farmers was unjust. We led them down a path that made them think they would be eligible for the next year for exit grants.' No-one wants these farmers to exit their land but, given 10 years of drought, sadly, it was the only option left to them.

I call on the government to support this motion. I commend the federal member for Murray for bringing it to this committee. The member for McEwen should, rather than shake his head, get in his party room and say, 'What we did was wrong,' and defend these farmers.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

That was just five minutes of rant with no evidence, no support, no facts and no knowledge. It was typical coalition carry-on. They sit on their hands and do nothing when it comes to supporting farmers and rural Australians. As always, there is the talk and the grandstanding. The member for Wannon carries on, but he could not produce one shred of evidence, because it is a political stunt. Not once in this debate have we heard them identify one single cut to the program. That is because there are none. This is where the failure of those opposite quite simply lies.

The government did announce an extension of the program. In fact, they put another $4.6 million in. I would love the member for Wannon to listen. I think he should apologise for what he just said. We extended this program to $14 million from the original $9.6 million. It was fully subscribed, which is why it stopped. He scurries out of here. He could not bring forward one piece of evidence. The government put a program in place and increased the amount of funding. It was fully subscribed and then it stopped. That is what happened.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

So you led them down the garden path!

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order!

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Respect the chair, you dill! Their lack of plan for support for these communities will hold regional Australia back. It is an absolute disgrace that people like that come in here over-refreshed and carry on. In our 2011 budget we announced the extension of the exceptional circumstances exit grants to $14 million, as I said, to ensure that eligible applications that were lodged prior to the program's closure could be processed and funded.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I think he has made a bit of an imputation there by using the word 'over-refreshed'. I think that is unparliamentary. I ask him to withdraw it, please.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I do not see that as unparliamentary.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Or suggesting something that he is not.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The exceptional circumstances program offered time-limited one-off exit grants for farmers whose farm enterprise was, or is, located in an area covered by the exceptional circumstances declaration after 1 July 2010. This initiative provided an exit grant of up to $150,000, advice and a retraining grant of up to $10,000 to assist in planning for farm exit, and a relocation grant of up to $10,000 to pursue new employment opportunities. It was clearly stated that the program would be available until 30 June 2012 or—and this is the bit that those opposite deliberately ignored—until all the funding was taken up. It is not that hard: you have a pot of money and when you spend it there is nothing left; that is the end of the pot. They say, 'You shouldn't do this, but you're reckless in your spending and you throw money away.' So when we budget things, when we make the funds available, we are bad and if we continually put money in we are bad. It shows one thing: it shows that the only thing those opposite can do is say no; that is all they can do. Also, we made it clear that anyone who believed they were affected by the closure of the program could seek a review or make an appeal. And we are working closely with people to lodge act of grace claims. What that means is each claim will be considered on its merits.

After 11 years of neglect and unsuccessful programs under the coalition government, they are now trying to affect the future of Australia's farming sector. We are trialling two reform measures in Western Australia. Central to this is an exit grant system that moves farmers from a crisis management approach to risk management and increasing skills and training. As Mr Zappia pointed out earlier, we are actually about trying to keep farmers on the farm and keep them going, keep them working and doing what they do best. Those on the other side fail dismally on this part and it is further evidence that they know nothing about farming. (Time expired)

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The people of the Riverina in southern New South Wales and elsewhere too, the primary producers in the food bowl of the nation, were dealt a cruel blow by Mother Nature at the end of last year. But this blow from the Labor government has been just as bad, if not worse. There are farmers who survived 10 years or more of crippling drought and then had their harvests thwarted at the 11th hour by one of the biggest floods in the Riverina since the infamous 1974 inundation. This caused an immeasurable loss to the Riverina farming community at a time when they can least afford it. And then, when these people needed the government most, the agriculture minister assured them the government would be there to support them with an extension of the drought exceptional circumstances funding. But, through some foul act of betrayal, the government then claimed that it had miscalculated the available funds and that the exceptional circumstances funding was no longer available, abandoning the farmers and leaving them without a livelihood and without any help.

A farmer from Tarcutta in my electorate provided Centrelink with information about his farm to test his eligibility for the exceptional circumstances exit grant under the exceptional circumstances package 2007. Based on that information, Centrelink advised him that he could be eligible for up to $150,000 in assistance—assistance he greatly needed after floods had devastated his property. On 24 May 2011 he received a letter from Centrelink stating that, as part of the 2011-12 budget, the Labor government was extending the exceptional circumstances exit package with a change to the eligibility criteria. And then on 11 August he received a letter from the rural programs manager at the Department of Human Services stating that he had a pre-assessment claim approved but all the funding had been fully committed and no further applications were being accepted. This constituent had exchanged contracts for the sale of his farm, but this had not been finalised. He believes that if he had been notified that the program was to end he may have been able to speed up the sale process. Instead, he was never given this opportunity. Shame on this government!

This complete lack of consideration as to the impact of suddenly culling the funding for those who desperately require this assistance is another example of the lack of respect and consideration that this Gillard Labor government has for regional Australia. For a government which claims it is interested in regional Australia, it keeps dealing the good people of the regions blow after blow. Another constituent, Mr Laurin West, from Ungarie, has also faced the inequality of the rules around assistance for farmers. When the December floods arrived, his property was damaged—and it still requires further repairs. As a father he is trying to help his son get out of debt and leases his property to him at a reduced rate. This is Mr West's only source of income. He has had his application for financial assistance declined because the Commonwealth government mandatory eligibility criteria deem that he must be a primary producer and, because he leases his farm, he does not qualify for assistance. The complete inflexibility to factor in Mr West's circumstance being slightly different from the usual primary producer's claim highlights this government's inability to understand the workings of a farm and the handing down of a property between generations. It is about time that this government woke up and started listening to regional Australia and noted that regional Australians are hurting from the constant blows they are being dealt, whether it be the introduction of an unnecessary and unwanted carbon tax, the ill-advised Murray-Darling Basin draft plan or the sudden removal of the exceptional circumstances scheme. Regional Australians are the backbone of this country and, with the weight this government is placing on them the country, real Australia is feeling the strain. Why is this government stripping water out of the Murray-Darling system without environmental justification? Why is Labor allowing apples to be imported without sufficiently stringent quarantine protocols?

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! The honourable member will come back to the motion.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

I am, Mr Deputy Speaker. It is a summary of all the things that the Labor government has ignored regional Australians on. Why did Labor cut short the Exceptional Circumstances Exit Grants program just six weeks into the extended 52-week program? Does Labor understand or even care about the farm and food sectors? I think not, and there are hundreds of thousands of regional Australians who would agree with me on that very salient point.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

Despite the descent into political posturing in this debate, in speaking to the member for Murray's motion I first of all acknowledge where she is coming from in putting this motion forward. I acknowledge that her experience as a local member has been very different from mine over the last 10 years as so much of Australia, particularly her part, has been gripped by the worst drought in living memory. Although farmers in Central Queensland have certainly faced their own share of hardship and stress in that time, I can only imagine the journey that members from southern states have travelled with their communities as year after year the rains have failed to arrive in areas much harder hit, and with much more of a reliance on agriculture, than those in my electorate. I understand that members have stood alongside farmers and farming communities as they have confronted day-to-day hardship and even harder questions about the long-term viability of their farms and what their future might look like if farming were no longer possible for them and their families. There is no doubt that the effects of drought are still being felt in many communities and members from those regions are obliged, as they have been since 2002, to be strong advocates for farmers in communities still needing support. To that extent I support those members, like the member for Murray, in raising issues of concern to people in their electorates.

I cannot, however, support this motion in the terms in which it has been presented to the parliament tonight. The motion reflects the strong emotions associated with the very difficult circumstances farmers have been living through and the tough decisions many have found themselves faced with. But emotion and certainly not politics should not blind us to the facts about drought policy and the facts about these exit grants in particular. As much as we empathise with communities that are finding their feet after so many difficult years, we should not ignore the deficiencies and perverse outcomes obvious to all in previous drought policy and programs. And we should not be deterred from the work that is being done towards a drought policy that is more than an emergency response that only helps farmers once drought has taken hold and they reach crisis point, and even then only helps some farmers if they are on the right side of the exceptional circumstances line. With support from farming groups and states, our new drought policy is designed to give farmers what they need to strengthen their business, build their skills, manage risk and plan for their future. It is this work—the product of exhaustive study and of consultation with those with most at stake in the future of Australian agriculture—that so clearly contradicts the suggestion implicit in this motion that somehow the government is unsympathetic to the plight of drought-affected farmers and communities. In fact, trials are underway in Western Australia of a range of measures that are all about supporting farmers, their families and rural communities in preparing for the future challenges of climate variability and extremes. Support for farmers will be there to manage risk and prepare for drought on an ongoing basis, rather than continuing a crisis-driven system that farmers themselves recognise as unfair and as one that penalised best practice.

Also contrary to the implication in the motion that the government has somehow walked away from helping farmers is the fact that, in the last year alone, exceptional circumstances assistance was almost $400 million. That included exceptional circumstances relief payments to over 12,000 households and exceptional circumstances interest rate subsidies to over 5,000 businesses.

The exit grants that are the subject of this motion have also been part of that package of assistance measures for eligible farmers in areas still under EC declarations. When additional funding was announced in this budget, it was quite clear that the exit grants program was capped, and was only available until all funding was taken up and no later than 30 June 2012. Consequently, the program was closed when it was fully subscribed. Under any such program, the number of people assisted is determined by the funding envelope, and that number is the same regardless of the time frame over which it is allocated. There is no suggestion that funding to this program has been reduced. It was always that amount of money.

Far from neglecting the needs of farmers, the government has in fact lifted the total funding for exit grants from $9 million to $14 million. All farmers who met the guidelines at time of closure, including having lodged their applications, will be paid. Those who had sold and settled their properties at time of closure but had not lodged an application are being actively assisted with preparing applications by rural financial counsellors, and are being assisted with lodging those applications by the department of agriculture. Any person who believes they have been adversely affected by the closure of the program is entitled to seek a review or appeal, and the government is helping people with act of grace applications.

The member for Mallee asserted in his speech that he had not received a reply to his communication requesting this act of grace process, but in fact the minister wrote a letter to the member for Mallee, signed on 14 November, and even offered very active assistance from his department with act of grace applications.

This government's drought policy review showed the way forward for Australian agriculture, but the opposition pretends that we can meet future challenges with outdated policies. Australian farmers know better than that and they deserve better than that.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

I rise to support the motion moved by the member for Murray and seconded by the member for Mallee. Many farmers only made the hard and very emotionally charged decision to walk away from farming and their whole life up to that point because this program was designed to and did allow them to walk away with some measure of dignity and some idea of where they might go in the future. But instead of helping farmers, as the program was most definitely designed to do, well over a decade ago, the government has just added to their strain and financial stress.

I never cease to be amazed at the ability of this government to stumble over even the most basic government duties and issues—in this case, almost of human rights. In Senate estimates, the statistics provided by the department clearly showed that funding for the exit grants program was going to fall well short of the 12 months if applications and their relative success rate continued at what were then historic levels. Obviously, the Minister for Agriculture, Fisheries and Forestry, Minister Ludwig, knew this, yet he did nothing. The issue at the heart of this problem is not so much that Labor ran out of money as the way they cut off at the knees the farmers that this program was precisely designed to help.

The exit grants guidelines do not provide for the program finishing early, as they require settlement before an application can be lodged. So farmers sold their farms privately or at auction, exchanging contracts and receiving deposits. They then had to wait for the customary two to three months for the settlement date of the contracts before they could apply. These farmers, not through their own fault, did not realise that—while they had made these decisions in good faith, and while many had pre-approval from Centrelink and many had accepted lower than market rates because of eligibility for exit grants—their whole financial future was in such danger. Farmers did not realise that the program that was supposed to last for another 12 months from 1 July until the end of June in this financial year was so dangerously low on funds that, with applications in the system, on the first day the program was extended by 12 months, the funds were already gone.

What warning did Minister Ludwig, the Minister for Agriculture, Fisheries and Forestry, give these farmers? None. He just ruthlessly cut the program on 10 August, stranding those farmers that had sold their farms and had not settled. Not only could these farmers not pull out of the sale of these farms but some had made financial commitments for their future based on program eligibility. Some had put a deposit on a house in town as they strove for a change of life after 10 years of emotionally and financially draining drought only to be totally abandoned by the government after opting to use a program that was designed to help them. This program was designed to help. They made life-reaching decisions on a program that was designed to enable them to do just that. These farmers also missed out on vital retraining grants that were supposed to help them transition to a new life, and that is what happened in Newcastle and Wollongong when they shut down the steel mills. But this did not continue for people who sold their farms in good faith.

Here we have a government that found $100 million to fix up a stuff-up in live exports when the Gillard government unilaterally shut it down without any understanding of the consequences. Now that same government is too mean and too lousy to find the money to help financially stressed and emotionally distraught farmers left out in the cold. In Victoria alone there are reports of at least 30 farmers who have now been left high and dry, missing out on exit grant funds. Some of these farmers have been stranded simply because another government department held up sale finalisation by not issuing the simple approval of water transfers. The Gillard government is downright lousy. The minister either does not care or is too inefficient to go back to his cabinet and sort out the technicalities that excluded the very farmers this program was set up to help. I implore the government to right the wrong and to support the farmers who have been abandoned in this fiasco.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

In this place we have discussed at great length and experienced across the country the pain that was brought as a result of the floods that swept through Queensland and also parts of New South Wales and Victoria. As a nation we responded quite quickly, both in a personal capacity but also through businesses and in particular through government, where we had to take a number of critical measures to help people meet their immediate needs and also to be able to rebuild parts of the country that had been absolutely devastated by flood. By way of contrast for many people, when they cast their minds back a short period of time, there was the disbelief that we could get to a situation where some of the worst floods would hit a few short years after the bulk of the country had been held in the grip of terrible climatic conditions, specifically drought.

Even though I am a city-based MP, I remember how people across the nation had been affected by drought either in their own capacity in cities that were concerned about depleting water supply or by seeing on their TV screens the devastating impact of drought and the way it did require people to make, as the member for Calare mentioned a few moments ago, an emotionally-charged decision to leave something that may have been in their blood for generations, farming, simply because they could no longer make ends meet under the circumstances that mother nature had brought to bear in relation to them. A range of different measures was taken up to assist people—and reflecting on the words of the member for Calare—in making that ‘emotionally-charged’ decision. The Exceptional Circumstances Exit Grants were set up, time-limited, one-off exit assistance for farmers whose farm enterprise was located in an area covered by an EC declaration on or after 1 July 2010—formerly it was 25 September 2007—designed to assist eligible farm families in financial difficulty that chose to re-establish themselves outside farming. The program consisted of a grant of up to $150,000, and it also comprised an advice and retraining grant of up to $10,000 to help in planning for farm exit and relocation of up to $10,000 to pursue new employment opportunities. A condition under the program was that farmers were required to sell their farm enterprise and leave farming. The program was clearly stated to be available until 30 June 2012 or until all funding had been taken up. The program was closed a few months ago, in August 2011, after additional funding was allocated from the original $9.6 million to $14 million, and all farmers who met the guidelines at the time of closure will be paid.

It is important to note that the program was closed when it was fully subscribed so it did not reduce the number of people assisted. But it is also important, particularly given the contributions made by numerous members in here relating stories from their own electorates, that the government has said that any person who believes that they have been adversely affected by the closure of the program is able to seek a review or appeal, and the government is working with individuals to lodge act of grace claims—and that has been remarked upon during the course of this debate—meaning that each case will be considered upon merit.

We have sought as a government to stand by rural and regional Australia through the drought and will continue to do so. And it is important to note that as at 30 September of this year 504 farmers received an EC exit grant since the program commenced under the previous government in 2007, and a number of applications are still being assessed. Obviously, ABARES is forecasting a stronger outlook for 2011-12 with positive crop and export forecasts and some people will be in a position where they can stay. But for people who have had to make that truly wrenching decision to leave the farm, we are, as has already been reflected upon, certainly there to provide assistance to people who feel that they have been unduly and unfairly affected. This debate will certainly prompt further scrutiny and obviously trigger further review as to what can be done to help people in the circumstances.

Debate adjourned.