Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

The Farm Household Support Bill 2014 introduces a new safety payment for struggling farmers in this country. It comes from the intergovernmental agreement secured by the former Labor government, and on that basis I can report that the opposition will be supporting this bill. I note that the bill has a cost to the budget of $99.4 million over four years and further note that something like $37.6 million of that is allocated as administrative costs to the budget. I invite the minister, when he closes this debate, to provide further detail if he can on that administrative charge. I know some of it relates to ICT resourcing and new systems being put in place to administer this particular program, but it is an extraordinary amount of money as a percentage of the total allocation. I invite him to share the reasons for that with the House.

This is definitely a supportable initiative flowing from the intergovernmental agreement. It is the latest iteration of the safety net we have in place for farming businesses and farming families when they run into financial difficulty, whether it be because of drought or for other reasons. I note that this is not just a drought initiative; it is an initiative that will be available to all farming families, regardless of the cause of the circumstances in which they find themselves. The key to this particular initiative is the means testing of that payment, which would of course be far more generous than the means testing for Newstart allowance, or as some would call it the dole, for other potential recipients. That is of course due to the fact that farmers typically have substantial capital assets on their properties which in most cases would deny them the capacity to be eligible for Newstart allowance-- and similarly with income testing. The situation for farmers can be quite different.

Last night, I participated in a discussion at the National Farmers Federation—the topic was drought and the challenges ahead. Senator Richard Colbeck, the Parliamentary Secretary to the Minister for Agriculture, also participated in the debate. Professor Linda Botterill, from the ANU, made the point, as I often have, that farmers in Australia are held in very high regard by the broader community. I see you, Madam Speaker, nodding your head in agreement. As I said to her last night: as I usually put it, farmers are up there with ambos, firemen, policemen and members of the military—unlike politicians, who typically are down there with used car salesmen. And you do not need to do any empirical research to know that, although Professor Botterill was able to back it with some research on this subject last night. So I have no doubt that all Australians will be pleased to hear us debating this particular bill, and to see we are reaching out in acknowledgement of the severity of the current drought and the assistance farming families find themselves in need of. Again, this is not a drought initiative per se, although certainly it has its genesis in the discussion with the states on future drought policy.

As many members of this place would know, we have been struggling with drought policy in this country since Federation, really. Certainly since 1990 there has been a raft of reports on drought policy, each of them voluminous. If you read the latest Productivity Commission report—I think it was from 2008—half of the report reflects on earlier reports on drought. It is a complex and difficult area. I think there is a settled consensus in this country that some sort of safety net is appropriate; I have never seen the matter that is before the House today contested. But there have been many challenges to the various forms of drought policy we have had in the past—whether they are efficient and whether the objectives of drought policy or the programs under that drought policy are consistent with the objectives of the particular drought policy of the day.

Again, this was a matter for debate last night, and I made the point then—and this is always the big challenge with drought policy—that in 2007-08, for example, only 27 per cent of our farmers accessed the old 'exceptional circumstances' regime. That is still a large number, 27 per cent, but it indicates that 'farms ain't farms'. Some farms are more sophisticated than others and bigger than others, and some have made a much greater effort to ready themselves for drought—to drought-proof themselves, if that term is appropriate—and to be well prepared for drought. Others possibly—and often through no fault of their own—have not had the resources to do that and find themselves on marginal land and therefore subject to the vagaries of the weather and certainly more vulnerable to drought than others.

Last night I also made the point that it is quite possibly true that drought policy beyond the safety net will always face that dilemma—that if you assist those who are continually vulnerable to drought you are somehow disadvantaging those who have invested heavily and have innovated and better protected themselves against drought in the future. Those are not my thoughts; they are the thoughts of many who have made submissions to drought policy consideration over many decades. They asked the question, 'Why is it that Joe next door is getting a taxpayer subsidy when I am not getting the subsidy because I have made the effort to drought-proof my farm business?' And it is hard to see any time in the near future when that dilemma will not still be with us. It is a dilemma we should be grappling with in this place on a bipartisan basis, because we cannot be in any way playing politics with this issue, and we need to find innovative ways to help farmers in times of drought. Of course, we cannot necessarily prepare ourselves adequately for some droughts—like one-in-50-year events. In the past we have placed a greater and growing emphasis on drought-proofing rather than on in-drought events, and that is what initiatives like the farm management deposits scheme are all about—providing tax incentives for farmers to put money away in the good times to be used in the bad times, and I suspect that is where much of the focus will be in the future.

There are some academics and others out there who will say that we should not go beyond the farm household support package—that the welfare payment, if I can call it that, is sufficient. I reject that at the same time as I reject some of the old schemes like interest rate subsidies, which I think more often than not encouraged poor behaviour and did nothing to encourage further drought-proofing within farm enterprises. There will be more to be done, and we must do more. But in this place and in the place over the other side we should be working on a bipartisan basis to make sure that we get the right policy—and good policy, not policy that is a compromise between competing political parties seeking to win the hearts and minds of the farming communities, and of course those people in the broader community who are so supportive of farming families.

I hope she will not mind me saying so, but last night Professor Botterill said that politics does play a role here, and sometimes you just cannot secure the best policy—you have to accept the second-best policy because of the nature in which politics does creep into these public policy issues. I rejected that, because she had also mentioned the need to have evidence based policy, and I said, 'I am far more attracted to evidence based policy than I am to second-best policy'. We should never accept second-best policy, and together in this place we should strive to ensure that we have the very best policy, and one that is fiscally responsible but takes into account the special place farmers have in our economy. They are the people who provide our food security; they are the people who put food on our table. They are the people who export two-thirds of everything they grow and therefore make an enormous contribution to our export earning. But, more particularly than all of that, they are people who are exposed to the vagaries of the weather like no other industry in our broad and very diverse economy.

But it is not just about that. It is about how we have a sustainable farming future, and how this country makes the most of the opportunities presented by the growing demand for food in Asia. We often talk about the Asian food bowl, but it is not a phrase I use. I think it is a misnomer. It implies that somehow Australia will play a substantial role in feeding the growing middle classes of Asia. Of course, that can never be the case. We can never produce the volumes necessary to feed a substantial part of that growing Asian middle class. To provide a mere five per cent of the additional food demand predicted by 2050, Australia would have to double its agricultural output by value.

That is still a lot of food though, which is why I prefer to refer to it as the dining boom. As we move on from the mining boom, we enter the dining boom, because a doubling in our output would still be a boom. A doubling of output would be a welcome achievement in this country, but a tripling of output would be even better, and it is not beyond our capability if we are smart about it. However, a tripling of the output will still not equate to a substantial share of the food demand in Asia. We will still be a small player there, but we would experience a boom here. A tripling in our output would be very nice.

The question then becomes: how do we get there? It is going to be hard. I have acknowledged in here before that I think the member for Hume, in an earlier life, was the key author of a report by ANZ bank and Port Jackson Partners, in which they suggested that to achieve our ambitions out to 2050 we will need something like $500 billion of infrastructure investment in this country. It is axiomatic, and clear to all of us here, that if we are going to get anywhere near that level of investment in this country we will need a great deal of foreign investment. That is why I am so disappointed that the government, so early in its life, has sent all the wrong signals to potential foreign investors by rejecting the ADM takeover of GrainCorp.

The former Labor government was investing heavily in one of the key infrastructure issues in this country, and that is the challenge we face getting our grains to export markets—through our rail lines in particular, and then through our ports. We were investing heavily in some of that rail infrastructure back in New South Wales and Western Australia—the key export state, because Western Australia exports about 90 per cent or more of the grains it grows—and that is something we are not seeing any more under this government.

It is true that fiscal rectitude in government is important. Keeping the budget in balance over the cycle is important. But those opposite, as they sneer, seem to constantly forget that only a few years ago we had the biggest global economic downturn since the great depression. We used that cycle responsibly and appropriately. It is all right putting money away in the cookie jar, but if you are under-investing in your critical infrastructure there is no net gain—there is a balance, and I fear this government does not propose to get that balance right. But, we shall see. I may be proven wrong.

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

You will be proven wrong.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Well, I will bet 20 cents I am right. I am not a gambler, so 20 cents will do the job. There is a much bigger issue at hand. The question becomes one of how we can produce twice as much food, or three times as much food, with the same water, land and human resources. How do you do that? Before I attempt to answer that, I will correct what I just asked, and add that it is also a question of how you do it with the same natural resources, when those resources are depleting. There is no doubt that we do face very large challenges in terms of our natural resources, whether it be in relation to salinity, land degradation, or a rapidly changing climate.

This is where it gets very interesting for me, because when I read all of the literature climate change is taken as a given. There does not seem to be any contest out there. There might be arguments about what causes climate change and there might be arguments about what we do about it—whether we should use mitigation or adaptation. But there is no argument that the climate is changing. I told a little story in this place recently about Bruce Tyrrell. I will not repeat it at length, but he pointed out to me that the bees are on his vines much later than usual, and he attributes that to climate change.

So, let us put to one side the debate about whether climate change is induced by human activity, or what we should do to mitigate it. The climate is changing and it is going to continue to change. The science on that is settled, and it is going to be bad news for our agriculture sector. Things are going to get tougher and drier, droughts are going to be more prolonged and will hit us more often. On the other side of the equation we are going to have rain events, and other cyclonic events, that are also going to make life difficult for those who live on our land and produce from it.

This is a serious issue. You cannot run around the country promoting the Asian food bowl concept if you are not serious about action on land resource sustainability. That is why it shocks me that the current government is progressing an agricultural white paper, whose terms of reference make no mention of natural resource sustainability or climate change. They did not have to call it climate change; they could have found another name. I know they do not like admitting that climate change is a problem in this country, but you cannot plan for the countries agricultural future without having a look at the impact of climate change in the future. You cannot plan our output and you cannot even plan infrastructure investment until you know what are the other impacts from changing weather patterns in this country. As I said at the NFF last night—and I know it is not music to the ears of every farmer in this country or every farming representative body—having not been the most enthusiastic supporter of mitigation on this side of the House over my 18 years here, and having not been the most enthusiastic supporter of every initiative taken in the area of climate change, I have always been a signatory to the precautionary principle—that is, if you are in doubt do something about it. Do not wait until it is too late. But that is on the economy more generally.

In this sector it is even more important. It is so clear to me that we will not double output by volume. We will not, certainly, triple output by volume with depleting natural resources—and depleting they are. Again, I have not seen any literature anywhere that contests that idea, and I look forward to hearing members in the other place make a contribution on this bill, because they might like to respond to that and share their thoughts with me.

I am inviting a bipartisan approach to this. Climate change, however you want to interpret it, is a challenge for all of us. I think it is time, like I suggest with the drought policy, we put the weapons down and work out as a parliament how we are going to deal with these challenges. I remind you, Mr Deputy Speaker, that those who sit opposite have the same greenhouse gas emissions reduction target as the Labor Party, the official opposition. It seems that we only have an argument about how we get there on the mitigation front—but, again, mitigation will only be one issue. Adaptation is going to be of critical importance. There were so many adaptation programs, broadly speaking, that were attached to the former, Labor government's response to climate change which now no longer have a funding source. I challenge, in the friendliest of ways, those sitting opposite to tell me how we are going to take up those opportunities that increasing global food demand is presenting for our country, without dealing with some of those climate issues and some of those adaptation issues that will be necessary.

Likewise, I challenge those opposite to tell me and to tell the House how we are going to get additional wheat to market without a significant initiative taken on the supply chain to our export markets. People talk about our proximity to Asia, and we certainly do have an advantage in terms of our proximity to Asia. But in transport cost terms it is an advantage that can be very quickly eroded and, indeed, is being eroded by our inability to compete on the supply chain to the port rather than after our goods leave port. These are issues that will have to be tackled, not just by this government but, again, by people who are looking for some bipartisanship on these issues by this parliament more generally. We will not agree all of the time and, I am sure, we will often disagree, but Australia has a wonderful opportunity here and we should be grabbing hold of it and doing something about it. An agricultural white paper without any reference to climate change will not get us there; a lack of references to sustaining natural resources will not get us there; and a lazy, myopic approach to what we need in terms of infrastructure in this country will not get us there either.

We have the worst of both worlds here on that front—the government is not going to spend any money on infrastructure and it is not going to let foreign investors in to spend their money on infrastructure. That is very disappointing from my perspective, and I am sure it is disappointing from the perspective of many who live off the land and supply us and our export markets with food.

I want to go back to where I began, and that is on the specifics of drought policy. This is a very important safety net again borne out of the intergovernmental agreement when the Labor Party was in government. But I note it was supported by those who sit opposite and, of course, supported by all states of the day. It was a big thing to get rid of the old exceptional circumstances policies. So many farmers had come to rely on them for such a long time. They were very popular amongst many farmers, but all the literature said they should go. All the states agreed that they should go. But we should not, and cannot, stop here. The safety net is important, but we need to find new and innovative ways, not so much to respond during drought but to ensure all those who run farm businesses have access to incentives that ensure that they are better prepared for drought. The alternative to that, of course, will be to say, 'If you are on marginal land, just get off.' Again, going back to our ambitions in Asia, we cannot afford for anyone to get off. We need all the farmers we can get. We need to do all the farming that we can do. But we will need investment. We will need more policies on adaptation in addition to mitigation. Of course, we will also need more on research and development. No matter what we do on adaptation—and they are the one and the same, really—and no matter what we do on infrastructure investment, it just will not be possible to very substantially increase output without more innovation.

Australia farmers and the RDCs and others who support them—our universities and our learning institutions—have been at world's best in these initiatives. But we will have to do much better. We have kept our productivity up in the past and we have increased output in the past through both the use of new fertilisers and the use of additional land, but that is plateauing and we need a new phase, a new round, of innovation. There will not be more land; there might be less land. We will rely very, very heavily on innovation. I welcome the government's commitment on that front to its pre-election promise for an additional $100 million in research and development. I understand that promise will be kept. I will be disappointed and the farming community will be disappointed if it is not, but I am confident it will be. I understand it is to be split amongst the RDCs; so, instead of a dollar-for-dollar basis, the government might pay $1.05 or $1.10 to the RDCs. That is a good thing. Dare I say, at the risk of making a commitment in addition to that—I am certainly not doing that this stage of the political cycle—we will, sadly, need more to produce the sort of innovation we will need to make the most of those opportunities.

Of course, along the way we will have a debate about genetically modified crops. It is a debate we have to have because, I suspect, we will not realise our ambitions without proper management and taking up of opportunities GM crops present for many reasons, whether it be crop protection, our capacity to lift our output et cetera.

Finally, on that point, the dining boom will come best for us if we do not just chase volumes but, more importantly, chase value. Our limited resources will need to be concentrated on those commodities and agricultural interests which produce the greatest possible return for our country. Our farmers do not need that lecture from me; they know that, as do their peak bodies. In working together in this place I believe that, while not building a capacity to substantially feed Asia, we can position ourselves as a country which produces a lot more food than we do now and which sees a much greater return on our produce than we do now.

But we will have to be very smart about it. We are going to have to be more open to foreign investment. We are going to have to be more willing to invest in infrastructure. We are going to have to be more willing to invest in R&D. And of course we are going to have to be more willing to ensure that those who are on marginal land—those people we want to stay in the sector—have the protection they need when severe drought comes, and that in my view means making sure the appropriate incentives are in place that give them the opportunity to do what so many in the industry are doing: preparing themselves as best they can for future drought events. The opposition supports this bill.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I stand in this place today as the daughter of a farmer and in strong support of the Farm Household Support Bill 2014. I understand the trials and tribulations that go with depending on the land for your living. In fact, I remember when growing up they introduced a board game called Squatter, and my father could never bring himself to play it, because he said it was too realistic. Every round of the board you were faced with a drought, a famine, a fire and a flood; and, if you survived that, usually your stud ram died in the last few squares of the game.

As the drought takes hold, farmers have to watch as their cattle slowly starve and their crops turn to dust. You cannot do anything to help them; there is no water to make the grass grow, and buying food for cattle becomes increasingly expensive. There are many who speak up about the isolated incidents of animal cruelty that happen overseas, yet I question where their voices are now when hundreds of thousands of animals are dying slow, painful deaths in our own country.

Assistance to farmers in times of need is a serious matter. I am proud today to stand on this side of the chamber bringing in legislation that will establish the farm household allowance and give some small hope and assistance to Australia farmers. It is the determination of this government to stand by these Australians in the hard times. We cannot work miracles—there are no magic wands—but we do what we need to offer some small support. This new package will assist drought affected farm businesses and farm families in dealing with the immediate financial pressures and improve their capacity to recover when the current drought breaks. The coalition government is introducing measures that will assist farmers and their families with managing during drought and being in a stronger financial and emotional position to effectively recover when the drought ends.

This package includes measures that offer financial, social and mental health support to our farming communities. The drought assistance package will provide $280 million to hundreds of farmers to access five-year concessional loans at a rate of four per cent up to the value of $1 million. It enables farmers to access a fortnightly farm household allowance which is equivalent to the Newstart allowance even if they have total net farm assets of up to $2.5 million on paper. This package will also provide additional money to the Queensland and New South Wales state governments for water related infrastructure rebates as well as $10 million to help reduce the impacts of wild pigs and other pest animals. Another $10.7 million will be provided to help with the delivery of social support services, including access to mental health support in drought affected areas.

As the Prime Minister has stated, the measures in this bill are largely building on existing programs, but the coalition government is making them more responsive to the particular needs of farmers who are hit by drought. The interim farm household allowance will replace the current transitional farm family payment, and payments to new applicants under the interim farm household allowance started back on 3 March 2014. The coalition recognises that most farmers cannot easily access other forms of assistance compared to others in financial hardship. Having a farmer-specific income support payment ensures that these farmers in hardship can access support when they need it most to put food on the table and pay the bills. The new payment provides a more generous asset test than the previous transitional farm family payment, ensuring more families and farmers can receive support in difficult times. Under the new payment farmers will automatically receive a Health Care Card, and these changes are an interim measure until the farm household allowance commences on 1 July 2014. Funding for this measure is uncapped, meaning it will be available to anyone meeting the eligibility criteria.

We often hear in the media about drought affecting farmers, but rarely do we understand what it actually means. The most immediate consequence of drought is a fall in crop production, due to inadequate and poorly distributed rainfall, and the subsequent loss of income. Farmers are then faced with harvests that are too small to both feed their families and fulfil their other commitments. Livestock sales act as a buffer in times of hardship, with farmers divesting of these assets to buy food. The first animals to be sold are usually those which make the least contribution to farm production, such as sheep and goats. However, as the period of drought-induced flood deficit lengthens farmers will have to start selling transport and draft animals as well as breeding stock, which constitutes the basis of the household's wealth.

Farming is a very significant part of our economy and will continue to play a crucial role in our economic future, which is why the coalition government is offering this $324 million dollar drought lifeline to our struggling farmers. The future of farming is vital to the future of Australia. I am proud to support these measures and I commend the bill to the House.

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

Very few times in this House do we see a level of bipartisanship, but this is one issue—standing by people in drought and making sure that they know that the Australian government is listening to them and they are being heard—where this is the case. I thank the member for Hunter for his kind words and also, before me, the member for Ryan for her kind words.

As a farmer myself, one of the things that I used to wonder about was whether anyone in this green chamber in this place called Canberra had an appreciation of what it was to live through a drought. I want to reflect for a little bit as we talk about this issue today about just what it is like. My journey has involved farming through many of the millennium drought years. You think you can make the right choices, and you think you can make wise choices. I know what it is like to have a $90,000 interest bill and to have a wife who is earning $40,000, and because she was earning $40,000 it precluded us from being eligible for drought assistance.

It is pleasing that in this package we have learnt something: we have learnt that you can actually have $80,000 of off-farm income and still receive access to some drought assistance. That is a welcome initiative. It needs to be stated that there are a lot of hardworking partners of farmers who are really battling to put food on the table, and we are really pleased to see that in this initiative they are not precluding themselves from being eligible for farm support.

In a drought, there are times that you always remember. One of those times for us was toward what we thought was going to be the end of a drought. We made a decision that we were going to buy some young stock. It is important at the end of a drought that the stock you have is young because you want to have the best recovery phase. We did; we bought this stock from Tasmania and we brought them over—two days to bring them over on the ship. We had mortgaged ourselves more to afford this. We put the stock on some water—they were quite thirsty; it was hot and it was dry. I went back to my house that night.

That night the stock agent rang up and said, 'I hope that stock arrived safely?' I said, 'Yes, they did'. He said, 'Now you didn't put them on water did you?' And I said, 'Well, they were thirsty, of course I did'. He said, 'No, you know that is the last thing you should do!' As I now know, when they have an empty belly and you put them on some water, they drink the water, they blow up and they die. So here were we at the end of a drought, taking a financial risk only to find out that we may have just blown another $40,000 on stock.

We drove down there that night and there was one dead sheep there and another dead sheep over there. I have to tell you, if you want to see pressure on mental health for a young farmer with a big mortgage who has just taken a risk and it has blown up in his face, that was one of them. I called up my father to bring over some bales of hay. I called my wife on the UHF to come down and they tried to move those stock around the paddock in order to get them to pass that water by moving. We tried our best and, as irony would have it, a dust storm—I know is sounds like the movies, but it is very real in my mind—rolled in. My wife was at one end of the paddock and I could not physically see her. I had dead sheep. We were trying to move sheep, and we were trying to do the right thing. If you want to see something that brings a person to breaking point, that is drought.

What I want to say to the green chamber is that we have people in this place now who have lived it, and in living it you understand it. We have to have that experience right across the Australian spectrum. We must stand by people through drought. It is easy to have the philosophical argument about whether they are on unviable land? Should we be farming there anyway? Is this corporate welfare? Now is not the time for that argument. The time for that discussion is when we are not in drought, when we can sit back with emotion out of the way and discuss how we create a drought-preparedness model. Something that the Australian parliament, in my opinion, has not done effectively yet, and which is the challenge for us. But the time when people are looking at dry dams, trying to make tough decisions about their own future and looking at their children, knowing that they want to pass on that farm to them—knowing that their father or their mother has worked hard to pass it on—those are the times when we should say, 'We stand by you, we believe in what you do, we recognise your contribution to the Australian economy and we are prepared to release some community funds—some tax payer funds—to ensure you have a viable future.'

This drought package is really about that. We have concessional loans; this is not a gift, this is a loan. It is to buy you time to restructure your business; to buy you time, because we know that this is the land of droughts and flooding rains. As sure as it is dry, it will be wet again. Whenever it is wet, it will be dry again. This is to buy them time for when the good times return—and they will return. They did for me, they will for you.

The one thing that is important when you are talking to people who are in drought is to remind them that it will rain again, you will make money again and there is a future for the Australian agricultural industry. Never, never rob people of hope. When people are going through crisis, the one thing they hold onto is hope. You never rob them of that. This is why we can have the discussion about climate change, but the discussion about drought is recognition of seasonal viability. There is a long-term future for you involved in agriculture; there is a long-term future for the northern cattle industry that is getting hit very hard at the moment. This government understands that there is a long-term future, and we will stand by you.

One of the great things in this package is a recognition of mental health. In a previous life I was president of the Victorian Farmers Federation. I used to say to blokes, 'When was the last time you changed the oil in your tractor?' And they would be able to say, 'Well, actually, it has been three months; it has done 470 hours, it is a 500 hours oil change—it is time to do that'. I then used to ask them when their wedding anniversary was, and they usually did not know that. I also used to ask them when the last time was they went and had a health check-up. Farmers are notorious for not getting health check-ups.

Your mental health is just as important as your physical health. I say to the farmers who are doing it tough: 'Please get up early one morning. Get the jobs done you have to do then go see a doctor. Get your physical health and your mental health checked. You are the most important asset on your farm. You need to look after yourself. The best thing you can do for your family is look after your health. Be a little selfish for a change and look after your mental health.'

When I was talking to farmers in those very lean years I would find that the wives would be carrying the burden. The farmer would be full of bravado but the wife would realise that her husband was under pressure. I do not care what they say; they are under more pressure than they think. It is pleasing to see that we have recognised that as a community now. There is no stigma attached to saying you are under pressure and seeking some help. The $10.7 million in this support package for mental health is a very good thing.

Another great thing I see in this package is some water infrastructure. One of the great revolutions of agriculture that no-one talks about is the poly pipe. Being able to take water to stock enables you to drive productivity through different stocking ratios. It is pleasing that in this package there is continued infrastructure investment in water and some small, on-farm packages to help farmers put poly pipes and tanks in.

Whilst I talked about the young stock on my own farm that I try to get at the end of the drought, I have always had a passion in agriculture to ensure that we have young farmers at the end of the drought because young famers drive the greatest productivity. Those under 35 are the best productivity drivers for the country. They are the people we do not want to lose. They usually are the ones who are most in debt. They have taken the financial risk. They have gone out and have grown and endeavoured. They are the ones who lease additional pieces of ground and try something new. We have to make sure we look after them. I hope in this drought package we hit the mark to make sure that young farmers stay there because it is not just for their benefit; this is actually for the country's benefit.

Before the member for Hunter left the chamber he pointed out the mining boom. There are great opportunities in the Asia-Pacific region for the agricultural industry, particularly in mechanised starch products and protein products. When I was in China a number of years ago I talked to a guy who was 30th in charge of China. When you have 1.3 billion people, that is fairly high on the pecking order—Mr Deputy Speaker, even higher than you, relative to the population. I had a discussion with him about the merits of democracy—and I am digressing here—and he told me that if they had democracy they might do what is popular instead of what is right. Maybe he did win the argument in that instance.

In the discussions he made it clear to me that the current consumption of dairy products was 56 grams per child per day. It was the Chinese government's ambition to increase that to 500 grams of dairy product per child per day. In this chamber here people generally have good health. We probably do not have a full appreciation of just what protein in the diet does for the health of children and people. I want to hark back to a little bit of history here. When the Massachusetts colony settled in America, the people who left Britain and first settled in America, within three generations, because they had access to red meat and dairy products, their life expectancy jumped by 20 years. The Chinese know this. They want to give their children protein. We are actually well placed for that. One-third of the world's export milk comes out of Victoria and New Zealand. We are well placed to really hit the Asia-Pacific region and for a change we actually have a freight advantage over our competitors because of our proximity to the markets.

What I want to drive home is that when we go through a drought we must make sure out the other side we have young farmers, who will drive productivity. That productivity is going to drive our export markets. Even in my small, humble electorate we produce $5.3 billion worth of exports every year. If you multiply that right across Australia, the contribution of the agricultural sector is significant. It is also significant for the secondary workforce in marketing, transport, refining and research and development. We have a good industry to be proud of. I think the $320 million drought package is simply an investment in our future. It is saying to the people in drought: 'We stand by you. We understand what it is like to go through drought. We value you. Your contribution is needed as we continue to grow this great economy.'

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

It is a real privilege to speak today on the Farm Household Support Bill 2014 and the Farm Household Support (Consequential and Transitional Provisions) Bill 2014. We have heard from a lot of members of parliament today who represent rural electorates—and of course they have a special interest in this legislation. But I think it is really important that members of parliament who represent in this place big parts of our cities—and I represent an electorate in Melbourne—come forward and say how supportive we are on behalf of our constituents of putting in place this necessary and important support for farmers who are genuinely struggling in a once-in-a-generation drought in this country.

I want to echo the very good words I heard earlier from our shadow spokesperson on agriculture, Joel Fitzgibbon. He indicated that this is an area where we see strong potential for bipartisanship. Labor has done a lot of good work in the area of drought policy, which I will talk a little bit about. Importantly, today Labor is standing here in partnership with those on the other side to say it is important that we support our farmers, and that is what this legislation is trying to do.

I want to talk to some of the specifics of the legislation. This legislation provides a mechanism to implement the farm household allowance. That is up to three years of income support payments or ancillary benefits for farmers and their partners who can demonstrate financial hardship. The FHA is to commence on 1 July 2014. It is set to replace the exceptional circumstances relief payment, which, as you would know, Mr Deputy Speaker Kelly, was available only to regions declared to be in extreme drought. Importantly, the bill acknowledges that the government has implemented the interim farm household allowance and allows for the transfer of existing support scheme recipients. It makes some other changes to various pieces of legislation that essentially bring those things together.

I will speak in a little more detail on the specifics of this legislation, but I wanted to spend a little bit of time talking about why this issue is so important for Labor. It speaks to our genuine commitment to supporting Australia's farmers and farming communities, especially in an hour of need such as we have before us today. The member for Hunter talked about the high regard in which farmers are held in the broader community. Speaking from the city perspective, I can echo that. What I hear from many constituents talking to me about economic changes in Australia is that they want to live in a country that continues to make things. That speaks to some of the importance of our manufacturing industry, but it also talks about primary industries and agriculture. People talk to me about a feeling that comes through of the honesty and integrity of actual production.

We have a very proud history of agriculture in our country. When we look back on our history, we see that this is the foundation stone of Australia's economy. It was where we started to see this exciting spirit of innovation that we have carried right through our economic history in Australia. You can look back to the beginning of the 20th century, to the development of the stump-jump plough, the combine harvester and irrigation. These are all things that have spread and reformed agriculture all over the world. They are things that happened right here in Australia. When people like the member for Chifley and I put our heads together and think about Australia's economic future, what we try to think about is how we can harness that incredible spirit of innovation and bring that to newer sectors on which we will rely more on the future. Innovation has been the watchword.

We have seen an incredible transformation happen to agriculture in this country. Today, farms that would have required hundreds of employees can be run with just a handful of employees. That is great for efficiency, although it does create issues in some of those farming communities. We are well aware of those. The critical point to acknowledge today is that Australia's agricultural industry is one of the most efficient in the entire world, one of the least protected agricultural communities in the entire world. It is really important that Australians understand that this sector has worked through a very difficult transition over the last 20 or 30 years to get to this point. When I talk to the Victorian Farmers Federation and the National Farmers' Federation about reforms like the one that is before us today, what I hear is them saying, 'We have done the hard yards'. They have done the hard yards. The farmers of this country have made some incredibly tough decisions. They have come out the other end with an agriculture sector that we can be incredibly proud of here in our country.

I think there is a consensus that, having done those hard yards, when something really catastrophic happens, particularly like what we see happening in Queensland, city people are happy to support their country cousins with a safety net. The legislation that we are talking about today is putting that into place. When we think about the economic future of our country, it really has yet to seep into the mindset of Australians that agriculture is not an industry of yesterday for us; it is actually an industry of the future. The member for Hunter talked about what he likes to call the 'dining boom'. We know that demand for food in our world is going to double over the next 15 or so years. We cannot double the amount of agricultural land; it is going to mean more efficiency and more productivity on existing agricultural land. Our Australian farmers can really benefit from this. As I said, we have a long history of innovation. We are poised to take this big opportunity in hand.

But what we will need to do is see farmers through some difficult times such as what we are seeing right now, hence the importance of this legislation. We can be part of this very exciting boom that many in this chamber talk about frequently. But we do need to support our farmers to get there, hence this legislation and, of course, Labor's support for it.

I wish to speak a little bit more about the context. I do not know if any the listeners at home or people in the chamber have taken the time to look at the map of Queensland and see the drought affected areas, but it is genuinely terrifying to see, because almost the whole of Queensland has been declared a drought zone. I think what we are seeing now in Queensland is the largest portion of land ever to be declared drought affected. There is just a little thin strip across the eastern coast of Queensland which is declared not drought affected. Scores of shires have been added to the list of drought affected areas of Queensland. I think this is a very specific incident and definitely justifies the legislation before us.

Let me go back to some specifics of the legislation I wanted to touch on. One of the reasons Labor is so supportive of this is that the bill delivers on what was Labor's commitment under the Intergovernmental Agreement on National Drought Program Reform. This was to provide a new nationally agreed approach to drought programs this included time-limited income support payment for farmers and their partners, based on individual need. We are very happy to see that come into the legislation. If we were to quibble at the margins on this one, there is a question here about the timing of the legislation. We have known about drought conditions in parts of Australia for some months now. There is a little disappointment that it took so long to get to this point when it was obvious some months ago what was needed. We would have liked to have seen this bill be introduced much sooner to enable more timely assistance to struggling farm families who really have been in limbo for quite some time.

A second point I would make on this one is that it is focused on the short term. What Labor wants to see is a real, genuine conversation about long-term drought preparations between this parliament and the farming community in Australia and the bodies that represent them. One of the things that has been disappointing is to see that in December 2013, the Abbott government decided to abolish the key COAG vehicle, the Standing Committee on Primary Industries. That body was established just to consider this question of long-term drought management. It is something that both sides of the House should be keen to work on. Last year, the Commonwealth government and the states agreed through that committee to transition away from the exceptional circumstances program and towards a policy that promoted greater drought planning and preparedness. Unfortunately, despite some rhetoric about interest in long-term drought reform from the other side of the House, we have seen a government that has run for six months now with no real progress on that front. I know the National Farmers' Federation are talking about things we can do to help our farmers in the longer term and we are very committed on this side to see that work progress. So we will continue to hold the government to account and to speak to the other side about how we can progress long-term drought policy.

I might close with a bit more of a sense of the personal on this one. I am very fortunate to have married into a family of dairy farmers in northern Victoria. They are a part of a wonderful dairy community in our little town called Gunbower. Having a city background and then being exposed to this set of small communities in northern Victoria, I know it is really hard to understand, unless you experience it day to day, how tough things can be for farmers in a period of drought. What a lot of Australians who live in our cities do not realise is that, when a community falls on tough times, it affects not just farming families; everyone is affected. All small businesses are affected and everyone just goes into a deep struggle.

Something else we probably do not realise, aside from the widespread effect of things like serious drought, is just how tough things really get for our farmers. Being a part of this big farming family, I know people genuinely struggle to put food on the table. That is not hyperbole; it is real. I know that the people of Hotham do not want to live in a country where we have significant portions of our population who are working doing backbreaking labour day in, day out and still cannot feed their families. I see this package of legislation as my community standing beside fellow Australians, both in good times and in bad. I am very pleased to join the voices in the parliament who are supporting this package.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

May I at the outset commend the member for Hotham for her generous and heartfelt words and for her support for this very important legislation, the Farm Household Support Bill 2014 and the Farm Household Support (Consequential and Transitional Provisions) Bill 2014. I might add that her predecessor, Simon Crean, was also very interested in regional Australia. I had a lot of time for Simon Crean, as the member for Hotham, for the role he played in regional Australia. I hope that his successor follows in his footsteps by also playing a good productive role in regional Australia. We certainly welcome the points the member for Hotham just made.

However, I must take issue with some of the things said by her colleague Mr Fitzgibbon, the member for Hunter and shadow agriculture minister. He downplayed the ability of Australian farmers to support the Asian century by being a food bowl for the Pacific rim, supplying the growing and burgeoning markets in Asia. By 2050, the world's population will reach nine billion, if not more. Certainly Joel Fitzgibbon mentioned that, but he said he thought that the Asian food bowl was a misnomer. He thought that we would not be able to produce the volume and, in his words, 'double the output' to support the growing protein need of the Asian middle class, but we would if we had the right policy settings.

The coalition are doing everything we can to provide those policy settings. We went to the last election with a plan to develop a strong five-pillar economy of which agriculture was very much one of the most prominent parts. In the last parliament, the 43rd Parliament, we saw an attack on agriculture, an attack on our farmers by the Labor government. We saw the live cattle export fiasco and the slowness to react to the Asian bee incursion, but the very worst was what Labor did, in cahoots with the Greens, with the Murray-Darling Basin Plan.

I probably spoke on water more than anyone else in the last parliament. Perhaps I harped on it but it is important. As Samuel McCaughey, the founder of Australian irrigation, certainly the founder of Riverina irrigation, stated, 'Water is a more important and valuable resource than gold.' He recognised the need for water and he pioneered the irrigation channels which now flow throughout the Riverina providing wonderful fresh food and fibre for the growing Asian market and feeding and clothing our own nation. Sir Samuel McCaughey's words should never be forgotten, certainly not in this place where we set policy hopefully to help our farmers and our irrigators. That is what these bills seek to do.

At an international food summit speech, former Prime Minister Julia Gillard raised the question: could Australia become the new food bowl of Asia? She certainly thought the answer was yes. She revealed to the crowd her vision for the country to become a global superpower, to meet the needs of a rapidly emerging Asian population. It would involve building our food processing industries so that they can supply Asia's growing consumer markets and developing research technologies and logistics to strengthen irrigation. I repeat: the former Prime Minister said strengthen irrigation, grow higher yielding crops and improve food safety. Her remarks angered leaders in the agriculture and the food-processing sectors who argued that the federal government's policies did not align with that idea—and they were certainly right.

Victorian Farmers Federation President Peter Tuohey said that the looming carbon tax and the Murray-Darling Basin Authority were expected to have disastrous effects on agricultural people—growers and farmers in Australia—and he was certainly right. He said that the current MDBA plan will remove 30 per cent to 35 per cent of water from irrigators who produce more than 40 per cent of Australia's food. We know that the carbon tax continues to be a huge impost on our farmers, on the people who grow the food to feed our nation. It certainly rings true today. Julia Gillard was right and her own party should have put in the policy settings to enable what she then perceived to become a reality.

The Murray-Darling Basin Plan was a disaster. Fortunately, New South Wales has just come on board. They held out for a better deal, wisely so, so that they could get the sorts of policy settings from a government that actually cares about irrigation farmers—that is, the coalition—to make sure that New South Wales got the very best deal. The parliamentary secretary, Senator Simon Birmingham, whose portfolio area includes water, came out and allocated an additional 10 gigalitres of environmental flows to the Gwydir Valley for productive use. If there had been bipartisan support—as there is with the Farm Household Support Bill—for irrigation, as Labor claims there now is, why did Senator Birmingham's idea get attacked in January when he allocated that additional 10 gigalitres of water? It is because Labor says one thing but then does another.

I am very pleased to support this bill today. The Farm Household Support Bill 2014, in conjunction with the Farm Household Support (Consequential and Transitional Provisions) Bill 2014, serves to repeal the existing Farm Support Act 1992. It provides a farm household allowance and transitional farm support payments—the interim FHA—from 3 March 2014 to farming families in need, and there are many of them. The government recognises that the Farm Support Act 1992, which this bill repeals, has been an important mechanism by which successive governments have delivered much-needed assistance to Australian farming families for more than two decades. However, we equally acknowledge that we need to reform the way assistance is delivered to the farming sector if we want farmers to have a viable future. That is what this bill does and that is what Australia needs.

Governments of all persuasions have historically valued Australia's agricultural sector highly. We accept that the assistance that we give to our farmers is a special type of assistance and is given in recognition of the very unique circumstances in which they live and work. As the famous slogan goes, every family needs a farmer. It is true. Every family, every community and every nation needs a farmer. The agricultural sector delivers significant economic benefits to communities in many parts—I would say all parts—of our country and indeed to the country as a whole. As the Minister for Agriculture pointed out, Australian agricultural exports reached $38 billion last year. That equated to 13.8 per cent of all Australian exports. The gross value add of agricultural production was some $47 billion. In my electorate of Riverina the gross value of agricultural production came to $1.8 billion in 2010, which equated to 16 per cent of the New South Wales total. It is no wonder that people call the Riverina the food bowl of the state. I would say that it is the best food bowl of Australia. Agriculture is our single largest industry, providing 7,900 jobs or 12 per cent of the total employment, which is the highest of all sectors. There are 4.4 million hectares of productive farming in the Riverina region—2.5 million hectares of grazing land, a further 1.5 used for cropping and the rest either in forestry or set aside for conservation. The Riverina has a diverse variety of agricultural products from wheat to beef, rice, barley, dairy and cotton. The Riverina produces the largest output of potatoes, almonds, oranges and apples of any region in New South Wales. We are also the largest producer of wine grapes and wine in New South Wales. Agriculture is therefore a strategically vital industry not just for the state and for the nation but also for my own electorate. I know that the member for Parkes, who is sitting in the chamber, would certainly agree with the role that the Riverina plays. I know the role that his electorate also plays—it is the biggest electorate in the state and certainly a key player in the agricultural sector. Agriculture is a critical industry in the Riverina and I am committed to supporting it. I know that the member for Parkes is also an avid supporter of everything agriculture based, in both good times and bad.

While we are fortunate that the drought has not yet had the impact in the Riverina that it certainly has had in Mark Coulton's electorate, there are certainly areas within my electorate that are beginning to feel the effects of drought. Places in the north-west of my electorate—in the Bland Shire, in the Carrathool Shire and in places such as West Wyalong, Ungarie and Rankins Springs—are experiencing drought-like conditions. It is very dry. I am proud to be able to support measures such as this which will directly benefit those in my electorate who need assistance now and may well need it into the future. As the Prime Minister highlighted recently on his national drought tour, Australia is currently in the midst of a severe and prolonged drought—a once-in-a-century drought for some areas. Last year alone, more than 150 temperature records were broken across the country. It was the hottest year on record according to the Bureau of Meteorology's recent report, State of the climate 2014. Projections from both the Commonwealth Scientific and Industrial Research Organisation and the weather bureau suggest we will continue to experience higher temperatures into the future. It would be prudent, given those projections, that we prepare ourselves for a future where we are at higher risk of drought. To that end, I would say we need to be prepared for this—we need to build more dams. I said it in my inaugural speech, I will say it again and I will say it in my valedictory speech—hopefully by then we will have built a few more dams—we certainly need more water storage.

The income support this bill will introduce is part of a comprehensive package of drought assistance measures the Prime Minister and Minister for Agriculture announced on 28 February. This bill, and indeed the entire drought assistance package, is the result of significant work by this government to deliver a credible and sustainable support mechanism for farming households and farm businesses facing the impacts of drought. The government's full suite of policies is appropriately and unashamedly focused on building community resilience and drought preparedness as we move away from the sometimes ad-hoc and crisis-response nature of successive drought policies in years gone by, particularly over the past six years.

The Farm Household Support Bill 2014 provides for up to three years of income support to farmers and their partners affected by drought anywhere in Australia subject to eligibility criteria. Importantly, the income support provided for in this bill is not contingent on a climatic trigger, such as an Exceptional Circumstances drought declaration, which is required to access an Exceptional Circumstances Relief Payment under the existing act. To be eligible for the FHA, applicants must meet a revised means test which provides for a higher asset threshold than normal, taking into account the value of property and other capital which farm businesses hold but which is not sufficiently illiquid or productive due to the drought. This brings the FHA in line with other forms of social security assistance so that we are supporting individuals and families who are facing similar hardships in earning an income.

Subject to eligibility criteria, and in line with other social security payments, receipt of the FHA confers a range of further ancillary benefits to recipient families including a health care card, a telephone allowance, a remote area allowance, a clean energy supplement—the carbon tax compo—and rent assistance. Receipt of FHA will in some instances also qualify young people, most importantly, to meet the parental means test for youth allowance, which is vital for many of our regional youth who are forced to relocate to pursue higher education and vocational training opportunities. This is a sector of people who were forgotten under Labor. Importantly, it is now a requirement that people undertake a financial improvement agreement and have a farm finance assessment carried out in order to qualify for the FHA. Neither of these processes is intended to be one size fits all, and both are equally important in assisting recipients to determine their own futures.

Implicit in this policy is an acknowledgment that not all farm households will stay involved in farming either during or following periods of drought—that is a reality—but the best thing government can do is to support these households to make the best decision for them in their circumstances. There is provision for a $3,000 payment, known as an activity supplement, to assist people to retrain, seek advice or engage in another approved activity consistent with their financial improvement agreement. Under this approach, there are still obligations placed on allowance recipients. However, more significantly, as a government we want to support recipients in meaningful and practical ways as they transition through this period of uncertainty in their lives.

While the FHA will be demand driven, the cost of this income support measure is expected to be in the order of $99.4 million over three years in both administered and program expenses. Certainly, the farm household allowance is an important component of the government's drought assistance package, but every part of the government's additional $320 million commitment is necessary in assisting communities through periods of drought. Income support alone, no matter how well designed, is not enough to get our communities through the drought. That is why the other measures are so important. These include the $280 million in concessional loans, $12 million for water infrastructure, $10 million for pest management and $10.7 million for social and mental health services. As the member for Mallee pointed out, social and mental health services are so crucial.

I digress for a moment to point out that this Saturday at the Coolamon Sport and Recreation Club there is a family fun day for those people who are suffering the effects of mental pressure. Its purpose is to ease the burden on those people through getting together and talking about all things rural related and having a good time. I certainly would recommend anybody in the vicinity of Coolamon to attend and avail themselves of the opportunities there. In conclusion, I support this bill.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

I rise today to speak on the Farm Household Support Bill 2014 and the Farm Household Support (Consequential and Transitional Provisions) Bill 2014. This bill is very close to my heart and it is very important to the people I represent. Indeed, the Parkes electorate has been the epicentre of this current drought. In particular, the three shires along the Queensland border—Bourke, Brewarrina and Walgett—and the western end of the Moree Shire and the northern end of the Coonamble Shire have been dry for a very long time. To put it into context, in a normal season the Walgett Shire produces a million tonnes of wheat. Last year, they produced none. The sad reality is that this drought is not over. Indeed, with no subsoil moisture and the window for planting winter crops only a matter of months away, circumstances look incredibly dire for the next 12 months.

I acknowledge the Prime Minister's support for this bill. I also acknowledge the very good work by my colleague the Minister for Agriculture, Barnaby Joyce. While this drought affects a large area, in the overall scheme of things it does not affect a large number of people. However, through the work of Barnaby Joyce, this drought became known right across the nation. I acknowledge the work that he did in bringing the plight of the people I represent onto the national stage. The Prime Minister visited Bourke, stood in a paddock completely denuded of grass and recognised that we were actually witnessing a natural disaster, and I believe that was very beneficial. The fact that he ended up getting 70 millimetres of rain on top of him before he left was an added benefit. While that was a wonderful start for the area around Bourke, I was out there last week and it is still very dry elsewhere—particularly in the Walgett-Collarenebri area, but right across into the slopes back towards Moree and Warialda. So we are in the middle of a very dry time and we have not seen the end of it yet.

This package has several components. Indeed, the interim farm household allowance will give people who are in very desperate circumstances access to funds to pay immediate household bills and put food on the table. So, regardless of whatever else they are battling in their daily lives, they will know that they have money to feed their families and pay essential bills. I also acknowledge that some of the guidelines for receiving that support have been changed in this bill. I very much welcome that. This will allow more people to access these funds, as some of the people who were excluded under the previous system will now be included.

Another component of the package is the concessional loans, with $280 million available to people at a reduced interest rate. That will give farmers access to funds to continue buying fodder for their stock and to pay immediate farm bills. This is not going to cure the ills of the drought and it is certainly not going to completely take the pressure off farmers. As they look forward, with mounting debts and no end in sight, it is, and will remain, a very stressful time. These concessional loans will act as a circuit breaker, allowing farmers to access some funds and maybe offset some of the long-term debt they have with the banks. These concessional loans may allow them to get some interest relief and free up a bit of cash for farm expenditure.

The water related infrastructure fund is also a very crucial part of that. I am rapidly coming to the end of my time to speak now but, hopefully, when I am able to conclude this presentation I will be able to expand on the need for the water infrastructure fund and the fact that water is—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

( ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The member will have leave to continue his remarks when the debate is resumed.