David Littleproud (Maranoa, National Party, Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

On behalf of the Minister for Agriculture, I present the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019.

Our farmers are key to achieving our ambition of a $100 billion agricultural industry by 2030.

Australia has a world-class agricultural industry.

But increases in the quality and quantity of our agricultural production largely depend on good seasonal conditions in our rural areas.

There are farmers and their communities that are doing it tough right now.

By keeping the economy strong, the government can support our agricultural industries to combat, recover from and prepare for drought.

There are times, like now, when persistent widespread drought conditions impact on primary production and the livelihoods of our farmers and their families. These are challenging times for many in the bush.

Supporting farmers is the Australian government's most urgent priority.

This government recognises that farming is a long game. Support in times of hardship is part of what is needed to help farmers and their communities through these difficult times. That's why the Farm Household Allowance (FHA) was created—with strong bipartisan support.

Multiple reviews recommended creating a payment that would respond to individual need. When a farmer can't pay their creditors and suppliers, it's academic about the cause of the cash-flow issues. What matters is they can't put food on their own table. That's ironic, because they are putting food on everyone else's table and clothes on their back.

Since the introduction of the FHA in 2014, over $365 million in fortnightly payments have been made to almost 12,700 farmers and their partners.

FHA is not a drought measure. It helps farmers facing financial hardship, which does not need to be caused by drought conditions. However, many of the farmers who access FHA do so because of drought.

The program gives income support to eligible farmers and their families to pay for basic household necessities while they make decisions about the future of their farm business and take action to improve their circumstances.

It also provides thousands of dollars to help with professional financial assessment of the farm business and for activities and services that maximise the chance of recipients better managing their business.

During its operation, the Australian government has made a number of changes to ensure that allowances meet the needs of Australian farming families.

The Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 is another vital step in the coalition's commitment to supporting farmers in challenging climatic conditions.

The bill aligns with the government's three-point drought plan: immediate action for farmers, support for the wider communities affected, and longer-term resilience and planning. Our plan will continue to help farmers to get through their immediate problems and to prepare for the future.

This bill is the first piece of legislation to support implementation of the recommendations by the review Rebuilding the FHA: a better way forward for supporting farmers in financial hardship.

The new arrangements outlined in this bill will allow more people to be able to claim FHA. The bill will allow farm business losses of up to $100,000 to be deducted from their other income. This means that the true net position of the farm business will form the basis of establishing their need.

The bottom line is that through this amendment we will be able to reach more famers in need.

This bill also means that, for the first time, farmers generating income from agistment can offset those gains against either the farm loss or the loss of another related business. This recognises that many farms have multiple arms to their operation. They are pretty clever at making money when there's money to be made. In addition to running the farm business they often have contracting businesses, like harvesting or spraying, or earn money by value-adding to their produce.

The bill will also enable farmers and their partners to receive FHA for four in every 10 years.

This acknowledges that farmers may experience more than one period of hardship in their lifetime, often due to cyclical and unpredictable impacts to agricultural production in Australia. These changes will better reflect the real financial position of our farmers.

As you'd expect, we are counting the first 10 years from 1 July 2014, when FHA was launched. The first 10-year anniversary falls due on 1 July 2024. After that time, farmers and their partners who face tough times again can have the breathing space to address the drivers of business shock and make the big decisions about their future.

Finally, in recognition of the extending severe drought conditions, this bill provides for a relief payment for those farmers who have or will exhaust their four years of payment up until 30 June 2020. Each couple that has come to the end of their four-year payment period will be given a drought relief payment of $13,000 and for singles this drought relief payment will be $7,500. That's the equivalent of six months FHA payment.

Some FHA recipients have done everything they can to respond to their circumstances. Many have continued to face severe drought conditions. Nothing any of us can do will make it rain but we can ease this transition off payment. This creates more space for those people to take the time they need to decide what their long-term future holds.

FHA is about taking stock. Farmers are exposed to lots of risk that they can't control. Good planning is essential to get through difficult times. If they continue farming and face another tough period, they can access FHA again from 1 July 2024.

The FHA program has always been designed to help farmers assess their position, to look at succession or decide to sell-up. The program has a suite of measures designed to assist them look at these options. This includes up to $1,500 for a professional financial assessment of the business. The person chooses who does that assessment—their own trusted adviser. This comprehensive look at the farmer's bottom line informs their approach to maximising the opportunity of being on payment.

But we don't leave it there. We don't pay for the road map and leave them to it—hoping they'll make decisions that are right for them. We make up to $4,000 available to each recipient to pay for advice and training—either on or off farm. Recently we've approved people undertaking courses to maximise farm production, improved financial administration, additional training for occupational therapy, and food safety handling and assessment. All this is supported by one-on-one case support from the Department of Human Services and also agribusiness expertise from the Rural Financial Counselling Service.

There's more that we are doing. The government has already announced its plan for a radical simplification to make the FHA easier for farmers to access payments and better support their families. The measures in this bill are just the first instalment of the changes required to simplify the FHA.

We are also improving claim procedures for farmers and their partners, cutting unnecessary red tape. Farmers and their partners will soon be able to apply for FHA using just one application. Removing duplication in the application process will mean more time for farmers and their partners to manage their farm and to look after livestock.

Supporting drought affected communities remains the government's most urgent priority.

I commend the bill to the House.

Debate adjourned.