Rick Wilson (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Farmhouse Household Support Amendment (Debt Waiver) Bill 2021. I see this bill as particularly important to people across my electorate and also the electorate of Grey—and it's good to see the member for Grey here, and the member for Durack—where we represent the vast farming communities and an agricultural sector which has really propelled the economic recovery that we've seen since mid last year following the COVID shutdowns.

This particular bill is one of the final elements of the radical simplification of the farm household allowance, which is a result of the 2018 independent farmer-led review. As we all know, farm income is volatile and based on uncertain yields, prices and of course the factor of the weather that we can never predict. Under the previous arrangements, farmers were asked to make predictions about their farm household income for the year ahead, which, as we all know, is particularly difficult. And when farmers acting in good faith got this wrong, the business income reconciliation process would make them liable for a debt. This bill is now addressing historical business income reconciliation debts, and will give relief to up to 5,300 farmers. It will also maintain the farm household support as a time-limited payment, with farmers and their partners eligible to receive the allowance for four years in every 10. The farm household allowance will continue to put money on the table when times are tough, allowing farmers to consider the right course of action for their business.

Before I came to this place, I was a farmer for 25 years in a wonderful farming area, Katanning, in Great Southern in Western Australia. We would reliably get 450 millimetres of rainfall annually, but, even given that, we experienced the highs and lows of seasons and prices. It is difficult for people to deal with those ups and downs, particularly when they are under extreme financial pressure, and that is what the farm household support program does. It gives people in that situation the dignity of being able to put food on the table, feed their families and keep their businesses operating until things improve, as they often do—although, unfortunately for some, the seasons don't turn around in time for them to save their farm businesses. This is important support the government provides to the farming community, and I certainly commend the changes that have been made here.

I want to talk more broadly about farming practices and how the farming sector has adapted, particularly in the south-west of Western Australia, where the climate has dried somewhere between 30 per cent and 40 per cent since the 1960s. I will note that the driest decade in my district happened between 1890 and 1900, as per the post office records. The average was about 375 millimetres of rain for that decade. We then saw a rapid increase through to 1960, where we averaged 550 millimetres of rain for that particular decade. Average rainfall figures have fallen since those peaks; they are now around 425 millimetres for the last decade. The member for Grey, who is in the chamber, is a farmer, so he will be aware that these weather cycles change. We don't understand the weather or the climate, I don't believe, at this particular point in time. We don't know why that increase in rainfall between 1900 and the 1960s occurred, and I'm not sure that we understand why there has been a diminution of rainfall over the last 40 years.

Regardless of that, we've had to adapt. The farming system across my region in the Great Southern, and of course across Australia, has had to adapt to changing climates, be they in the shorter term, a five- or 10- year horizon, or over the longer term, a 50- to 100-year horizon. I take my hat off to the farming community for the way they've adapted. The most critical adaptation or change in farming systems, which has been adapted worldwide, began in the south-west of Western Australia. A good friend of mine Ray Harrington developed the no-till farming system. Ray Harrington has been recognised for his work, with an Edison science award in New York—one of the most prestigious science awards that can be granted. It recognised what was a generational change in farming systems. When I first went farming in the mid-1980s, we used to cultivate the country. We used to work it up, we used to work it back, and then we would sow it. That process, over a medium-sized farming program, might take a month to six weeks. In the process of doing that, every time we turned the soil, the wind would evaporate what moisture might be in the soil. Our sowing date, instead of sowing in early May when the first rains came, we would be sowing in early to mid-June when the growing season was already four to six weeks into it.

Crop-growing farms in my area, in my state and, I think it would be fair to say, across the nation have evolved. It is now this no-till or one-pass farming system. That effectively means that, with the use of the chemical glyphosate—I'll come back to glyphosate and the importance of glyphosate in the system. By killing the weeds chemically and sowing the crop on the first rains, what we're seeing is less soil erosion, less fuel being used in this cultivation process and much greater yields from the available rainfall, because we're not wasting it, we're not wasting growing-season time and we're not wasting the moisture being evaporated as we cultivate and pulverise the soil and dry it out. So this particular innovation created by a farmer in my electorate, at West Arthur, or Darkan, has been revolutionary and it has really changed the landscape for farmers dealing with a drying climate, dealing with drought.

Of course we see these crippling droughts on the east coast where it simply doesn't rain. In Western Australia we don't have drought to that extent, although 20 shires across my electorate were drought declared in the most recent round, under the definition of less than 50 per cent annual mean rainfall over the previous 18 months. Twenty out of my 38 shires were drought declared, and I know that many in the member for Durack's and the member for Grey's electorate were as well. That recognised that serious drop-off in rainfall, but Western Australia still produced a reasonably good crop of around 9.8 million tonnes, which is actually above the long-term average, despite the fact that many of our shires were seriously drought declared.

Within that cohort of farmers who produced an average or slightly above average crop, there were many who were suffering severe financial stress. Of course, the financial stress is only one part of drought and low rainfall. The other part is the issue and the mental challenges of continually feeding and watering livestock. Carting water for livestock is a really soul-destroying job. You do it every day to give the livestock a drink, but you know you will have to do it tomorrow and the next day, and it's not actually making you any money or increasing your production; you're just keeping that stock alive, keeping them ticking along until it finally does rain. When you look at the weather forecast at the end of March and they're saying there's nothing in sight for months ahead, it's really soul destroying; it's really difficult for farmers to keep going under those circumstance. That's why for those farmers who are in financial difficulty and having to deal with these other issues it's so important that this farm household support program continues. It supports those farmers and provides them with the dignity of being able to support their families and keep food on the table. Many of them, when the seasons turn around—I've got to say I don't think I've ever seen a season as good as the one we're currently having in Western Australia. We have come off two or three pretty tough years, but this season we've seen general rains across the Western Australia Wheatbelt. I don't think there's an area, including right up in the northern Wheatbelt in the member for Durack's electorate, that hasn't received great rains—although that also came with a cyclone, which has caused a lot of difficulty for those farmers around Northampton through to the Kalbarri area. I really feel for those people. I know the member for Durack has been up there providing support and I think perhaps even the Prime Minister visited that area to provide support for those people.

The rains across Western Australia this year have been exceptional. There are predictions—and it's still early days; we are in the middle of June. There were times previously when we'd only just finished seeding the crop in mid to late June. This year, the crops are knee-high already, and the prediction of a 20 million tonne crop for Western Australia I think, if anything, is a little bit conservative. I've never seen a season where the rainfall has been so general and widespread in every area right across the eastern Wheatbelt, which is, once again, part of the member for Durack's electorate. It's been getting terrific rains. I'm hearing some complaints from farmers about getting bogged, and I say, 'Well, that's not a bad problem to have.' It's frustrating, and I've been in that situation—where you're looking at a machine that's up to its axles in mud, and you think, 'How am I ever going to get that out?' It is frustrating, but, as the expression around our area goes, there's more money in mud than in dust.

It's been a terrific season across the Wheatbelt of WA this year, and I look forward to some terrific results. There will still be some challenges. We've got a good early start, but that does not in itself make a great season. We need some finishing rains. We need to dodge the frosts, which can often lead to some crippling financial losses for individual properties, if a particular crop is flowering at a particular time when we receive a frost. That has happened to our farming business on many occasions. It's pretty tough to get up one morning in early October and see that 50 per cent of your income for the year just disappeared overnight due to a frost. So we've got a long way to go, but Western Australia is certainly on target for a great season and, from what I'm reading, I understand that the east coast is having some great rains and looking at a great season. I'm not a hundred per cent sure about South Australia, but, hopefully, some of the rains that are coming through WA are getting into South Australia.

The Farm Household Support Amendment (Debt Waiver) Bill is about writing off the debts for those 5,120 farmers who incurred a debt because they estimated their income for the coming year at a lower level than it eventually ended up being. They've ended up with a debt because, in good faith, they had estimated that they would require that funding. This bill writes off that debt and gives those farmers some breathing space. Hopefully, with the good season we're seeing this year, they'll get back on their feet and will get up and away again and won't require the support next time around.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

I too rise to speak on the Farm Household Support Amendment (Debt Waiver) Bill 2021. As we've heard, in relation to the farm household assistance program, which provides time-limited, means-tested income support to farmers and their partners experiencing financial hardship, this bill outlines the criteria for debt waiver for people who have overestimated or underestimated their income during the period of assessment. Farmers are eligible for the farm household assistance program for a maximum of four years, recorded as a 1,460 day clock, in every 10-year period. These days do not need to be consecutive and can be taken only if, and when, needed.

Previously, farm household assistance recipients' income estimate was reconciled annually through the business income reconciliation, and that determined whether a recipient received a top-up payment or no adjustment or had incurred a debt. This was removed from the act with effect from 1 July 2020 as part of a process to simplify farm household assistance following a 2018 independent review. While this business income reconciliation was removed in 2020, some farm household assistance recipients incurred debts from this process between 1 July 2015 and 30 June 2020 or have not yet been assessed. This bill will waive certain classes of debts, and I'm sure that will be an enormous relief to those people who have had this hanging over their heads for some time. This will certainly assist farmers suffering financial hardship and eliminate the negative effects of the BIR process.

Whilst this will assist farmers, there is far more that the government should be doing. You don't have to look far today to see that the National Party, who are meant to be the party for farmers and who are meant to be looking after the country's farmers, have been a bit distracted and are not doing anything about the mice plague because they've had leadership issues happening. What we've been seeing, unfortunately, is a government that is so focused on itself, so focused on its internals and so focused on the politics that it is not actually helping people. When it comes to our farmers, it's hard to imagine anything more devastating than the plague of mice we're seeing across New South Wales. It's in huge proportions and, for farmers, it's absolutely devastating. It needs federal government action, but Senate estimates last month revealed that the Morrison government had no plan for a national response to this plague at all.

Labor has written to the Minister for Agriculture, Drought and Emergency Management—presumably he is still the minister for agriculture and will not change portfolios, but who will know?—calling for a national response to this growing crisis, which is costing farmers millions and hurting regional communities. This week it was revealed that the Nationals New South Wales minister for agriculture had also called for a federal response. It is beyond the capacity of the state of New South Wales to deal with, and it needs national assistance. The Morrison government needs to listen to the growing caucus of voices calling for a national response to the horrific mouse plague. They really need to do this now. But, as I said, unfortunately, when we've had an obviously distracted National Party not standing up for the interests of farmers, you can see what's been let go.

All year the government has criticised the states, but as soon as they ask for help this government just says, 'Well, it's not our problem.' We saw it over COVID and now we're seeing it with mice. In the next meeting of federal, state and territory agricultural ministers they need to have dealing with this plague on the top of their agenda. It's time for the minister for agriculture to show some leadership—perhaps that's somewhat ironic today—and help farmers facing this plague. Last week the former Acting Prime Minister outlined his solution to the mouse plague when he claimed that the best way of doing that was to perhaps rehome mice into cities. He said:

They should be rehomed into their inner-city apartments so that they can nibble away at their food and their feet at night and scratch their children at night.

That is a disgraceful response from the former Acting Prime Minister, who refused to lift a finger to help communities in need. Let's see if the new leader of the National Party is going to be any different. The absent Prime Minister doesn't hold a hose, the then Acting Prime Minister doesn't set a mouse trap. Instead of letting the mice scratch children in the cities or the region, how about we try to eradicate them? How about the federal government does its job and assists farmers in ending this plague?

The reason I really wanted to speak on this bill is I particularly want to speak about an issue that is deeply affecting the farmers in my constituency, and particularly the magnificent potato farmers that are on some of the most productive, beautiful land that Victoria has and are producing spuds around Newlyn, Dean, Mount Prospect and areas in that community. It has rich, beautiful, volcanic soil, and we've been producing potatoes out of that region for almost five generations in the well over 100 years that families have farmed in that area. My home is very lucky to have avoided some of the challenges of drought and other issues of late that have beleaguered some of our other states, but it doesn't mean that we don't have issues. I'll talk in a separate forum about some of the horrendous storm damage we've had across our community, including across some of our potato farming communities. But today I particularly want to talk about a project that is really hitting home, and that's the Western Victoria Transmission Network Project and what that's doing to farmers in our community.

The transmission lines are to stretch about 120 kilometres from Melbourne's west to north of Creswick before carrying on to Bulgana. They're pretty big, with towers that are going to be the height of the MCG. They're not normal powerlines but are designed to carry far heavier voltage, and they're substantial. They're huge and are going to cut through residential growth areas. But particularly I want to draw the House's attention to their cutting through some of the most productive land in this country. One of the problems that we've seen with the way in which this project has been undertaken is that there has been no assessment or understanding of the value of horticultural land to this country and the impact of putting industrial sized powerlines across this productive land. In particular, there is the issue of the new terminal station. This is not a small terminal station; this is a substantial piece of infrastructure. Some have said it will be about 12 MCGs in size, taking up substantial acreage. You would think, if you're building a terminal station, that you would look to build it on industrial land or industrial zoned land; it is an industrial project. But, no, AusNet, who've won the tender for this project from the Australian Energy Market Operator, have decided that they're going to put this terminal station right smack in the middle of some of the most productive horticultural land in the country.

They're putting a terminal station in the middle of Mount Prospect. There is no industrial zoned land anywhere near this. It is right in the middle of farmland, where we grow potatoes for McCain and farmers have been growing potatoes for over 100 years. It is beautiful soil. It is not marginal farming country. It is not farming country that is being grazed. I understand that when you have powerlines or wind farms it's often easier to do grazing under them. We've got headers going under there and we've got watering systems that need to go under there. It is a substantial impost on the community to put the powerlines there, let alone to put this massive terminal station in the middle of that area.

Last Friday I headed out there and I met with the Stephens family, and I thank Frank and Colleen for hosting me at their home. I also thank Matthew and Peter for drawing my attention to what this means for their farmland in particular and to their concerns about not only the terminal station and what that means for their community but also what that means for future powerline projects and for their area.

I call very strongly on AusNet to reconsider this. What they've done—which I knew they would do from the start—is basically draw a line on a map to look at the easiest and most cost-efficient way to get this line across the countryside. They have then gone and tried to negotiate, as best they could, and they managed to find a farmer and worked away on them and got them to agree—for reasons that are deeply personal to them, being the last in their line of being able to farm on this land—to potentially sell their land. So they've just gone the easiest pathway. This is just ridiculous. In 2021 we should be looking at protecting and preserving our horticultural properties, because we have to produce food in this nation. If we don't produce food in this nation we will be heavily reliant on it coming from overseas—something that we learnt in COVID we should absolutely avoid at all costs.

In this community in particular we have McCain, where all of the growers contract and sell their produce to. McCain are saying that the impact on the farmers, in particular, is that it will substantially threaten the viability of the McCain's plant in Ballarat and hundreds of jobs; that it will substantially limit the farming activities that can be undertaken on this land; that, whilst it's not prohibited entirely, it precludes certain forms of watering systems; and that it will have a significant impact on the financial viability of some of these farms. If you care at all about having McCain's hot chips, you will have a bit of an interest in this project, because it will mean that there will be farms that will become less productive and certainly far less efficient.

Another thing that I find incredibly frustrating about what AusNet have done—and I think this is something that, as a country, we are going to have to look at really seriously—is the fact that we are just doing the same thing other and over and over again when we are building powerlines. Why are we not thinking about where we can build this technology underground, where we can use battery storage to allow the fantastic renewable energy sources that we have throughout our country to be utilised in the areas in which it is being generated, so that we are, as country people, able to get access in a better way to the renewable energy sources that we have? But instead what we see with this project, and projects right the way across the country, including in the electorates of other members here, is that we are just going to build these great big powerlines smack across the country, including across horticultural land, without any thought to productivity or whether these powerlines would be better built underground or whether there is better technology we should be using for the transmission.

So I call on the government, who is one of the decision-makers in this process, along with the Andrews state government—they are both the planning authority for this project—to actually tell AusNet to go back to the drawing board, particularly when it comes to this transmission station to be placed smack in the middle of Mount Prospect, some of the most productive farming land in the country. The community is up in arms about it and absolutely furious. I'm furious about it. It is not something that should be done. I suggest really strongly to AusNet that, whilst you think that you've taken the easiest pathway, it's not going to be an easy pathway at all, because those farming communities aren't going to sit by and just allow this to happen; I, as their federal member, am not going to sit by and just allow this to happen; and the communities that support and care about those farmers are not going to sit by and let this happen either.

So, whilst I'm very pleased to speak on this bill, which is about farm household assistance and debt waivers, I'm not so pleased to have to raise in this place that the very livelihoods of the farmers at Mount Prospect, Newlyn and Dean—whose incredible work has kept us fed, and kept us fed through COVID—are now under threat.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I can assure the member for Ballarat that McCain's potato chips have lots of fans, not the least of whom is me! That's not because I'm an avid consumer—although I am—but, as I can assure the member for Ballarat, lots of potatoes grown in the seat of Barker head across the Victorian border. Thankfully, that remained open to heavy-vehicle freight throughout the various lockdowns so that the McCain factory could continue to supply hot chips to Australians all over. So if her constituents are experiencing problems with the production of potatoes, I can assure her that I have farmers who are ready, willing and able to double down and produce yet more South Australian potatoes for chipping at the McCain's factory. Indeed, some of those producers even produce in and around powerlines in relation to those very commodities. So I wish her well, but I want to make sure that anyone who is listening to the broadcast isn't in fear that we're in some risk of a shortage of potato chips around the country at any stage. That would be a calamity!

I rise to speak on the Farm Household Support Amendment (Debt Waiver) Bill 2021, which relates to the waiver and reconciliation of debts. Something that those listening to the debate in the chamber would no doubt be aware of is that, from an economic perspective, this country is roaring back. But we need to pause for a minute because, as difficult as the recovery from the recession that has been induced by the one-in-100-year global pandemic is, in my electorate there were real issues which preceded pandemic. These were real issues preceding anyone ever being introduced to the concept of COVID-19, or any of us having really deeply thought that a global pandemic would wave its way onto our continent.

Those real issues were precipitated by a prolonged drought. I know that I speak for lots of members of this place when I say that those difficulties preceded the bushfire season that was so calamitous, as well as, obviously, the pandemic. These changes go back to those difficulties. The farm household allowance, for those who might not be familiar with it, is a payment that's made to farmers who lose their income on account of drought, or flood or unreasonable fluctuations in commodity prices. This is the concept, and it might be foreign to some, that a farmer invests a million dollars—and this is not uncommon in my electorate, given the scale of farming operations today—in seed and inputs. That farmer drills that million dollars directly into the soil. Then it's a matter of sitting and waiting.

Of course, farmers are waiting for the rain. Some of them have described it to me as being a bit like taking a million dollars to the casino and putting it on black. Of course it's not; these are determined farmers who are at the innovative cutting edge. But the reality is that 'if it don't rain, it don't grow'. I've been with farmers when they've done that not once but twice. Imagine that? Imagine having the guts to take a million dollars worth of seed and inputs and drill them straight into the ground, only to see them fail? Two and three seasons ago the headers didn't leave the sheds: nothing grew. Imagine having the resilience and courage to take another million dollars worth of seed and other inputs and drill those into the ground again 12 months later? Of course a lot of these costs are fixed—they come along whether you reap a crop or you don't.

I've sat with farmers on this. I'll never forget a discussion I had with one farmer, who told me: 'Tony, I'm about to go back to the bank for the third time. It's been two years and our financial position has worsened by greater than $2 million on account of two complete crop failures, and I'm about to do it again.' Aside from sitting with this person and thinking, 'You are incredibly brave,' the little Tony in my head—perhaps the rational one—was saying, 'You're perhaps crazy brave, but you are incredibly brave.' Then imagine me sitting there with that particular producer and that particular producer telling me that they'd had a discussion with the bank, and this was it: if it didn't rain, the bank would have to take the necessary action. Thankfully, it did rain. Those in this chamber may well know that we had a stunning season. I was pleased to visit that very same crop, during a crop competition, and I was so relieved. The resilience was measured by the smiles on these farmers' faces. The farm household allowance was the reason that that farming family could retain dignity over that 36-month period. The school fees got paid. There was food on the table. They had dignity.

From time to time—and we saw it during the global recession—for reasons that are outside of their control, businesses suffer economic loss. In some cases, during this pandemic, it lasted for three months. In some cases, for businesses in my electorate, it might have lasted six months. For some businesses it continues. I acknowledge that. But, for the overwhelming majority of them, they saw this as a relatively short-term but very stressful interruption to their otherwise successful businesses. My farming enterprises face this from time to time. Most recently, on account of the drought, they faced it for 36 months straight. The necessary expansion to farm household allowance is taking place during this period. Of course, members in this place know that any farming enterprise can access the farm household allowance for four years in any 10. Through the most recent dry period, the prolonged drought, it was increased from two years to four. Both sides of this place should acknowledge that that has been a good thing, and it was done with the bipartisan support of my friends opposite.

The reality is that, in order to have this system, there needs to be business income reconciliation. Farmers are expected to estimate what their likely income will be at the beginning of a financial year. That triggers the farm household allowance. Of course, if circumstances change, then there is potential for a debt to be raised. Perhaps, in certain circumstances, that's fine, but what we've got here is a situation where we've changed the rules. We've gone from three years in every 10 to four years in every 10, having done that to take account of the very difficult position that farmers in the prolonged drought found themselves in. It would have been unconscionable to do anything other than have another look at the debt waiver provisions.

What does this bill do? It waives new business income reconciliation debts. It removes the requirement to recredit days of payment where a business income reconciliation debt was incurred. It allows a small number of farm household allowance recipients with existing BIR debts to repay these debts using the remaining FHA days. It maintains the time limit for payment to four years. That's very important. Nothing in this bill extends that four-in-10 rule. It provides refunds to FHA recipients who incurred part-day debts where that person was still entitled to some payment. Finally, it ensures that FHA recipients can still receive a top-up payment where eligible.

At its heart, the farm household allowance is about making sure we don't lose a generation of Australian farmers. I'm not someone who comes into this place and says that farmers aren't dealt a particularly attractive hand by the parliament. I think farmers have been dealt a particularly attractive hand. No other business can income-average over 10 years. No other business has access to provisions like the farm household allowance. Indeed, no Australian individual has access to that outside of the farming network. This is a provision which effectively says that we'll provide you with income support, notwithstanding we haven't asked you to sell your investment asset—in this case, the farm.

No other Australian can expect the kinds of advantages that come with term investments linked to farming enterprises. These are particularly beneficial provisions. But they're established for a reason, and they have bipartisan support for a reason—that is, because this place knows, as do Australians, that farmers go out and face the kind of risk profile that I described earlier in my contribution. If we don't provide these kinds of safety measures, then we're not going have a generation of Australian farmers who will survive the vicissitudes of drought. So we need provisions like this. We need to remain flexible and cognisant of the real meteorological reality out there.

This is the same kind of thinking that has allowed the Morrison government to lead 24 million Australians through the recovery. It's the kind of thinking that says you've got to apply a practical, pragmatic lens to the situation that you find. That situation, 18 months ago, was a one-in-100-year pandemic event. We had run strong budgets to that point and we had the fiscal firepower to lean in. Just as we lean in for farmers in relation to FHA, we leant in particularly for the business sector and their employees through the JobKeeper scheme. That is why, in my respectful submission, we are sitting at an unemployment rate in this country of 5.1 per cent, and it is projected to go even lower.

There are employment challenges in my electorate today—absolutely there are. But they're not the ones I thought we'd experience 18 months ago. In my darker moments, 18 months ago, in quarantine at home, I thought to myself, 'How is our nation going to cope with an unemployment rate rising through 12 to 15 per cent?' That was worse than the projections, but I had a really pessimistic view; those on this side of the House who know me well know that I am the coalition pessimist! Thankfully, in this case, I wasn't proven right. It's not a product exclusively of decisions that have been made in this place; I give credit to the Australian people for where we've come to. They have shown the kind of resilience and can-do attitude that we know is quintessentially Australian. They couldn't have done any of that if we weren't prepared to effectively leverage the nation's books and debt position in favour of ensuring the economy didn't fall off a cliff.

As I said, in my electorate we face employment problems. But those employment problems aren't the 12 to 15 per cent unemployment rate I thought they'd be 18 months or so ago; they're now the strongest structural shortage in the labour market that I've ever seen in my lifetime. I'd hasten to suggest it's probably as short as it's ever been, except for the period directly after World War II. Of course, that was a point, I'm particularly keen to point out, when the Australian people turned effectively to continental Europe and said, 'If you have young, strong prospective Australians, send them to us.' My father was in that cohort. I'm incredibly proud of everything he has done. I think we're quickly coming to the point when we'll need to consider, post pandemic, something akin to that open stance in relation to unskilled labour into this country. Of course it's unlikely in 2022 to be an invitation to Europe, or at least one that wouldn't be necessarily openly accepted in that way, but I think we need to turn our attention to inviting prospective Australians, unskilled or otherwise, from other areas of our globe, including South-East Asia and the Pacific. That's how we'll solve the structural problem I have in my electorate. It's something we need to consider seriously.

Damian Drum (Nicholls, National Party) Share this | Link to this | Hansard source

It's always tremendous to follow on from the member for Barker who understands what it's like to be part of a family that arrived from Europe. With his father and family farms, it's a great story that is replicated tens of thousands of times around Australia.

Talking about the Farm Household Support Amendment (Debt Waiver) Bill, the farm household allowance has been a hallmark addition from this government that's been able to be on hand, ready to assist, in those times when our farming community simply has had no control over the outcome of the weather, whether it be drought, floods or storms, or a downturn in the milk price, which happened in 2016 when there was a serious misappropriation of the milk price. The dairy industry entered into one of these very rare situations where they had been, in fact, over quoting the price that they were paying the farmers over a period of some six to nine months and then, all of a sudden, these dairy companies effectively made the decision that they wanted their money back. This put hundreds and hundreds of farmers, right throughout Victoria and Australia, into a situation where they had all of a sudden accrued debts of many hundreds of thousands of dollars. This was something where our dairy farmers, producing all of these amazing dairy products, simply had nowhere to go; they were simply in a situation where they needed assistance. So, at that stage, the government was able to roll out the farm household allowance. It was a little bit over $20,000-odd for a couple, but it was effectively based around the concept that at least it could put food on the table and pay a few of those critical bills that needed to be paid.

We are incredibly proud of our agricultural sector here in Australia. As we've entered the pandemic we've had many things to worry about, but we haven't had to worry about food always finding its way onto the shelves of our supermarkets. Somehow, mysteriously, it's just magically happened. Even in the absolute depths of the pandemic when we had all the lockdowns, we still had an agricultural sector and a processing sector that were continually able to put food on the shelves of our supermarkets for Australian families. That's something that we should never ever take for granted. So we have to look at this industry, our agricultural sector, and our manufacturing and processing sector. We have to value it and guard it with a genuine intent. That's what this bill does.

This bill is all about making sure that we can put a value on agriculture that understands the sector, understands that every now and again it is going to need a little bit of a help, a little bit of a hand up. We were able to put around 16,000 people on the farm household allowance. The vast majority of those 16,000 farmers are still operating their farms today in better times, when we've had some fantastic rainfall over the last couple of years and where we've had higher commodity prices, where we've had a big demand for our grain, and great sheepmeat and beef prices. So it's been a bit of a help all the way through. But, now that we've arrived at the time our farmers are being even more productive and actually paying down further debt, there is a small cohort that is being left with debts associated with farm household allowance. What this bill does is effectively waive those debts. If those debts were accrued by mistakes in relation to overestimating off-farm and other farm incomes, all of a sudden farmers have been receiving some farm household allowance that they may not have been entitled to, therefore amassing a debt. What we are doing here is finding the neatest, easiest way to effectively waive that debt to enable the farmers to get on with what they are doing so well here in Australia.

I think, when you look at and compare Australia's opportunity to grow so much produce—to produce so much milk and dairy produce and also to grow so much fibre and to create some of the world's highest-quality wool—all of these attributes that we have in the agricultural sector are things that make Australia very, very strong and robust. Even though we've had all of these incredible setbacks recently, with drought, fires, floods and COVID, we still have this agricultural sector that is continuing to grow, and the outlook for our agricultural sector is still very, very positive. We have a $66 billion economy at the moment. A large chunk of that is based around our capacity to trade. The fact is that we've only just landed a new trading arrangement with Britain and the UK. That's going to be of amazing benefit and we'll continue to see this strong growth in the agricultural sector.

Australia, many, many years ago, effectively did what was called a bit of a handshake agreement, which let New Zealand find its way into England to help supply our mother country, as it was back then, with a whole raft of dairy products. That arrangement has seen New Zealand be the beneficiary of those 70-odd million people who live in Britain. But now Australia has the opportunity to join in this market, and it also puts further pressure on the EU to secure that free trade agreement that we've been negotiating with them for many, many years. If in six months or 12 months we are able to finalise that trading arrangement with the EU, we are going to see so many of these farmers who have received the farm household allowance take their farming business to another level as well, with increased markets right around the world. I think the concept of forgiving these debts and enabling the recipients of farm household allowance to pay off these debts with future farm household payments is a commonsense move. It's going to enable these people to fix all this up without any major shocks to their businesses.

I think that we need to look at this in its entirety and just be very, very proud of the fact that whenever there have been floods, fires, droughts, COVID or whatever and whenever a downturn in a commodity price has hit our markets and our farming industries it has always been this government that has been there to support them. This is a commonsense piece of legislation. We've now made a slight change to a change that we made a few years ago, where we put a limit on how much assistance you could have. We've taken that out to any four years in any 10. That has also given our farming sector a little bit more flexibility, when you consider that some of these shocks come and go in a very short and sharp manner. That's also why we've made that change.

This bill is going to help many of those people within the farming sector, as have some of the other changes that we've made along the way. We've actually increased the value that you are able to have tied up within your farming asset. That has gone out to $5 million, because, as we now know, many of these farms that are struggling to be economically viable in a given year are still incredibly valuable pieces of land, and we don't want to penalise people simply because they're sitting on an expensive asset. We don't want to effectively take away the support they need to operate and live their lives on a daily basis. As I say, this is not a lot of money but it is an incredibly important little bit of assistance that we can give our agricultural sector when they have issues that they have no control over. This is something that we need to be very, very clear about.

I'm glad that the opposition are not going to oppose this bill. I'm glad that the farm household allowance has general support right around Australia. I'm glad that it is seen as a hand-up every now and again when our farmers have issues happen to them that they have no control over. I'm glad it is not seen as some lurk. I'm glad that it is quite a pure operation. I wish the bill a speedy passage through the House and I certainly hope that our farming communities continue to go from strength to strength.

Garth Hamilton (Groom, Liberal National Party) Share this | Link to this | Hansard source

Water is, of course, the key to life for farmers in my region and all across Australia. We have seen how fortunes can turn when a little bit of rain comes and how dire things can get when we struggle through those years of dry. I was out at FarmFest just last week and it was fantastic. I was speaking to a supplier of heavy farm machinery and farm equipment. They've been going to FarmFest for nearly 10 years and this was the first time that they had seen a cheque at FarmFest. It was the first time that someone had actually stumped up and purchased a piece of equipment at FarmFest. I think that's a testament to the luck we have at the moment and the good fortune we have in our regions. We had that bit of rain and that has given us a good crop. But we don't forget how difficult it can be in those dry years. In those dry years government assistance is crucial in preventing mum and dad operations from going under due to circumstances out of their control.

Again, I would point out, in my region, that in talking at FarmFest with a lot of local farmers it's easy to forget that these are largely family-run operations. They are 700-acre soldier settlement blocks that were populated after the First World War, and then the Second World War, in my region. They're small blocks of land. They aren't giant multinationals. These are families who run their farms, who support the local communities, who send their kids to the local schools, whose use of the local medical facilities is so important to keeping these communities viable. This is what the farm household allowance is for—supporting farmers to stay on the land and producing some of the best food and fibre in the world. I remember going to supermarkets during my time in the UK and seeing New Zealand lamb being such a big thing in UK supermarkets. Now, isn't it great to hear, with the FTA with the UK, that we could maybe see Australian beef taking the same sort of status amongst UK shoppers. So it is so important that we take advantage of this and that we're there for our farmers during this opportunity.

The policy we're discussing today is one of the final elements of what we are calling a radical simplification of the FHA. It's a result of the 2018 independent farmer-led review, a review that farmers in my region were very vocal in as they experienced a tipping point to desperation after years of unrelenting drought. It has been drought after drought. We talk about the difficulties that the most recent droughts presented. I remember being out at Dalby looking at the cracks in that beautiful black soil out there that you could easily step ankle deep into. I remember the last big drought. I was down in Parkes in 2003 watching those tremendous dust storms roll in, the giant red clouds that came in and eventually went across Sydney and provided us with those amazing images at the time. We must remember that this is a cycle that will continue. It always has been here and always will be. We need to adapt to it and provide our farmers with the best possible support for it.

The Farm Household Support Amendment (Debt Waiver) Bill 2021 recognises that farm income, like the weather it's based upon, is volatile. It's based on uncertain yields and prices, and that very unpredictable Australian weather. Under previous arrangements we asked farmers to make very difficult predictions about their farm income for the year ahead. With so many factors to take in you would need a crystal ball to get this estimate correct. Of course farms take risks on this; they do. They purchase equipment. They sow crops. They prepare for opportunities. But that is a risk they're willing to take for their business, and that is what we encourage. What we shouldn't be doing is asking them to take risks that would bring them into debt through the FHA. It is wonderful to see the opposition so heartily in agreement that this is something very important that we can support our farmers with.

When farmers acting in good faith get their predictions wrong, the business income reconciliation process is the mechanism that would put them into debt. Fundamentally I think we can all agree this isn't fair. This is a process of adding more stress to farmers who are already pushed to the brink. In this day and age we understand the challenges that these conditions provide to our mental health when we see groups like RU OK? or Are you bogged mate?—another great initiative out talking to farmers about their mental health. We understand that there are stresses involved here, and it's not fair that we add to them.

One of the great challenges with farming—and I speak as someone who is the first in my line not to be born and raised on a farm, but I understand the challenges my family faced in this—is dealing with good times and bad times. In good times, the idea is that you put money away; you invest and build up. In bad times you see it through as best you can. This bill recognises that in bad times we've asked farmers to accumulate debt, and that's wrong. It was wrong and it was unfair, and the bill that we're discussing today addresses that; I think it's a very important step. In those good times, we need our farmers to invest, to build and to grow—to take advantage of opportunities like the FTA with the UK. It's a very important thing for us to do to support them in that. I think that very much speaks to the essence, certainly, of my side of politics, and I think it speaks more broadly to the Australian sense of a fair go.

This bill addresses historical debts and will give debt relief to up to 5,300 farmers. It will allow the minority of people who are owed a top-up payment to receive it and it will also maintain the FHA as a time-limited payment, with farmers and their partners eligible to receive the allowance for four years in every 10. I was always brought up with the understanding that we had seven-year cycles—that was a good rule of thumb—and that drought needed to be seen for that amount of time. I think it's important that we have a cap on this, but also recognise the weight that a prolonged drought can bring.

This bill will draw a line under a complicated process and ensure that recovery from drought, floods, bushfires and COVID-19 is not made harder for the small number of farmers who still have to repay their debts, those who have received another full year of payment for each BIR debt. There will still be options on the table, including payment plans to assist them in repaying their debt. This is to prevent double dipping and will ensure that no-one is entitled to more than the 1,460 days of farm household allowance. Again, we're making sure that this is very fair and can be applied across the industry as best as possible. This further strengthens fairness in the system and ensures it can continue to support farming families into the future. It's very difficult for us to acknowledge that there will be future droughts, but of course there will be. We have to look forward to those and understand they're something we can address. We can find ways to work through them and to support our farmers through them.

This is very important, because this particular drought isn't over yet, especially in Queensland. As of 1 May, there were a total of 37 councils and three part-council areas which were drought declared, including the Toowoomba Regional Council, which overlaps almost directly with my electorate. It's very hard to get the feeling that we are in drought when driving through the Toowoomba region. Quite frankly, the country is looking absolutely spectacular—either coming up from the Lockyer Valley and seeing the beautiful green hills and the green cityscape or coming in from Dalby, looking at all the wonderful winter crops out through the fields. You get the understanding that things are happening, that it's a good time in our industry and that there's a sense of hope and optimism which comes with that rain. But it's still very much a green drought. With all the rain that we had recently, Lake Cooby Dam, one of our local dams, is still only at 31 per cent; before the rain it was at 30 per cent. So we're still in a situation where water is scarce; we're still going to have to work very hard to see our way through over the next couple of years, and we're certainly not through the drought. If anything, the water that we've had has put a little bit of moisture into the soil after long years of it being pulled out, but we certainly aren't into a situation now where we're in the clear. We have a long way to go and we need to recognise that.

These drought declarations represent 65 per cent of the total land area of Queensland. That's a significant area. There are also 23 individual droughted properties in a further seven local government areas which are struggling. To all those farmers in those areas: this is a directly applicable bill that we're moving here today. I want those who are still waiting for rain to know that this government is committed to supporting them, both through this drought and into future droughts—as we will through other natural disasters. Simplifying this FHA process is one very commonsense, fair and sensible step that we can take to ensure that we stand with our farmers. The FHA will continue to put money on the table when times are tough, allowing farmers to consider the right course of action for their business.

I think there are broader implications of this that are worth acknowledging, particularly for a place like Toowoomba, which is a hub for regional education and regional health services. These farming families come into Toowoomba—they always have and they always will—to send their children to school. I've spoken to several Toowoomba private school headmasters who are very used to having to deal with farming families through very tough years. They know they can't ask mum and dad to put the fees on the table that year, because they simply don't have them, but they also know that, when the good times come, those fees will be paid and the debts will be cleared. In a place like Toowoomba, we need to ensure that those farming families continue to come in, because it's the accumulated use of those services which makes our services so good. Our medical facilities, too, rely upon the patronage of a wide area of south-western Queensland—and northern New South Wales, for that matter. They rely on people coming to Toowoomba to seek the exceptional health care that is on offer there. Every step that we can take to reduce the burden on those farming families is something that we will feel on a much broader scale.

The final point I'll make is that the timing of this could not be better. This is probably the first year since 2016 when farmers in my region not only have experienced a good summer crop but have seen it followed up by a winter crop. This is an exceptional time for us. It's a time of hope and prosperity, and it's a great opportunity for both sides of the House to stand united with farmers and show them that we are there, we do support them and we will continue to support them.

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

Life on the land can be very rewarding, and most farmers that I know wouldn't see themselves anywhere else. But, as we've seen time and time again, it can also be incredibly difficult. It can take a huge toll financially, emotionally, physically and mentally when, no matter the hours that are put in and despite the best-laid plans, so much hope is smashed due to factors outside farmers' control—namely, uncertain yields, price changes and unpredictable weather. In recent years we've seen fires, floods and droughts, and now we have COVID-19 and a mouse plague as well. Being married to a sheep and cattle farmer of many generations myself, I've certainly come to understand how volatile farm income can be and the stress that the constant unpredictability of that industry can put on a family.

On our own farm we've had a pretty good year, with some decent rain, and with sheep and cattle prices high. But last year, when rain had been a bit scarce, we were feeding grain to those same sheep in February. And around 15 years ago, in very dry conditions, you could hardly give those sheep away. At our annual lamb sale, sheep prices then were down to about $2 per head. Wool, too, can be very volatile, with good markets in recent years now being affected by the impacts of COVID-19, for example.

Farming in Australia will always be a case of swings and roundabouts. The farm household allowance is a necessary payment for farmers and their families in hardship, and one that the government is committed to getting right as we continue to provide essential support for one of our most essential industries. We acknowledge that, under previous arrangements, we asked farmers to make difficult predictions about their farm income for the year ahead, which did result at times in farmers, after acting in good faith, becoming liable for a debt. Recognising this, we've already removed the business income reconciliation process that would make farmers liable for debt, which was a step in the right direction. Importantly, this bill today, the Farm Household Support Amendment (Debt Waiver) Bill 2021, will now address that historical business income reconciliation debt, providing much-needed relief to over 5,000 farmers. The waiver means that most farm household assistance recipients will not have to pay back debts incurred due to inaccurately estimating future income while receiving the farm household allowance.

Significantly, beyond waiving new BIR debt, this bill also removes the requirement to recredit days on payment where BIR debt is incurred, allows a small number of farm household assistance recipients with existing BIR debts to repay the debts using their remaining farmhouse allowance days, maintains the time limited payment to four years, or 1,460 days, in every 10 years and provides refunds to farm household allowance recipients who incurred part-day debts where the person was still entitled to some payment.

It's important to note that since the 2018 independent farmer-led review of the farm household allowance, a number of reforms have already been implemented, including the passing of the three previous bills to implement changes, which were introduced over five tranches. These include, from 1 July 2019, profits from the fourth sale of livestock that are placed into a farm management deposit are not considered for the purposes of the income test for farm household allowance. The treatment of income from business was amended so that allowable deductions can be claimed against related income. From 16 December 2019, the off-farm income offset upper limit increased from $80,000 to $100,000. Farm losses can now be offset by off-farm income up to the $100,000 limit per couple, and eligibility for farm household allowance was extended from four years to four years in every 10-year period. From 25 March 2020, the 28-day time limit to conduct a farm financial assessment was removed, allowing case managers to take into consideration the complexity of the farm business and the availability of the person conducting the assessment. From 11 June 2020, anybody who qualifies for a payment can automatically receive the maximum amount. The assets test was simplified to a single amount of $5.5 million. Rural financial counsellors and farm consultants are able to complete the farm financial assessment, and the activity supplement increased to $10,000 per person and can be used for reasonable travel and accommodation to undertake the activities. From 1 July 2020, the requirement to undertake BIRs was removed.

This government does understand the challenges faced by farmers. We understand what it means to work in a country that is so subject to the vagaries of weather, and we will always be here to support our farmers in their time of need. This legislation is an important step forward towards ensuring that this support is targeted to those most in need and takes away unnecessary worry for those already in very stressful situations.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

As anybody in business knows, the first point to any business strategy, let alone a growth strategy, is to protect and leverage your core, to ensure that your core competency continues to be your strength. As you look at Australia, the agricultural sector is one of our core competencies, and we need to ensure that we continue to hold up that industry and leverage it as much as we can. Of course, it's easy for those who read the headlines to know that we're looking strong in terms of the winter crop—whether it be wheat, canola, chickpeas; you name it, the winter crop is looking pretty strong—but behind those headlines lies an enormous amount of challenge. As farmers in Australia know, they deal in a highly volatile environment. It doesn't matter whether it be the yield, the weather or the global prices, the everyday Australian farmer has to deal with a constant state of uncertainty, which is not at all easy for any business let alone those that also have to deal with drought, with flood, with storms, with fires, with COVID-19 and, indeed, now with mice.

The Australian farmer is the most resilient of our people, but it is amidst uncertainty that they must operate, and this is why this government introduced the farm household allowance scheme back in 2014—in recognition that the farmers need assistance. Now, they're tough; the Australian farmers are the toughest people you find. However, they too come up against financial hardship. That is why this farm household allowance was introduced. What that meant was that farmers were able to receive payments and, in the event of conditions improving, they could roll off those payments, ensuring that there was still some sort of preserved access available to them should conditions again go south.

Like any scheme, you need it to be reviewed and improved. In 2018 an independent review was taken of the farmhouse allowance scheme. It made recommendations to the government, and, true to form, this government again stepped up. Further support was allowed, and we tried to make the scheme even more accessible, easier for the farmer, and we delivered on that. Today, in this House, we debate the Farm Household Support Amendment (Debt Waiver) Bill 2021—another measure of amendment that we are taking on board to try to improve the ease of access and, more than anything, the fairness for the everyday farmer. Let's keep in mind that we are not talking here about a handful of people across the country. We've had 16½ thousand farmers—16½ thousand farmers!—and their partners accessed this household scheme since its introduction, but what we've found is there's another measure that could improve.

What farmers do is they predict their income for the year ahead amidst all of those uncertainties. Then, after the year has gone and they've received some payments, due to their financial hardship, there is a reconciliation that's done based on actual income for the farmer. That business income reconciliation process obviously leads to discrepancy. What we have found is that where a farmer gets the prediction wrong, which one can understand, then, in the event of them receiving more payments than should have been due, the overpayment suddenly turns into a debt to the Commonwealth. That debt hangs over these farmers. And what we see through this amendment bill debated today is the waiving of those debts for up to 5,300 farmers and their partners across the country, giving them alleviation from that debt. It's also ensuring that the integrity of the scheme remains intact.

So, we will, as a nation and, indeed, as a government, continue to recognise the importance of agriculture as a core competency of our nation. We will continue to recognise that, despite the inherent resilience of the Australian farmer, they too come up against hard times. It is incumbent on the government and the people we represent to ensure we provide access easily to those farmers. And where there is a payment that has been made, based on a very fair and genuine prediction, that creates a discrepancy, then those debts, within a very defined period of time, will be waived while the integrity of the scheme remains. With that, I commend the bill to the House.

Nola Marino (Forrest, Liberal Party, Assistant Minister for Regional Development and Territories) Share this | Link to this | Hansard source

I would like to thank the members who have contributed to the debate for the Farm Household Support Amendment (Debt Waiver) Bill 2021. This bill addresses historic debts arising from the business income reconciliation process for farm household allowance recipients. The BIR setting was removed from the payment from 1 July 2020 in response to the independent farmer-led review of the farm household allowance. This bill will complement that decision by waiving repayment of debts arising from historic BIR cases. It will also ensure consistent and fair treatment for all FHA recipients in applying this waiver. This approach will give relief to farming families recovering from hardship, as a small but vital part of our better deal for Australian farmers. I commend the bill to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Franklin has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be disagreed to.

Question agreed to.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.