Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Hansard source

I thank the honourable senators who took part in this debate and I thank the Senate in anticipation of the support that the Farm Household Support Amendment Bill 2007 is about receive. As so many honourable senators have already said, this bill will help those small business operators who, due to the ongoing drought, are unable to meet the financial needs of their families. It is correct that this is not the first time this government has offered drought assistance to small business operators, but it should be noted that this program is very different to the one offered in 2002. During this debate it was mentioned that the assistance on offer in 2002 had low uptake rates and had a number of concerns raised about it by the small business community. However, based on that which we learned from the prior assistance measures and the expertise that has been gained from delivering exceptional circumstances assistance to farmers, this program is more in touch with the needs of agriculturally dependent small business operators. To put it simply, we have learnt from our past experience and are willing to tailor this program accordingly. This program will provide more value to small business operators.

The exceptional circumstances program for agriculturally dependent small business operators mirrors what is already in place for farmers. What we see in this bill is just one component—income support. There is also business support or interest rate subsidies on offer for eligible small business operators. In the 2002 small business program, only business support was available to small business operators suffering because of the drought. Interest rate relief was available only on loans of up to $100,000, meaning that a maximum of $10,000 over two years could be received. Small business operators can now get interest rate subsidies on all their commercial debts up to a maximum of $100,000 a year, just like farmers.

The 2006 assistance program also offers something new to small business operators—the income support outlined in this bill. On top of receiving funds to help meet the financial obligations of their business, agriculturally dependent small business operators may be able to receive up to $760 a fortnight for income support to help meet their household expenses. Those receiving income support can also access ancillary benefits such as a health care card and concessions under the youth allowance and Austudy means test. The program has been well received and it is already proving successful. It is expected that around 5,000 small business operators will be able to access this exceptional circumstances assistance. While I obviously cannot guarantee that exactly 5,000 people will walk through the door to get the assistance, as it is a demand driven program, I can say that we are well on the way towards achieving our target.

Since the program was announced in November 2006, approximately 1,500 applications for exceptional circumstances assistance from small business operators have been received. This figure is increasing at an amazing rate. On 13 February this year, the number of applications was around 800. In effect, in the last five weeks, application numbers have doubled. As more and more small business operators become aware of the assistance they can access, these figures will continue to grow. I expect that the number of applicants will increase following the recent advertising campaign and the continued good work of the drought bus.

Similarly, since November 2006, over $5 million has been provided to over 280 applicants at an approval rate of 69 per cent. In the last five weeks, the funds allocated to small business operators have almost trebled from $1.6 million. Based on these figures alone, the small business assistance program is performing better than the previous scheme, where we had 452 applications, 152 recipients and $1.1 million over the life of that program. You do not need to just take my word for it; the feedback we have received from the industry supports this initiative and confirms that the interest rate subsidies and relief payments are very valuable forms of assistance.

Questions have also being raised about whether this new program is getting to the right people. As I have already pointed out, the uptake rate of small business exceptional circumstances assistance has been very good. Of course, the approval rate will not be 100 percent as there are people out there who have not been able to access the assistance for a number of reasons. I can confirm that the two main reasons that small business operators are not able to get assistance are: they are not providing goods and services for the purposes of farming activities, or they are not in financial difficulty and are still trading profitably. Those small business operators who are unable to get assistance because they are not agriculturally dependent should be aware that they will indirectly benefit from the assistance provided. Providing assistance to both agriculturally dependent small business operators and farmers will have flow-on benefits for townships as they will continue to provide essential services and have some income to spend in other local businesses. We are already seeing a shortage of skilled workers in rural areas, and also young people from rural areas are being lured away to the city. By supporting small businesses in rural areas, we can reverse the current trend—because we all know that, once people leave regional Australia, it is very hard to get them back.

While farm businesses have been the first group to experience the effects of the worsening drought, agriculturally dependent small businesses in drought affected areas are definitely experiencing hardship as well. We as a government recognise that, without the assistance provided by this bill, the ability of some small businesses to service rural and regional communities may be at risk. Government and industry are working together to move the drought policy towards drought preparedness. All agriculture ministers—federal, state and territory—have focused their efforts on immediate assistance and will return to drought policy reform once the seasonal conditions allow their recovery processes to commence. I am sure that we are all hoping and praying that that may be as soon as possible. I thank honourable senators for their support and contributions on this bill.

Question agreed to.

Bill read a second time.