Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

FUTURE DROUGHT FUND BILL 2019

The Liberal-National Government is focused on helping farmers and communities prepare for inevitable future droughts.

The Future Drought Fund is a long-term investment to build drought resilience, including preparedness and recovery in our most drought affected communities. It will enable farmers and their communities to fulfil their potential as productive and profitable contributors to the Australian economy by improving the performance of the agriculture sector.

Healthy farming landscapes with innovative farming techniques will contribute to a drought resilient and sustainable agriculture sector. The Future Drought Fund will be available to support research, development and innovation. It will also support the delivery of infrastructure projects, promote the adoption of technology and deliver improved environmental and natural resource management to enhance sustainable agricultural practices. The Future Drought Fund will provide farm and community support to bolster drought resilience across Australia's rural and regional communities.

This Bill establishes the Future Drought Fund and provides an initial credit of $3.9 billion. The Government intends to grow the Fund until it reaches $5 billion, while at the same time drawing down $100 million per year from 1 July 2020 to build drought resilience across Australia. Once established, the Future Drought Fund will provide a new, secure, predictable revenue stream to build drought resilience across Australia.

This funding is additional to the funding already made available by the Liberal-National Government to assist farmers during an existing drought and will not replace existing funding.

The Bill contains a robust and transparent governance framework, which has been augmented by amendments made by the previous Parliament in the House of Representatives, and I thank the current and former members of the House of Representatives crossbench for working productively with the Government on these. The governance framework is similar to the frameworks of other funds, such as the Medical Research Future Fund.

The Future Drought Fund will be managed by the Future Fund Board of Guardians, which has a proven track record of managing investment portfolios on behalf of the Government and maximising returns over the long-term.

The Bill requires the Treasurer and the Minister for Finance to issue directions setting out the Government's expectations as to how the Fund will be managed and invested by the Board, including setting a benchmark return for earnings. In setting the benchmark rate of return, the Government will consider the objectives to grow the fund to around $5 billion and make annual payments to the Agriculture Future Drought Resilience Special Account of $100 million per year to build drought resilience.

The Government will develop and publish the Drought Resilience Funding Plan to ensure that a coherent and consistent approach is undertaken when considering and providing funding for drought resilience projects. The draft Funding Plan will be informed by expert advice from the Future Drought Fund Consultative Committee, which will be established by this Bill. The Consultative Committee will consist of a diverse range of experts in fields such as the agriculture industry, drought resilience and rural and regional development. The Funding Plan will also be informed through public consultation over a period of at least 6 weeks.

The Funding Plan will be reviewed every four years to ensure that emerging priorities are appropriately captured and the Fund remains future-focussed. To help inform these reviews, the Productivity Commission will conduct an assessment of the effectiveness of each Funding Plan before it expires, including having regard to the economic, social and environmental outcomes. The Productivity Commission will make recommendations and the report will be tabled in each House of the Parliament.

In developing the Funding Plan, the Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management (Minister for Drought) will have regard to the National Drought Agreement and any successive agreements, as well as any related Government drought policies and strategies.

The Funding Plan will inform the design of the programs, which will be considered through future Budget processes. The Consultative Committee will provide advice to the Minister for Drought on whether the proposed design of a program for arrangements or grants is consistent with the Funding Plan.

To further ensure consistency with the Funding Plan, the Minister for Drought is required to seek advice from the Regional Investment Corporation Board before entering into any grants or funding arrangements. The Regional Investment Corporation Board is a skills-based independent expert board with the knowledge and experience needed to oversee significant government investments in farm businesses and water infrastructure. All funding decisions will comply with the Commonwealth's established rules and guidelines on grants and procurements. Detailed information on grants and arrangements under the Future Drought Fund will be published on the Agriculture Department's website.

Drought is a constant factor in Australian agriculture and the establishment of the Future Drought Fund will provide a new, secure, predictable funding stream for drought resilience into the future to ensure the potential of this vibrant industry is realised through drought resilience planning.

The Government has been absolutely clear that use of the dormant Building Australia Fund to deliver the Future Drought Fund will have absolutely no impact on the funding of the National Disability Insurance Scheme, which is fully funded through the Liberal-National Government's responsible economic and fiscal management that has delivered a strong and improving budget position, and a credible path back to surplus in 2019-20. Sustained responsible economic and fiscal management has ensured that the National Disability Insurance Scheme is fully funded, without the need to increase the Medicare levy or proceed with the previous Building Australia Fund measure.

It is why we are now in a position to guarantee Australians with a disability, and their families and carers, that all planned expenditure on the National Disability Insurance Scheme will be met in this year's Budget and beyond.

We have also committed more than $100 billion over the next 10 years to new and upgraded transport infrastructure projects across Australia, $47 billion of which is planned to be invested over the forward estimates.

Helping our farming communities face the challenges of drought is a key focus of this Government and because we have fully funded the NDIS and made substantial infrastructure commitments, we are in a position to build a sustainable source of funding for drought resilience, preparedness and recovery across Australia.

FUTURE DROUGHT FUND (CONSEQUENTIAL AMENDMENTS) BILL 2019

The Future Drought Fund (Consequential Amendments) Bill 2019 facilitates the establishment of the Future Drought Fund through amendments to related legislation.

The consequential amendments to these acts enable the effective operation of the Future Drought Fund at commencement, including the abolition of the Building Australia Fund.

Commencement and further details can be found in the explanatory memorandum.