Perin Davey (NSW, National Party) Share this | Hansard source

I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. Firstly, I want to address a couple of the issues that have been raised in the debate to date. Senator Sterle quite rightly pointed out that drought is not just about farmers and that we've got businesses and communities suffering right now. That is why, in our most recent drought announcement package, we also extended the no-interest—and then low-interest—loans to small agricultural businesses. It is the first time that recognition has been given to the fact that agricultural businesses fall foul of drought just as much as farmers do. Senator Sterle quite rightly pointed out that there are towns running out of water right now. He is right. There is nothing we can do immediately. Aside from offering funding to the states to help them put in pipes and bores, there's nothing we can do to change that. But there are communities that took proactive steps in advance of this drought. Orange in my home state is a case in point. They have actively put in measures to capture their stormwater, which is seeing them have water to get through the tough times. We need to encourage more communities to think outside the box, and this federal government is ready to stand with them and look at those solutions and get them underway. And that is what the Future Drought Fund is about.

We are the first ever government to look at long-term investment in drought resilience strategies, and we're willing to talk to any community and any state government to do so. For years we have been calling for a collaborative approach to building dams. And, yes, it is quite right for those on the other side of the chamber to point out that, while we've been talking about drought, we haven't built any dams, but we haven't built any because, to date, we haven't had a state willing to join with us on the path and get those dams built. We do now; we have New South Wales stepping up. They're prepared to come with us and build Dungowan Dam and upgrade Wyangala Dam, and get results. We have projects and proposals in place and ready to go in Queensland and we've got other drought funding projects ready to go in South Australia. We are very proud to be a government that is looking at the future, but this bill is not about the future; this bill is about the here and now.

We have a world-class agricultural industry and our government is working hard with the NFF and others to achieve the golden aim of a $100 billion agricultural industry by the year 2030, and we need our farmers to achieve that ambition, but right now our farmers are experiencing challenging times. In my home state of New South Wales, farmers in the north are facing the worst drought in living memory, and in my home region we are knocking on the door of the millennium drought. Supporting our farmers as well as rural and regional communities that depend on the agricultural industry remains our government's most urgent priority. The cyclical and unpredictable nature of farming in Australia means our farmers and primary producers face a range of unique challenges, and that's why we're moving this amendment today to help those in the industry who are facing financial hardship.

Since its introduction, in 2014 the farm household allowance provided over $365 million in fortnightly payments to more than 12,800 farmers and their partners. Senator Sterle noted that some have reached their time cap—that is, they've been on farm household allowance for four years and reached the end of their time cap—but what he didn't mention is that 5,445 of the farmers who were receiving farm household allowance were able to leave the program before their four-year time cap. That is because we have funded rural financial counsellors. We put people around the kitchen table with farmers to look at their business models and their forward planning and help them become self-sufficient again, and that's what our farmers tell us they want. However, the program gives income support to eligible farmers and their families to pay for basic household necessities while they make important decisions about their future. It also provides thousands of dollars to help with financial assessment and financial counselling.

As Senator Rice rightly said, these latest changes follow a review undertaken by an independent panel, led by Michele Lawrence, which also had extensive consultation. While I agree with Michele Lawrence that farms are small businesses, now is not the time to turn around and tell those small businesses that we're not going to support them in the midst of drought. After this drought finally breaks, we will be prepared to carefully look at longer term strategies. However, at the moment we need to make sure those farmers are still there at the other end. We have looked at the panel's report to government and we've implemented the changes to ensure this program remains fit for purpose and continues to meet its objectives of providing income support and assisting structural change. That's why we have extended the time cap in this amendment. Instead of four years in a lifetime, it becomes four years in 10 years, because we acknowledge that farmers often encounter more than one period of hardship in their lifetime. An eligible farmer or their partner will now be able to access the payment for up to four cumulative years in each 10-year period.

The other important aspect to this bill is the change to the income test. Many farmers run diverse business operations out of necessity. This is a very smart move for farmers who are taking action to be more resilient, more self-sufficient and prepared for drought and other impacts on their farm business. However, we know that when conditions are tough even our good farmers can find they struggle to make ends meet. This bill allows for a fairer assessment for those facing hardship to have their eligibility for the household allowance tested with their income and losses. For the first time, we will link farm enterprises with their directly related businesses. Income and losses will be considered together. This is a more generous setting than previous and current practice. If there is a net loss it can be used to offset any other income, like wages, interest and dividends from shares or investments. The offset has been increased from a cap of $80,000 to $100,000 per couple, recognising the businesses of many of our farmers, and single people can use the whole cap for themselves.

For the first time, farmers generating income from agistment can have that income considered against either the farm enterprise loss or the loss of a related business. It will broaden the scope of those who can claim the farm household allowance, and the offset will no longer be restricted to claiming the interest payable on a farm loan. An intergenerational loan, the broadened offset is available to all farm household allowance recipients involved within the farm business. That means that if mum and dad, as well as their son and daughter-in-law, are on a farm household allowance, and the farm business has a loss of $200,000, then each couple can use their offset to share in that loss. So that $100,000 limit applies to the person or couple, not just to the farm business. It also applies to people who are not life partners but business partners.

Many farmers who are exiting the farm household allowance income support have done everything they can to respond to their circumstances and are still enduring financial hardship. In recognition of the enduring nature of this drought that seemingly will not cease, we know that at moments like these those farmers need a little extra help and support to keep food on the table and to keep their businesses running. That is why we have implemented a relief payment to help make ends meet. Recipients on a single rate of payment will receive $7,500 and recipients on a partnered rate of payment will receive $6,500, or $13,000 per couple. We will deliver this payment within six weeks to those who are eligible, and that is why it is so important that this bill be passed today—so that we can get that money to where it is needed.

Farmers are exposed to a lot of risks that they can't control. The farm household allowance is designed to help farmers assess their position and to look at succession, or decide to sell up or decide to continue in business and work with their rural financial counsellor. The farm household allowance enables those farmers to take stock and to make sure that their business is fit for what their lifestyle and life requirements are. The suite of measures contained in this bill will strengthen the farm household allowance program, to ensure it remains fit for purpose. The first step to making it easier for farmers is to access the support they need. The government will continue to stand alongside farmers—indeed, alongside all those living and working in rural and regional Australia—as they experience the worst drought in living memory as well as the extraordinary hardship it brings. I commend this bill to the Senate.