Mr CAMERON THOMPSON (9:12 PM) —It is a pleasure to rise this evening to address the Retirement Assistance for Farmers Scheme Extension Bill 2000. Really, those of us from rural electorates are keen to welcome this bill. I would like to cover some of the various elements in relation to it. The idea of this proposal stemmed from the Special Rural Task Force, which I suppose you could describe as the Tambling committee, because it was headed up by Senator Grant Tambling. It covered a range of issues looking at the way the social security network impacted on rural areas.

Going to the explanation that that committee put together in its report on the impact of gifting provisions, I will quote what they had to say about gifting provisions—that is, those gifting provisions that applied at the time; and we are talking at the moment of those established in September 1996. The committee ran for a period of four months and, in its report, it said that the gifting provisions that applied at that time meant that:

That was the situation as it applied as laid out by the Tambling committee, that Special Rural Task Force, in its report dated January 1997. But, of course, there were many problems with the regime and that difficulty laid out and identified by the committee. For example, it gave a couple of illustrations of cases that were submitted to the committee, and I will give one here. On page 34 of the committee's report, it quotes a farmer from New South Wales saying that:

That is one example, and there are also more on page 28 of that report. Another states:

It continues:

Those examples make very clear the extent of the problem that was confronted by the Special Rural Task Force that in the end led to the establishment of the provisions that we are discussing tonight. That task force, in recommendation No. 15 of its report, stated:

It then stated:

Such a proposal should be promoted very strongly in the farming community because it is exactly the kind of provision that the farming community was crying out for at that time. What ensued following the completion of the report of the Special Rural Task Force was consideration of that issue by the government and a decision by the government to include the Retirement Assistance for Farmers Scheme proposal in the AAA package, the Agriculture Advancing Australia package.

Perhaps I can go into the elements of that because the AAA package was a very positive innovation and it provided a range of important measures that continue to assist agriculture in Australia. This particular part of it, the Retirement Assistance for Farmers Scheme, was introduced in the Social Security and Veterans' Affairs Legislation Amendment (Retirement Assistance for Farmers) Act 1998. That was given royal assent on 2 July 1998.

When that scheme was introduced, these were the provisions that went along with it. As well as applying to people who fell within the period of the operation of the scheme—it was to start on 15 December 1997 and it was due for completion at the end of September 2000—it also applied to those who had transferred title to the new generation any time in the previous five years. That I think is a very welcome and generous provision that was provided by the government.

These are the circumstances that were applied to it, and I think members should reflect on the way this reflects the recommendations of the Special Rural Task Force. For example, it stated that the farm, except for the family home, must be transferred and that the value of the farm should be equal to or less than $500,000. It could not be transferred from a company but from a farmer or from a partnership involving the farmer and a spouse. Those people would have to have been in farming for 15 years. It was income and means tested and compared with the pension, as suggested by this special rural task force. Also, that comparison with the pension and that income would have been tested over a period of three years. The person who is the transferee under the requirements must have a farming background; also the transferee is required to be actively involved in farming for the three-year period prior to the transfer. Obviously, if you compare one with the other, the decision by the government very strongly reflects the position that the rural community was telling the government to adopt.

I have had the privilege, I suppose you might say, of listening to the member for Calare discuss this proposal tonight. I appreciate the comments he made because I am about to move into the area of discussing the criticisms that have been raised about this particular piece of legislation and the proposal that we confront now to extend it to June next year, which is a nine-month extension.

It is okay, I think, for people to bring attention to those criticisms, but the member for Calare is in the position of being an Independent who has chosen not to take part in policy development and not to submit himself to the discipline of being part of a party and having to develop a regime of policy making that fits the environment and is accountable. When you are in a position like that, you get the opportunity to adopt whatever level of criticism people want to throw at a scheme without necessarily having to follow up or be accountable yourself.

It was interesting to hear what the member for Calare had to say. I will discuss some of the criticism that has been raised in relation to this bill too, but I think members do have to give credit where it is due. In the words of the member for Calare, this program has undoubtedly assisted rural communities in Australia, so I think we should listen to that part of his speech much more closely than the other rabbiting on he did about some of the problems that apply.

Let us look at some of those problems. Farm groups said that the value of the property should be $800,000. To demonstrate the applicability of that figure, they used a 1997 farm survey report which said that the average value of farm businesses at that time was $968,000. That is probably a criticism you could take on board, but you have to remember that the purpose of this legislation is to address people who are really going to benefit from being able to move forward their entitlement to a pension. We are not talking about people who are at the upper end of the rural industry; we are talking about people who are operating a farm but wish to move on to a pension. I think the figure of $500,000 is appropriate in many cases in my electorate. I know that there would be people in higher levels than this, but I think one of the difficulties has been that people find themselves trapped, in effect, on a farm when it is no longer productive and when they really do need to move on to a pension. That is the problem that this legislation has been very effective in addressing, and I think credit deserves to be given in relation to that.

There was also criticism that there needed to be more flexibility to allow people to work off farm. I tend to support that, because the overwhelming trend at present with the falling commodity prices that we face and the difficulties that are emerging for people on the land—particularly when we are talking about a small holding with not much opportunity for people to make big profits—is that many of them are turning to off-farm income as a way of supplementing their existence. So this is really something that can be considered and perhaps addressed by the government in another way; certainly it could be addressed by way of more flexibility in this regard.

There was also criticism that there needs to be more time for succession planning in rural industries. I think we could apply this right across the board. I notice that the library's briefing on this issue that was given to members of parliament quoted a Western Australian survey which said that, when it comes to the problems of succession, only 14 per cent of farmers were succession planning. It said that, in 51 of 67 cases, difficulties in relation to succession planning had led to disagreements among those farming families. You could certainly argue that in no way can a piece of legislation, no matter how effective, serve to remove the personal element of transferring something as valuable and emotionally important as a family farm between generations. You will not get away from those kinds of difficulties and you will not get away from the problem of the older generation wanting to hang on, protect the asset and ensure that, for example, there is not going to be a marriage breakdown in the younger generation which may result in problems.

After two years of seeing the system in operation, I think we can say that it has been very successful. It was reviewed by the Department of Family and Community Services, and after year one it was found that 716 farmers and spouses had been assisted by the program. By June 2000, there had been 1,400 farmers and spouses assisted by it. However, I note that Senator Newman quoted a figure of 1,550 people who had been assisted by it as of 28 March 2000.

What is great about this bill we are looking at tonight is that we are going to be extending this program and opening it up for people to access right through until the end of this financial year. We have a nine-month extension. We have the opportunity for farmers to access that scheme right through until the year 2003-04, and the cost of that extension is quoted as being something like $7.5 million. It has been a very effective program and I really do think members from rural areas will welcome its longer introduction. It has been a complement to and a very important feature of the Agriculture Advancing Australia program.

In closing, I would like to reflect on some of the important developments that that package brought to Australian farms. For example, it included the creation of the tax linked Farm Management Deposit Scheme. It included $50 million for the extension of business management skills under the Farm Business Improvement Program, known as FarmBis. It allowed older farmers to transfer the ownership of the family farm to the younger generation—the very issue which we have addressed tonight. That was cited at the time as having a value of $77 million. It also continued the exceptional circumstances assistance to farmers through two different provisions. It also provided the Farm Family Restart Scheme, introduced from 1 December 1997, which was worth $120 million. And it included the improved Rural Communities Program, worth a total of $40 million, to provide assistance to rural communities.

The Retirement Assistance for Farmers Scheme is worth while. It has now been in place since royal assent was granted on 2 July 1998. I would like to say on behalf of primary producers in my area that it has resulted in many positive applications and many people have been able to overcome problems that many of them, I honestly believe, had thought were insurmountable. In closing, I would like to welcome its extension and urge members to continue to look for other ways in which we can assist the intergenerational transfer of farms because of course this is the way in which we drive up the productivity of these farms. We have a problem where the farming community is an ageing community. In some of the material that I have here, it is stated that the average age of farmers is 55. I would swear that that age is going up. I am sure members are keen to see more keen young farmers brought into the system, so that we can look to the future and find new ways to boost productivity, new methods and new profitability not only for the farmers themselves but for the communities out there that are desperately reliant on a profitable rural sector.