Ms O'BYRNE (11:20 AM) —Before I go to the content of the Farm Household Support Amendment Bill 2000, many people have mentioned the wine pioneers dinner last night, which I did not get to attend, but I could not let the comments about some of the finest wines in Australia go by without mentioning the high quality Tasmanian wines, particularly those produced in my own Tamar Valley region.

Mr Secker —Less than one per cent of Australia's production.

Ms O'BYRNE —It is the niche, quality end of the market. Agriculture, dairying, fishing, food and beverages constitute a major part of the Tasmanian economy, namely one-third of gross state product and approximately 700,000 jobs. In 1997-98, it was estimated that the value of primary production to Tasmania was $931 million. Farmers make up approximately 8.5 per cent of the Tasmanian working population.

The Farm Household Support Amendment Bill 2000 seeks to change the name of the Family Farm Restart Scheme to Farm Help, extend the family farm income support application deadline to 30 November 2003, and the Farm Help income support application closing date to 30 November 2004. It introduces a mandatory requirement for farmers assessed as non-viable to develop activity plans directed towards either returning the farm to a viable position or securing alternative employment for the farmer. It includes a provision for a retraining grant of $3,500, offers voluntary case management and includes provision for a ministerial discretion in the provision of a re-establishment grant to be available where exceptional circumstances have led to a delay of more than 12 months in the sale of farm assets.

As the House would be aware, we fully intend to support this bill, which is the government's response to a review of the Farm Family Restart Scheme which was completed in March 2000 by AFFA. Overall, the Farm Family Restart Scheme has received industry support. However, there have been some concerns, I think members will agree, that the assets test has been a little restrictive.

I would like to take a few moments to put this speech in a historical context. Whilst the Commonwealth of Australia has provided assistance for rural adjustment since the 1970s, the severe Australia-wide droughts of the early 1980s exacerbated and highlighted farm poverty. Introduced in 1985 through an agreement between the Commonwealth and the states, the Rural Adjustment Scheme's objective was to return to commercial viability those farms and farmers assessed as having sound prospects of commercial viability in the longer term. As well, the scheme provided assistance for farmers assessed as having no prospects of long-term commercial viability in order to leave the farm. The farm build-up provisions were designed to encourage amalgamation of properties that were too small to be economic under the conditions at the time. Assistance for debt reconstruction, farm build-up and farm improvement took the form of loans on terms and conditions that the state authority considered appropriate, or by an interest subsidy on loans through normal commercial sources.

The scheme operated on a lender of last resort basis and was an important mechanism for facilitating the Australian rural industry's adjustment process. As well, household support had been included in the scheme to provide help for those farmers who were judged as being non-viable and had insufficient resources to meet their living expenses; in other words, assistance to alleviate conditions of personal and family hardship whilst farmers considered whether to adjust out of the farming industry.

In the early 1990s, when severe drought once again affected a vast area of eastern Australia, the Rural Adjustment Act 1992 and the Farm Household Support Amendment Act 1992 were introduced and tied to the structural adjustment policy of household support and re-establishment provisions. The key features of the Rural Adjustment Scheme and the Farm Household Support Scheme included: concentration on a single program which was to be administered by the state rural adjustment authorities; special interest subsidies of up to 100 per cent under a Commonwealth and state funding arrangement which provided additional support for farmers experiencing exceptional circumstances; support for farmers who were unable to access commercial `carry on' finance to meet their daily family requirements; and the capacity to cash out the balance of the nine-month farm household support grant as a lump sum if the sale of the farm occurred within the nine-month period.

Interestingly, in a speech to this House on 15 October 1991, during the debate on the struggle that the farming industry was experiencing at that time, the then Deputy Leader of the National Party suggested that, if the Labor government really wanted to do something about the cost structure in rural and regional Australia, it should introduce a goods and services tax so that transport costs could be reduced for those people. However, many farmers, transport operators, business or shop owners from the north-east of Tasmania in my electorate of Bass, a traditionally rural area, do not agree with that prophetic statement. They have certainly not seen any reduction in transport costs since the introduction of the GST.

In some instances, overall costs have risen to the extent that some businesses are now refusing to extend credit to farmers. They feel that, by Christmas time, having outlaid expenses for capital equipment for the farm, farmers will not have enough money to pay their accounts at the local shop. So the farmers have to find the cash up front for those goods and services. In fact, the costs have surged to the point where one dairy farmer told us that he had to sell the family vehicle to make ends meet, and he had the horrible experience of his children offering to sell their bikes in order to help the family cope better. Another family were forced to sell the business that had been in the family for generations because they were not able to adequately clothe or feed their children. These are not isolated instances, and I am sure that we could probably all recount similar stories of difficulties in farming life.

A number of initiatives, such as the Drought Relief Payment, the Farm Hand appeal and, more recently, Agriculture—Advancing Australia, have been introduced to try to address the issue of farm poverty. Agriculture—Advancing Australia incorporates the Farm Family Restart Scheme that the Farm Household Support Amendment Bill 2000 proposes to amend. Announced on 14 September 1997, the Farm Family Restart Scheme was described as `the government's key program for delivering improved welfare support to the farm sector, as well as providing adjustment assistance to farmers who wished to leave the land'. The Rural Policy and Communications Division of the Department of Agriculture, Fisheries and Forestry has managed, in conjunction with Centrelink and the states, the structural adjustment package elements of the Agriculture—Advancing Australia package, incorporating Farm Family Restart schemes. Administered by Centrelink, the Farm Family Restart Scheme replaced the re-establishment grants previously made available under the Rural Adjustment Scheme; converted the drought relief payments to the exceptional circumstances relief payments; introduced the Farm Managed Deposits Scheme; and encouraged older farmers to retire, have immediate access to the age pension and pass the family farm on to a younger generation.

Amongst other provisions, the Farm Family Restart Scheme operates as a decision support system for farmers who consider leaving the industry by providing them with access to professional advice on their farm's future viability and on employment opportunities if they do choose to leave the farm. The key features include: income support at the Newstart allowance level—and this payment is available for a maximum period of 12 monthsrecipients do not have to satisfy an activity test and do not have to put the farm on the market in order to obtain that assistance; recipients have a binding obligation to obtain professional advice on the future viability of the business and career counselling where appropriate, and financial support is provided to help recipients meet that obligation; and access to a re-establishment grant of up to $45,000 on the sale of the farm.

Set up under subsection 52A(1) of the Farm Household Support Act 1992, the purpose of the Restart Re-establishment Grant Scheme is to grant financial assistance to eligible farmers on the sale of their farms. The Restart Re-establishment Grant Scheme is a time-limited scheme and originally had a deadline for applications of 30 November 1999. In December 1999, the deadline for applications was extended to 30 June 2000. On 14 August 2000, the government tabled a further amendment to the re-establishment grants disallowable instrument—Restart Re-establishment Grant Scheme Amendment 2000 (No. 2)—which had the effect of extending the grant application deadline to 30 November 2000. For a farmer to be eligible for the re-establishment grant, they needed to finalise the sale of the farm within 12 months of applying for the grant or, if they received restart income support, within 12 months of ceasing income support. Farmers and their partners may have up to $100,000 in net assets and still qualify for the maximum grant of $45,000. The net assets threshold excludes household and personal effects up to a value of $10,000. The re-establishment grant is reduced by $2 for every $3 in assets above this threshold and is not payable at all if the assets of the sale are $167,500.

At 30 June 1999, the Farm Family Restart Scheme provided 1,208 farm families with income support. In total, since the Farm Family Restart Scheme began in December 1997, 191 Tasmanian farm families have received income support. As at 30 September 2000, 41 Tasmanian farm families were receiving income support. During 1998-99, 172 farmers leaving agriculture were paid re-establishment grants. To date, 23 Tasmanian farm families have received these re-establishment grants. A total of $42.6 million of exceptional circumstances assistance was provided as well, with the drought affected Flinders Island area in my electorate of Bass being amongst the areas in receipt of the exceptional circumstances assistance.

Farm Financial Counselling funded 98 counsellors across Australia to provide financial counselling services for farmers, small business operators and townspeople experiencing financial difficulties. In Tasmania, however, since 1 July 1998 only two financial counsellors have been engaged through the Rural Financial Counselling Service—a component of the Rural Communities Program. That situation will continue to 30 June 2001. At this stage, no funding has been provided in the forward estimates for financial counselling after 30 June 2001 whilst the government considers the future of the Rural Communities Program, including the rural financial counselling component. In a time of such change and disruption in the industry, this is a concern that we should not have to be dealing with, and I urge the minister to provide some security for rural counselling.

It is surprising and concerning that the farmers in the Central Highlands of Tasmania—Mr Deputy Speaker Quick, I am sure you will be very familiar with that area—who have experienced the worst droughts in generations, failed to get exceptional circumstances payments in 1997, 1998 and 1999. They finally received some support this year after the tireless efforts of the industry and the Labor Party. As reported in the Tasmanian Country newspaper on 14 April this year, Tasmanian Farmers and Graziers senior Vice-President Scott Ashton-Jones said that the Derwent Valley and the Central Highlands community was `at the end of its tether and needed any help it could get'. According to the Farmers and Graziers senior vice-president, even though the area had a clear case of financial difficulty, feed shortage and low productivity, the National Rural Advisory Council representatives who had visited the region had refused to accept the region's need for federal government exceptional circumstances assistance. In referring to the Central Highlands and the Derwent Valley area of Tasmania, Scott Ashton-Jones said, `It appears that the exceptional circumstances assistance almost cannot work for a region like this.' He said, `It therefore ought to be reviewed.'

The overall scheme has been reviewed. In 1999 Agriculture, Fisheries and Forestry Australia commissioned the South Australian Centre for Economic Studies to undertake a mid-term review of the Farm Family Restart Scheme. The mid-term review's findings have been used to inform the changes proposed by this minister. Completed in March 2000, the review's purpose was to evaluate the whole of the program and its separate elements, report on the program's progress and to provide comment against key questions, such as: what have been the key outcomes of the program; how effective has the program as a whole, as well as its individual elements, been in delivering its key objectives; have the Farm Family Restart Scheme's elements brought about positive change for participating farmers; and what has the new provision of income support achieved for farmers? The review's findings included that at least 28 per cent of Farm Family Restart Scheme clients had previously accepted exceptional circumstances relief payment and that drought and low commodity prices, which contributed to debt problems, were the most significant factors the farmers cited for accessing the Farm Family Restart Scheme. The review found that 30 per cent of income support recipients had farms of less than 100 hectares, and that the distribution of income support recipients was dairy, 26 per cent; sheep-wool, 23 per cent; and beef cattle, 23 per cent.

On the issue of re-establishment grant recipients, the average age of grant recipients was 44.7 years and they had farmed for an average of 19.3 years. One-third of grant recipients had an asset level of less than $50,000, two-thirds below $150,000, and younger farmers possessed fewer assets on average. Suggestions from the South Australian Centre for Economic Studies review included extending the time to sell the farm and that farmers deciding to leave farming should be encouraged to access career training and education, and advisers should promote that requirement more actively. For grant recipients, 70 per cent of farm enterprises were well below 200 hectares, with 43 per cent below 100. Existing farmers often said that their farm was too small to remain viable in the current market, and 71 per cent of farmers exiting farming resided within the same postcodes after leaving the farm, with almost half expecting re-employment in the agricultural industry.

The review also found that farms in three states—Victoria, New South Wales and Queensland—were more likely to participate in the Farm Family Restart Scheme relative to the state's share of farming population, while farmers in South Australia and Western Australia were very low users of the scheme. The overall impression gained by the Farm Family Restart Scheme review consultants was that many farmers simply do not want to leave farming. Whilst the Farm Help Program and the Farm Family Restart Scheme have explicitly been tied to structural adjustment policy because of the combination of household support with re-establishment provisions, the scheme does not separate farm and family, especially as household support payments are deducted from any subsequent re-establishment grants. Only 10 per cent of farmers who access the Farm Family Restart Scheme make a decision to leave the farm, whereas 90 per cent of Farm Family Restart Scheme clients consider the scheme as providing income support for the 12-month period or as a means of access to planning, counselling and management, and other professional assistance aimed at seeking advice on how to maintain and develop the farm, which may not have been affordable.

The review reported that farmers enjoy their lifestyle and believe that their conditions will improve and that they have no identified alternative career to farming. The findings of the mid-term review of the Farm Family Restart Scheme have been used to inform changes as proposed by this bill. In the 2000-01 budget, the government announced it would provide $111.2 million over four years to continue the Farm Family Restart Scheme and subsequently included a retraining grant of $3,500, available to those farmers and their spouses who receive a re-establishment grant; case management to farm help clients, including the mandatory requirement that an activity plan be developed; and an increase of $10,000 in the net assets threshold for re-establishment grant recipients. I want to focus on just how strongly we support the retraining grant and the ability to offer voluntary case management. It will be interesting to see the manner of provision of this support, because obviously outcomes must match the intent.

As you know, Mr Deputy Speaker, Labor will be supporting this bill. The government made election commitments and set targets which have not been taken up by the industry. I believe there had been an expectation by the government of a take-up of around 10,000, but that has not occurred. We are hopeful that the enhancement that this legislation provides will help struggling farmers with some more realistic and achievable options in a more supportive framework.