Mr ANDREN (5:58 PM) —I listened with interest to the member for O'Connor (Mr Tuckey) and the points he raised. He rightly points out the need to protect the family farm as part of our rural social fabric; it is essential. This move by the government is very welcome, although there are aspects of it which are not, which the member for O'Connor did point out. It is a bit cruel for the opposition to paint it as a hoax because, as the member for O'Connor points out, whatever the weakness and whatever the need for some sort of amendment, it is very much the first time government has initiated such a move.

The Labor opposition should be mindful of that fact because it had an opportunity over 13 years to introduce similar measures over a period of extreme hardship on the land when the commodity crash of the middle to late 1980s severely impacted on the viability of the family farm. It is a little cruel of Labor to use words such as hoax.

Notwithstanding that, when this AAA package was announced late last year it was warmly embraced by the rural community. It addressed the concerns of the rural community in areas like drought assistance and family support. In some key areas—such as rural counselling and drought assistance—it is certainly already playing an important role.

A key part of the package was arrangements for the intergenerational transfer of the family farm. A half million dollar ceiling was placed on the net value of the property. While it did seem a fairly low figure, I was prepared to support it and wait for the response from my constituency. I did not have to wait long before it was made clear to me that the levels set under this package were inappropriate and would not do much to aid the transition from the family farm to retirement of those farmers out there caught in the asset rich and income poor bind that affects so much of our rural community.

Farmers under this scheme will ostensibly be able to gift their farm to the next generation and access the pension in a window of opportunity of three years. However, the catch is that the property's net value is set at half a million dollars, and the inheriting child must have earnt the majority of their income from the property over the last few years. I understand Centrelink is strictly applying this ruling. It seems a classic catch-22: farmers must have earnt the bulk of their income from the very farm that is unable to support their children, so they go off-farm to earn a living and this initiative disqualifies them from accessing the scheme. That is as I read it. It makes not a lot of sense.

A farm with a net value of half a million dollars would be absolutely flat out supporting the ageing farmer and his wife, let alone the children too. Most of the children have been off farm for several years trying to earn a living and working weekends on the farm to help mum and dad. A family farm of this value is just unable to support two generations. This scheme is seen as being completely inadequate by many farmers out there who are finding the net value of their properties beyond the half million dollar net limit, yet by any judgment they should qualify for assistance under this legislation. It is better than nothing, but it is not all right to say it is just better than nothing. If we are serious about meaningful assistance, then we have to have a policy that lifts this threshold to a meaningful level.

According to the Australian Pensioners and Superannuants Federation, few of the people who actually need to avail themselves of the scheme will be able to do so in practice. While welcoming some aspects of the scheme, such as allowing recently retired farmers to participate, recognition of widowed farmers and the five-year retrospective gifting, the Australian Pensioners and Superannuants Federation suspects, as do I, that there is real justification for regarding this scheme as inadequate, good on paper but in reality not extending to those people who by any judgment should qualify.

I must say that I am not absolutely critical of all aspects; I am just saying the threshold needs reappraisal. I want to put on the record a few of the complaints that I have had. Pat Manning, a 77-year-old farmer from Vittoria near Bathurst, rightly asserts that no farm of $500,000 net value can support two families. He sees this package as disappointing. Bruce Whalan from Oberon says his son has been forced to get most income off farm in recent years, so does not qualify. As well, the Valuer General says his property is worth more than half a million dollars, although his son has obviously not been able to live off that farm. He says his son has played a significant role in the farm operation over many years, including management, but has, by necessity, made his living by working at other employment.

Malcolm Martin from Coonabarabran says the AAA package is no saviour and, according to him, less than two per cent will qualify for a pension under the scheme. Some of the figures that I have seen suggest that he is a little bit harsh in that percentage, but he makes the same sort of point. There are other examples that have come across my desk from farmers who believe this legislation has not got the substance it requires to assist farmers leave the land, leave a viable property with the kids and retire with dignity. The NFF, in their press releases on this, said:

The Scheme is targeted at those families whose farms, although capable of supporting one generation, have become marginal as they are being required to provide a living for two or more generations.

NFF believes that the Retirement Assistance scheme should be changed so that the limit on assets is increased to $800,000 . . .

NFF believes that the limit should be increased to the amount that a pensioner can earn under current legislation without affecting their pension entitlement, currently about $20,000.

Today, the NFF praised the suggested Democrat moves in the Senate. The NFF said:

The National Farmers' Federation has welcomed amendments to the Retirement Assistance for Farmers Bill, foreshadowed by the Australian Democrats.

The Democrats' amendments will mean that a home owning farming couple, with no other financial assets, would be able to gift a farm worth up to $678,500 and receive a full pension, or worth up to $877,500 and receive a part pension.

NFF also welcomes the Democrats' proposed amendments to increase the income test to $20,000 . . .

The Senate Community Affairs Legislation Committee considered the Social Security and Veterans' Affairs Legislation Amendment (Retirement Assistance for Farmers) Bill 1998 . In his minority report on the bill, Senator John Woodley said:

The joint advantages of such a scheme, from the Democrats' point of view, are that it would both raise the assets threshold slightly and at the same time introduce a tapered withdrawal of payments rather than a sudden death withdrawal as the scheme currently proposes.

He could have chosen his words a bit better than that, but the idea is that, rather than chop it off at the pass, it should be a tapered scheme. To me, that makes more sense. Senator Woodley also said:

The Democrats believe the legislation should be clarified to ensure that the exceptional circumstances mentioned in proposed section 1185B(d) include, but are not limited to, those situations in which a farmer had been issued with an `exceptional circumstances drought certificate'.

This would ensure that descendants forced to work off farm due to the financial impact of drought will not be excluded from the scheme.

Talking of drought, it is only a few weeks since we witnessed the ravages of the drought that was at least as bad—particularly in the central parts of the state—as that between 1981 and 1983, and probably as bad in many places as the drought of the mid-forties. That drought still has full grip in several areas, including the seat of the Deputy Prime Minister (Mr Tim Fischer), as he mentioned the other day. Anyone driving in the south-east of this continent in recent months could only be horrified by the stark and barren landscape. The sale of breeding stock is well documented. The lack of ground water on even so-called safe country on the slopes and tablelands is absolutely alarming, and even recent rains have done little to alleviate this. It is against this backdrop that farmers are trying to work out their options. They want not only to secure their own dignified future but to leave the farm in the least unencumbered fashion for their children.

To that end, the debate on who is to blame for the lack of drought assistance to farmers is very revealing. The insulting drought package offered by the New South Wales state government underlines how out of touch the Carr government really is and was on that issue. Some $2 million of the $3 million assistance was for water conservation. If it was not such a critical situation that piece of policy would have been a joke. At a time when dams were empty and there had been no sign of rain for months, farmers were not interested in a water conservation scheme; they wanted help to move their stock and get fodder. Stock and transport subsidies should be part of any genuine drought assistance package.

The federal government's exceptional circumstance assistance program is welcome, but we really need to get serious in this country about long-term drought proofing. In recent months I have sent a proposal from a local seedling producer to all state ministers, federal ministers and opposition spokespersons for the serious study of old man saltbush as a drought fodder alternative. Trials in Saudi Arabia and near Gulargambone, among other places, have shown the enormous potential of this plant for drought proofing. It is not the downgraded saltbush that has been trialled; this operation has brought back into this country from South Africa the genetic stock that went there at the turn of the century. It includes all of the qualities that you see in the literature from last century when in those days it was an absolutely essential farm management tool.

I urge this government, and others around the country, to look seriously at this proposal from this particular operation. This man is not hoping to make a fortune—he is only the seedling importer—and it is up to nurseries and farmers to take it on. The proposal is for low interest loans—very modest government support—to get these trials under way. There are those who say saltbush has been trialled and found suitable only in certain areas; this operation rejects that and urges that it be looked at carefully. Unless we become more proactive in exploring large-scale meaningful drought proofing options, we will continue to be trying to fund emergency schemes for farmers when the next drought arrives.

Another issue is the impact of drought on the rural communities, villages and towns, and the need to examine what emergency measures we might introduce to maintain the viability of businesses such as general stores and rural supplies during periods of prolonged downturn. It would seem these people are somewhat asset rich but become impoverished and their survival is every bit as important as the farmers they serve in maintaining that rural infrastructure, the fabric of the rural society, because if they go down the tube so too does that rural community.

This would be an investment in the social and basic infrastructure in the bush in the same way that we can find help for the farming community when required. So this bill does cover some of the basic problems it set out to solve, but does not extend to other than the farm community—and even there has the inadequacies I pointed out. There is an argument for a similar concession to the non-farming small business person or the village and rural business. They too should be aided to transfer their business under the same guidelines to the younger generation. Continuity means everything to rural communities, where the tendency remains for the younger ones to go elsewhere seeking a livelihood. Such an extension of this retirement assistance for the non-farming rural community appears to me to have great merit.

I look forward to meaningful amendments to this bill to make its coverage more realistic and more beneficial. I applaud the government on its initiative. It is the first time such a move has been introduced. It is sorely needed. It is welcomed out there in the community. They applaud the concept but urge the government to look more deeply at how meaningful it will be and how many people will actually be assisted. It is a great idea at the moment but, as Australian Pensioners says, the scheme could be criticised as being a Clayton's. I would not go quite so far as that. It also says that, while looking good on paper, few of the people who need to avail themselves of the scheme will be able to do so in practice. I do agree with that. That is the inherent weakness in the bill. I urge the government and the Senate to accept the Democrat amendments.