Mr ENTSCH (6:11 PM) —I would first of all like to applaud the comments of the member for Calare (Mr Andren) in that he has looked at a lot of the very positive aspects of this legislation, rather than focusing on a few of the negatives. I applaud him for doing that because I think it is important that we do look at significant reform in the farming sector to help a group of people, very important Australians, who have been struggling for a long time. This type of measure is certainly intended to assist and support them to continue their operations.

In my view, this Social Security and Veterans' Affairs Legislation Amendment (Retirement Assistance for Farmers) Bill 1998 will certainly help to address some of the needs of the farmers who have reasonably low asset bases and, as we all know from the statistics, very low personal income bases. In fact, I do not believe that there would be anybody in metropolitan Australia who would be prepared to work for the very low wages that most people in the farming community accept as a way of life. I think it is also important that they be able to transfer their family farm from one generation to the next without impacting on their eligibility for the age pension. The amendment bill rightly takes into account this need in the farming community, while limiting the eligibility and period of opportunity for which the family farm may be gifted.

In my electorate of Leichhardt we have a very strong farming base, particularly in the sugar sector. In fact, Far North Queensland was built on the back of the sugar industry with many of the old established farms having been in the family for many generations. I certainly support any measure that will enable a more equitable social security system that is extended from metropolitan Australia into the farming sector, and particularly one that takes into account the special needs of the farmers.

Before I expand on the details of the amendment bill and some of the eligibility requirements, I believe that it needs to be fully explained to the farming community. It is important to reflect on the circumstances that have led to the necessity for this amendment bill. As mentioned, this amendment bill will focus on the need for the Australian family farm to be transferred from one generation to another without affecting the eligibility of the pension-age farmer to receive retirement benefit. This initiative will focus on those farmers who experience the most financial hardship.

It is true to say, though, that the successful transfer of the family farm from one generation to another affects all farming families, regardless of their net worth and annual income. However, for the families that are struggling to make ends meet, the inter-transfer advice, which can cost upwards of $3,000, often makes the process prohibitive. This has led to the current situation where farms that can only adequately support one family are having to support two or three families because, if the transfer of the family farm takes place under the current guidelines, that would make the pension-aged farmer ineligible to receive a pension for up to five years.

For many families that want to stay on the land, this predicament has meant that if this amendment bill is not enacted they would be forced off the land like many farming families before them. The health of the rural community is a national issue and one which, if left to deteriorate, will impact on all Australians. The family farm certainly is a unique organisation, one that provides food for the nation and enables small business to prosper in rural communities.

It is certainly too easy to forget about the predicament of people on the land. We certainly have to appreciate that their need is very significant, irrespective of the type of farming involved—whether the farmers are involved in broadacre cropping, cattle, sheep, dairy, forestry, horticulture, aquaculture or in the sugar industry, as in my electorate. The amendments that we are offering here will complement the AAA package to provide appropriate recognition and assistance for the rural community, and the amendment bill will enable access to retirement benefit for eligible farmers.

As the member for O'Connor (Mr Tuckey) raised earlier, I think the biggest problem in this legislation is the limit of half a million dollars that it puts on the value of assets. I know that the member for O'Connor was making reference to the wheat industry. In the sugar industry, for example, one harvester alone could cost anything up to $300,000 or $400,000. It is not uncommon to spend $200,000 to $250,000 on a single tractor. So you can see that it does not take long for the value of that asset base to appreciate significantly.

Even if you get out of the cane areas into the pastoral areas, given the remoteness of some of these areas, it is necessary to provide accommodation, for example, for anybody that you have working on the place, so you can be looking at a lot of outlaid money which continues to build up the value of that asset. Any property at all where you basically put in a house, buy a tractor and maybe buy a second-hand four-wheel drive, you have reached the $500,000 threshold and, as a consequence, you are starting to have problems. I know most of the cane farms in my area have nothing under about $1½ million in assets, so it makes it difficult for them to access this benefit.

But that seems to be one of the more negative aspects. It was estimated initially, when this was put up, that there were some 5,200 farmers who may have met that asset and income limit and that this would flow through to the estimated initial take-up rate which was estimated at about 2,100 farmers. I am disappointed to hear that there were in fact only 14 farmers to this date who have taken up this benefit. I think that that is a clear indication that something needs to be done with that asset base to allow farmers who have a need to access it to do so, and I certainly encourage the government to consider that.

There is a window of opportunity over a three-year period. It started on 15 September 1997, but it will also apply to those who transferred legal title of their property in the five years preceding that date. So it will certainly give people in that area an opportunity to access this. Another criteria is that farmers must have owned the property for at least 15 years or have been actively involved in farming for 20 years. Farmers must have had an average income of less than the age pension over the preceding three years from both farm and non-farm activities.

Again, if the farms are that viable that they are paying a level of income that is significantly higher than the pension, I can understand farmers' reluctance to go onto the pension. By having a restriction like that, I am sure it will be providing access only for those most needy. I certainly have seen situations in my electorate where farms have been very asset rich but, unfortunately, because they have not been able to transfer the farms, the farmers have lived on very meagre incomes, sharing their homes with their elderly parents because they cannot afford to have the parents move. Their asset base means they have absolutely no opportunities to access the pension—or any government subsidies, for that matter, regarding housing or anything else.

The income test is currently set at $15,000 per individual. This level of assessment excludes income support from Centrelink or the Department of Veterans' Affairs and payments received under the Farm Household Support Act 1992 such as drought relief payments. Farm losses can be offset against income from other sources. Farmers must reach the pension age before 15 September 2000. In the case of a married couple, only one member has to reach retirement age at that time, regardless of which partner has legal title. Where the transfer happened before 15 September 1997, the pension will be backdated to 15 September 1997, and all transfers after that date will be paid from the date of the transfer.

I think it is also reasonable that the next generation must have had an active involvement in the farm over the past three years, although you will find in a lot of rural communities or farming communities that is certainly the case. In some instances, a lot of the kids, unfortunately, have been forced off the land, but they do maintain that active interest in it whenever they can, even though the farm cannot support them. This will be a window of opportunity for these kids to get back into the rural community.

Another good feature is that the scope of eligibility for transfer is very wide. The application to transfer to a niece or nephew would be considered. The eligibility criteria also recognise that the younger generation may have been off the land to undertake employment and to sustain the farming operation. That will be taken into consideration. This bill will certainly enable bona fide farmers to continue to be productive and remain part of their community. The bill will help farming families on the land. The extended family will certainly be more secure, and the rural communities will directly benefit from this initiative.

In closing, I would very much encourage the government to look very closely at the asset criteria. If that can be adjusted to a point where it can be accessible for a broader range of farmers, it would put the icing on what is really a very good initiative from this government. I commend the bill to the House.

Debate (on motion by Mr Adams) adjourned.