Mr ADAMS (8:01 PM) —This bill, the Social Security and Veterans' Affairs Legislation Amendment (Retirement Assistance for Farmers) Bill 1998 , is a bill to allow generational change—to help farmers who are approaching pension age to retire and hand over to their children so that they can get a pension. It is a rather obscure bill because the eligibility under it is very tight and few, we believe, will be able to make use of it. I understand that the shadow minister said that 14 farmers were all that could be found to make a claim under this legislation. That is hard to believe but I think, with the tightness of the regulations, that is probably all there will be. Anyway, it is going to be very hard for people to utilise this piece of legislation.

The history of this legislation goes back to a special rural task force that was set up and that reported to the Prime Minister (Mr Howard). The task force, unlike the tax one, actually made recommendations, because there was a recommendation from this task force which said:

To facilitate the inter-generational transfer of farm assets a short term (for example, two years) moratorium on the five year gifting provisions be applied for farmers planning retirement (from 63 years) or of pension age to give individual families a one-off `window of opportunity' to plan and transfer the family farm.

Then it went into some conditions. The Prime Minister decided in December 1997 to announce a rural package which would in part respond to this recommendation. All we have now is a very small number of people who are going to be assisted by this package.

Mr McGauran —How do you know that?

Mr ADAMS —What we have read in this bill shows that that will be the result. I do not believe it will be any more people than that.

Under the current Social Security Act, if the farmer disposes of assets over $10,000 then the value of the assets over that threshold continues to be taken into account under the pension assets test for five years. It is still counted when someone is assessed. The purpose of this bill is to try to assist those farmers who are approaching pension age and who want to gift a farm worth less than $500,000—half a million dollars—to their children by exempting the value of the farm from the pension assets test. The scheme will apply only to farm assets disposed of before 15 December 2000 and where the person or their partner reaches the pension age before that date. It is a pretty tight window of opportunity here. It is a shame the member for Gippsland (Mr McGauran) has left his place. I hope he is listening.

Mr O'Keefe —He is confirming what you just said.

Mr ADAMS —Yes, he probably is just working out that the Treasurer (Mr Costello) and the Treasury have won again and that this bill means nothing to farmers. That is about all the rural community has got out of this government: nothing.

Farmers have to qualify, and that means they have to have had a legal or equitable interest in the farm continuously over the last 15 years. They or their partner will have had to invest significant amounts of labour and capital. `Significant amounts' is the operative phrase in that clause, and that will be defined, I guess. They have to have derived a significant part of their income from the farm over that period, or have acquired the farm assets in question before 15 September 1997.

They or their partner would have to have been involved in farming in Australia over the last 20 years, and over that time they or their partner would have had to have invested significant amounts of labour in farming and have derived a significant part of their income from farming. `Significant' plays a pretty important part when someone is assessing who is going to get access to the results of this bill. The farm cannot be worth any more than $500,000. You must have had the farm for three years, except in exceptional circumstances, and someone will have to judge what is exceptional. The person's ordinary income from farming and other sources during the three years in question must have been less than the maximum base rate of the age pension. These criteria mean that the number of eligible people is just getting smaller and smaller every time you read a line or two of the bill.

So far as I can make out, this bill is current for only three years and I am wondering if it is specifically written for somebody in this House who is probably going to retire. Maybe the honourable member for Gippsland (Mr McGauran) has finished and his career is over, so he is going to leave us at the next election and needs this to pass on to his children. I really do not know how old the member for Gippsland is, but I think he has aged in recent years. I know his brief experience in executive government aged him considerably and probably taught him many lessons. So, if he is going to retire, maybe this bill was written for him. It is a pretty sloppy piece of legislation and it could do a lot better.

You always get arguments with bills like this, as I did the other day. I was talking to a fisherman from my electorate who has a $500,000 fishing boat which he inherited from his father. He wants to get out of the fishing industry and he has to get his son into the business, so they are going to have to refinance the fishing boat so that the father can retire. Those situations apply in industry and it is very difficult. It means that we have to teach people to plan retirement a lot better than we have in the past.

There is a problem in helping those who have a legitimate problem and it should extend to all those who wish to quietly retire and let their children continue to operate the farm. There are a lot of small businesses other than farms in rural communities which also experience difficulties. Those people also look for some assistance where they have an asset but not a lot of cash flow, and I am sure they would like to benefit from a bill exactly the same as this one. The non-farm small business person, the owner-operator, would also find it very difficult to transfer their business on to the younger generation. There are a lot of such people in country areas.

As far as I could make out from the very few inquiries that I made, no-one is eligible at the moment for these stringent guidelines. The word `significance' and the question of its interpretation will be one of the keys. I believe that it has been building up false hopes for some people, and it has been very unkind of the government and some of their members to do that, because I believe that a lot of people will not be able to meet the guidelines. This is the Prime Minister's sleight of hand: `Look, folks, here is a special scheme for struggling farmers. Oops, sorry—it's gone now. It's too late. Bad luck.' If they seriously want to do something for farmers, it will take spending some money to assist them.

There are older farmers in the community who genuinely do need to benefit from a scheme like this to allow young farmers into farming. There are some people who do not get an opportunity to make on-farm decisions until they are in their 50s. That is a little late—they may be losing their enthusiasm for new ideas to upgrade the farm into a modern way of working. There is a generation of thinking lost, and maybe that is part of the problem we are having getting properties into drought proofing and looking at new opportunities for the future.

We should be doing this better and we should be doing it properly. It should not be a con on the rural community, as are most of the things that this government does. We need to work on getting people to plan for their retirement from the small business sector so that we do not have to try to come up with schemes like this, which actually does nothing that could not be better achieved in other ways.

I fear for the older farmers who need to get off the farms and for the younger ones who want to take over. They do have a problem. We could do a lot better with this bill, and I believe that this bill will come back and bite the government sometime in the future.