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Wednesday, 23 June 2010
Page: 6311

Mr ADAMS (12:56 PM) —I would like to deal with a couple of matters that the member for Calare dealt with. I would have liked to have seen a little more spirit of the future from him. I would have liked to have seen him looking to the future and looking for new ways. His point about exceptional circumstances not causing any problems I think lacked a little bit of political thinking and a little bit of political giving. There are people who sometimes cannot see their way through. There were people who were in debt before exceptional circumstances and before drought came to their properties and to their enterprises. One way of looking at new ways in this field is to try to find new direction. Exceptional circumstances payments actually pay people who are in debt and subsidise the debt on those enterprises. Those who may have worked hard to drought proof their property and to build risk management into their processes do not get any payment. They may be next door to somebody who does. This is a part of thinking that we have to move forward on. We have to be considerate of the nature of the human beings that are involved in the enterprise, but we have to have efficiency in the process.

The Productivity Commission’s main role is to make sure that the country is spending money wisely and is being productive. It is taxpayers’ money that is being spent. Therefore, the nation has to win from the programs. We have to make sure that that comes into play. It would be good if we could get some good modern thinking from the other side of the House. I am sure that not everybody would accept what was said by the last speaker.

The Farm Household Support Amendment (Ancillary Benefits) Bill 2010 inserts a new part 9D into the Farm Household Support Act 1992 to treat, for welfare related purposes, farmers receiving income support under a pilot of drought policy reform measures as if they were receiving exceptional circumstances relief payments. The pilot represents a dramatic shift in the way governments help farmers deal with the challenges of the future, from crisis management to risk management. The old system provides the most assistance to farmers who are in the most debt and fails to recognise those who have made the tough business decisions to stay out of debt. We need to reward those who are innovative and into using new ideas and moving forward, not those who may be into old thinking and who are unable to make decisions of a tough business nature.

This legislation very much takes heed of the findings of part of the Farming the future report, which was submitted to the parliament earlier this year. Drought relief as such has played its role and, although we need to phase out exceptional circumstances relief, we do not want to ‘chop them off at the socks’ as the president of the AIAST, Mr Geoff Thomas, said. He went on to say, however:

… there is no question that it has caused less adjustment than there would otherwise have been.

It would have been good if the National Party member for Calare had acknowledged that maybe that process had occurred. Mr Thomas also said:

Even some of the people who have received it—

exceptional circumstances payment—

would admit privately that it probably has not done them a favour … because it has reduced their capacity to adjust.

In the report, the pork industry, through Australian Pork Ltd, was quoted as saying:

… future drought policy should be aimed at assisting the agricultural sector to adjust to climate change and prepare for extreme climatic conditions.

This new approach to be trialled in Western Australia will help to make the farming sector more resilient and addresses mental health issues in farming communities. Importantly, the pilot will not affect farmers currently receiving income support payments and interest rate subsidies under the old exceptional circumstances scheme, but we must start talking about risk management instead of drought support. The National Rural Advisory Council will continue to consider proposals for exceptional circumstances declarations submitted by state governments and to reassess current declarations coming up for renewal.

The pilot will run from 1 July 2010 to 30 June 2011. It includes the farm family support measures which provide income support to assist eligible farmers facing hardship with basic household needs. Assistance is available regardless of the cause of hardship. The farm family support payment will be delivered through an executive scheme arrangement under the Financial Management and Accountability Act 1997, rather than being fully legislated, due to the complex nature of the income support legislation and the short-term nature of this program. Guidelines will be published which will provide details of the operation of the executive scheme.

The government wishes to ensure that the recipients of farm family support during the trial can access the full range of so-called ‘ancillary benefits’ which are already available for exceptional circumstances relief payment and to other welfare recipients under existing legislation. As it is not possible to use the executive scheme arrangement to provide the full range of ancillary benefits to recipients, legislation is required to ensure those will be available.

In order to meet the objective of making Commonwealth welfare assistance to this group consistent with exceptional circumstances relief payment, the bill will amend the Farm Household Support Act 1992 to effectively treat the farm family support as if it were exceptional circumstances relief payment for the purpose of providing access to a range of measures—the ancillary benefits referred to earlier—that are not available as part of executive scheme payments. These include an automatically issued healthcare card and some concessions relating to income and asset testing for student allowances paid to, or in respect of, the student children of recipients.

Ancillary benefits available to exceptional circumstances relief payment recipients will automatically become available to farm family support recipients. This will be achieved through the linkages in the Farm Household Support Act 1992 to other legislation—the Social Security Act 1991, the Social Security (Administration) Act 1999, the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, the Small Superannuation Accounts Act 1995 and the Age Discrimination Act 2004. The bill does not make any amendment to any legislation other than the Farm Household Support Act 1992, but we must keep looking at the way government can drive change to help farmers help themselves in future. Although it is a gradual process, it is good to see the start put forward by this bill. Provisions of this bill can only be applied in respect of payments and services made under, and for the duration of, the Farm Family Support Scheme, an executive scheme created under the Financial Management and Accountability Act 1997.

The drought policy reform pilot will test a comprehensive package of drought reform measures. These are designed to: (a) support farmers in managing and preparing for future drought and a changing climate; (b) increase the resilience and capacity of rural communities to cope with adversity; (c) better coordinate social support services in rural areas; (d) help families meet immediate basic household expenses during financial hardship; and (e) connect farmers and former farmers to discuss opportunities outside of farming. As we know from many reports, farmers always underestimate their skill base and their ability to change direction especially, possibly, after generations on the one property.

Farm Family Support is a program under the drought pilot which provides other key elements of: (i) income support paid at a fortnightly rate based on the Newstart allowance base rate to help farmers and their families meet basic household needs; (ii) case management to assist farmers to develop a plan to identify action which will improve their financial position on-farm and off-farm; and (iii) support for the implementation of these plans with assistance of up to $2,500 to fund the cost of financial advice to assess farmers’ long-term financial positions and $5,000 to fund professional advice and/or training.

The Farming the future report concluded that drought policy should be about developing industries and enterprises that can cope with drought, and both sides of the House would support that approach. It emphasises capacity building and long-term resilience rather than short-term survival. Climate change is an issue we have to contend with, and farmers are on the pointy end of that change. We have to ask ourselves how long we can subsidise farms with old methods and old mechanisms. We must come up with ideas whereby we can move our rural producers into a phase where they are discussing risk management in their farming practices, new processes, sustainable methods and recycling so that nothing is wasted.

Our land is fragile, but it can be strengthened and the soil can be assisted and improved. But there is a limit to some of the farmlands and these limits have been pointed out before, even as far back as the early 1800s. Drought has always been a part of the picture and we need to understand it so we can live with it, survive it and work within it. We need to help to innovate and fund opportunities for farmers to do this. Funding interest rates on debt where, possibly, people do not make decisions that they need to is not moving us forward in this country.

In the Farming the future report of the House committee, the committee made the point that change is not easy and we need to fund bodies like Rural Alive and Well, which is a support and counselling service in my state of Tasmania and in my electorate. It is leading in new ways of delivering these processes of help and support for the farming communities. It deals with real people by going down the track, sitting at the kitchen table, having a cup of tea and offering support, which is usually done by a local person that knows the region and usually knows the family and their needs.

A key role of the service is to connect the support services of government with those people so that they get the services and the help that they need, and then also to keep an eye on the situation and make sure that things are happening and that there is change, help, direction and opportunity for those people. Exceptional circumstances are sometimes harming people and are not really giving them a way forward or helping them change and make the directions that, possibly, they should. Farms need to build a business plan. Farmers need to look into that sort of operation, work to achieve the plan goals and to accept the true risk of business and understand that risk is a part of enterprise. Government and, of course, the Australian people are better served by a robust farm sector using modern business practices than by paying to keep invalid or unviable enterprises going that are not re-adjusting as they need to.

There are many, many farmers who are looking for new directions and new ways, especially younger ones, and they might need a bit of help to do that. This is the way that government should be funding assistance to the rural sector to make it a robust sector and to bring people forward into new ways. We know the challenges of water into the future. We know the challenges of productivity and that the rural sector will have to use less water but increase productivity because the need is going to be there for us to meet those demands into the future. We have that opportunity and it will need government to be innovative and find new ways to achieve that.

This bill gives support to people in a trial that is endeavouring to do that. It is a very good intervention in an innovative way, and I congratulate the minister and the department for bringing it forward. I wish those involved with it the best of will. I certainly hope that we can get strong support for innovation and new ways of thinking in the rural sector in Australia so that we can go forward with this sector as they adjust, as do many other sectors of our economy.

The taxpayer pays for exceptional circumstances. We have to make sure that there is a public good at the end of the line. In that sense we have to show that we care about people and assist people in whatever way we can to go forward. We need to make sure that they are not staying where they probably need not stay and that they do readjust for the future. I think this bill does that very well and I commend it to the House.