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Tuesday, 18 March 2014
Page: 2229

Mr McCORMACK (RiverinaParliamentary Secretary to the Minister for Finance) (13:09): May I at the outset commend the member for Hotham for her generous and heartfelt words and for her support for this very important legislation, the Farm Household Support Bill 2014 and the Farm Household Support (Consequential and Transitional Provisions) Bill 2014. I might add that her predecessor, Simon Crean, was also very interested in regional Australia. I had a lot of time for Simon Crean, as the member for Hotham, for the role he played in regional Australia. I hope that his successor follows in his footsteps by also playing a good productive role in regional Australia. We certainly welcome the points the member for Hotham just made.

However, I must take issue with some of the things said by her colleague Mr Fitzgibbon, the member for Hunter and shadow agriculture minister. He downplayed the ability of Australian farmers to support the Asian century by being a food bowl for the Pacific rim, supplying the growing and burgeoning markets in Asia. By 2050, the world's population will reach nine billion, if not more. Certainly Joel Fitzgibbon mentioned that, but he said he thought that the Asian food bowl was a misnomer. He thought that we would not be able to produce the volume and, in his words, 'double the output' to support the growing protein need of the Asian middle class, but we would if we had the right policy settings.

The coalition are doing everything we can to provide those policy settings. We went to the last election with a plan to develop a strong five-pillar economy of which agriculture was very much one of the most prominent parts. In the last parliament, the 43rd Parliament, we saw an attack on agriculture, an attack on our farmers by the Labor government. We saw the live cattle export fiasco and the slowness to react to the Asian bee incursion, but the very worst was what Labor did, in cahoots with the Greens, with the Murray-Darling Basin Plan.

I probably spoke on water more than anyone else in the last parliament. Perhaps I harped on it but it is important. As Samuel McCaughey, the founder of Australian irrigation, certainly the founder of Riverina irrigation, stated, 'Water is a more important and valuable resource than gold.' He recognised the need for water and he pioneered the irrigation channels which now flow throughout the Riverina providing wonderful fresh food and fibre for the growing Asian market and feeding and clothing our own nation. Sir Samuel McCaughey's words should never be forgotten, certainly not in this place where we set policy hopefully to help our farmers and our irrigators. That is what these bills seek to do.

At an international food summit speech, former Prime Minister Julia Gillard raised the question: could Australia become the new food bowl of Asia? She certainly thought the answer was yes. She revealed to the crowd her vision for the country to become a global superpower, to meet the needs of a rapidly emerging Asian population. It would involve building our food processing industries so that they can supply Asia's growing consumer markets and developing research technologies and logistics to strengthen irrigation. I repeat: the former Prime Minister said strengthen irrigation, grow higher yielding crops and improve food safety. Her remarks angered leaders in the agriculture and the food-processing sectors who argued that the federal government's policies did not align with that idea—and they were certainly right.

Victorian Farmers Federation President Peter Tuohey said that the looming carbon tax and the Murray-Darling Basin Authority were expected to have disastrous effects on agricultural people—growers and farmers in Australia—and he was certainly right. He said that the current MDBA plan will remove 30 per cent to 35 per cent of water from irrigators who produce more than 40 per cent of Australia's food. We know that the carbon tax continues to be a huge impost on our farmers, on the people who grow the food to feed our nation. It certainly rings true today. Julia Gillard was right and her own party should have put in the policy settings to enable what she then perceived to become a reality.

The Murray-Darling Basin Plan was a disaster. Fortunately, New South Wales has just come on board. They held out for a better deal, wisely so, so that they could get the sorts of policy settings from a government that actually cares about irrigation farmers—that is, the coalition—to make sure that New South Wales got the very best deal. The parliamentary secretary, Senator Simon Birmingham, whose portfolio area includes water, came out and allocated an additional 10 gigalitres of environmental flows to the Gwydir Valley for productive use. If there had been bipartisan support—as there is with the Farm Household Support Bill—for irrigation, as Labor claims there now is, why did Senator Birmingham's idea get attacked in January when he allocated that additional 10 gigalitres of water? It is because Labor says one thing but then does another.

I am very pleased to support this bill today. The Farm Household Support Bill 2014, in conjunction with the Farm Household Support (Consequential and Transitional Provisions) Bill 2014, serves to repeal the existing Farm Support Act 1992. It provides a farm household allowance and transitional farm support payments—the interim FHA—from 3 March 2014 to farming families in need, and there are many of them. The government recognises that the Farm Support Act 1992, which this bill repeals, has been an important mechanism by which successive governments have delivered much-needed assistance to Australian farming families for more than two decades. However, we equally acknowledge that we need to reform the way assistance is delivered to the farming sector if we want farmers to have a viable future. That is what this bill does and that is what Australia needs.

Governments of all persuasions have historically valued Australia's agricultural sector highly. We accept that the assistance that we give to our farmers is a special type of assistance and is given in recognition of the very unique circumstances in which they live and work. As the famous slogan goes, every family needs a farmer. It is true. Every family, every community and every nation needs a farmer. The agricultural sector delivers significant economic benefits to communities in many parts—I would say all parts—of our country and indeed to the country as a whole. As the Minister for Agriculture pointed out, Australian agricultural exports reached $38 billion last year. That equated to 13.8 per cent of all Australian exports. The gross value add of agricultural production was some $47 billion. In my electorate of Riverina the gross value of agricultural production came to $1.8 billion in 2010, which equated to 16 per cent of the New South Wales total. It is no wonder that people call the Riverina the food bowl of the state. I would say that it is the best food bowl of Australia. Agriculture is our single largest industry, providing 7,900 jobs or 12 per cent of the total employment, which is the highest of all sectors. There are 4.4 million hectares of productive farming in the Riverina region—2.5 million hectares of grazing land, a further 1.5 used for cropping and the rest either in forestry or set aside for conservation. The Riverina has a diverse variety of agricultural products from wheat to beef, rice, barley, dairy and cotton. The Riverina produces the largest output of potatoes, almonds, oranges and apples of any region in New South Wales. We are also the largest producer of wine grapes and wine in New South Wales. Agriculture is therefore a strategically vital industry not just for the state and for the nation but also for my own electorate. I know that the member for Parkes, who is sitting in the chamber, would certainly agree with the role that the Riverina plays. I know the role that his electorate also plays—it is the biggest electorate in the state and certainly a key player in the agricultural sector. Agriculture is a critical industry in the Riverina and I am committed to supporting it. I know that the member for Parkes is also an avid supporter of everything agriculture based, in both good times and bad.

While we are fortunate that the drought has not yet had the impact in the Riverina that it certainly has had in Mark Coulton's electorate, there are certainly areas within my electorate that are beginning to feel the effects of drought. Places in the north-west of my electorate—in the Bland Shire, in the Carrathool Shire and in places such as West Wyalong, Ungarie and Rankins Springs—are experiencing drought-like conditions. It is very dry. I am proud to be able to support measures such as this which will directly benefit those in my electorate who need assistance now and may well need it into the future. As the Prime Minister highlighted recently on his national drought tour, Australia is currently in the midst of a severe and prolonged drought—a once-in-a-century drought for some areas. Last year alone, more than 150 temperature records were broken across the country. It was the hottest year on record according to the Bureau of Meteorology's recent report, State of the climate 2014. Projections from both the Commonwealth Scientific and Industrial Research Organisation and the weather bureau suggest we will continue to experience higher temperatures into the future. It would be prudent, given those projections, that we prepare ourselves for a future where we are at higher risk of drought. To that end, I would say we need to be prepared for this—we need to build more dams. I said it in my inaugural speech, I will say it again and I will say it in my valedictory speech—hopefully by then we will have built a few more dams—we certainly need more water storage.

The income support this bill will introduce is part of a comprehensive package of drought assistance measures the Prime Minister and Minister for Agriculture announced on 28 February. This bill, and indeed the entire drought assistance package, is the result of significant work by this government to deliver a credible and sustainable support mechanism for farming households and farm businesses facing the impacts of drought. The government's full suite of policies is appropriately and unashamedly focused on building community resilience and drought preparedness as we move away from the sometimes ad-hoc and crisis-response nature of successive drought policies in years gone by, particularly over the past six years.

The Farm Household Support Bill 2014 provides for up to three years of income support to farmers and their partners affected by drought anywhere in Australia subject to eligibility criteria. Importantly, the income support provided for in this bill is not contingent on a climatic trigger, such as an Exceptional Circumstances drought declaration, which is required to access an Exceptional Circumstances Relief Payment under the existing act. To be eligible for the FHA, applicants must meet a revised means test which provides for a higher asset threshold than normal, taking into account the value of property and other capital which farm businesses hold but which is not sufficiently illiquid or productive due to the drought. This brings the FHA in line with other forms of social security assistance so that we are supporting individuals and families who are facing similar hardships in earning an income.

Subject to eligibility criteria, and in line with other social security payments, receipt of the FHA confers a range of further ancillary benefits to recipient families including a health care card, a telephone allowance, a remote area allowance, a clean energy supplement—the carbon tax compo—and rent assistance. Receipt of FHA will in some instances also qualify young people, most importantly, to meet the parental means test for youth allowance, which is vital for many of our regional youth who are forced to relocate to pursue higher education and vocational training opportunities. This is a sector of people who were forgotten under Labor. Importantly, it is now a requirement that people undertake a financial improvement agreement and have a farm finance assessment carried out in order to qualify for the FHA. Neither of these processes is intended to be one size fits all, and both are equally important in assisting recipients to determine their own futures.

Implicit in this policy is an acknowledgment that not all farm households will stay involved in farming either during or following periods of drought—that is a reality—but the best thing government can do is to support these households to make the best decision for them in their circumstances. There is provision for a $3,000 payment, known as an activity supplement, to assist people to retrain, seek advice or engage in another approved activity consistent with their financial improvement agreement. Under this approach, there are still obligations placed on allowance recipients. However, more significantly, as a government we want to support recipients in meaningful and practical ways as they transition through this period of uncertainty in their lives.

While the FHA will be demand driven, the cost of this income support measure is expected to be in the order of $99.4 million over three years in both administered and program expenses. Certainly, the farm household allowance is an important component of the government's drought assistance package, but every part of the government's additional $320 million commitment is necessary in assisting communities through periods of drought. Income support alone, no matter how well designed, is not enough to get our communities through the drought. That is why the other measures are so important. These include the $280 million in concessional loans, $12 million for water infrastructure, $10 million for pest management and $10.7 million for social and mental health services. As the member for Mallee pointed out, social and mental health services are so crucial.

I digress for a moment to point out that this Saturday at the Coolamon Sport and Recreation Club there is a family fun day for those people who are suffering the effects of mental pressure. Its purpose is to ease the burden on those people through getting together and talking about all things rural related and having a good time. I certainly would recommend anybody in the vicinity of Coolamon to attend and avail themselves of the opportunities there. In conclusion, I support this bill.