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Thursday, 1 September 1994
Page: 833

Senator BURNS (5.40 p.m.) —Senator Crane's motion is an attempt to make a cheap political point by using the stress suffered by the people in the rural industry. It makes out that some people—apart from those in the opposition—do not understand those problems and do not have the view that others should be helped in those circumstances. The motion clearly talks about the question of the severe drought.

  The suggestion is that an opportunity should be given for the fuel excise to no longer be levied on people in drought circumstances. Of course, we have to be fair and equitable for all people in the community. We cannot reduce that excise for people on farms unless it is done for people generally in the community. But that does not mean that they cannot be assisted in another way, whether that is by money coming from the government or by other outlays which can be applied to assist people in areas where there is severe drought.

  As everybody knows, the fuel excise collection is not applied as income but only to the area of roads. Other outlays involve other social programs that the government carries out—programs that benefit people in rural areas as well as those in cities and provincial towns. It would be too messy to apply Senator Crane's motion that the fuel excise not be levied on country people. Senator Crane talked about fodder subsidy. I think the Minister for Primary Industries and Energy (Senator Collins) has quite clearly put our position. It is interesting to look at a short article in today's Courier-Mail. The article said:

The farming industry yesterday rejected the coalition's drought policy as incomplete and insubstantial. National Farmers Federation policy director Gary Goucher said the centrepiece of the coalition's policy, a subsidy for fodder, was riddled with problems. He said there was a range of unexplained areas.

I do not know whether Senator Crane's motion is supposed to explain some of those areas, but it does not do it very well. The suggestion of the fodder subsidy is certainly not a goer. There is mention of equalisation of income in terms of bank deposits. I was chairman of the Senate Standing Committee on Rural and Regional Affairs in 1992, which Senator Collins talks about. We wrote a letter to Treasury about the position of IEDs. We said that there were a number of ways that we felt they could be improved. We talked about the importance of certain provisions being there. The letter reads:

Thank you for your letter dated 3 July 1992 concerning suggestions you have received for the Income Equalisation (IED) scheme that might serve to make the scheme more "attractive" to primary producers. The suggestions for the scheme were as follows:

.  fully tax linked;

.deposits should be fully deductible in the year of deposit;

.interest should be accrued at the short term bond rate; and

.the principal and accrued income be fully assessable at the individual's marginal tax rate in the year of withdrawal.

I confirm that you are correct in your understanding that these are all features of the current IED scheme introduced in 1989.

The scheme was introduced as a result of an action by the government. I think it is interesting to note that nobody on that committee suggested otherwise. Everybody was concerned to make sure that we maintained a viable rural industry which contained many family enterprises—that is, the family farm. We suggested that it should be introduced in an effective way. In 1992 the government's response to the committee's suggestion that there should be an effective IED scheme was as follows:

Changes to the Income Equalisation Deposit (IED) Scheme, including the implementation of a new Farm Management Bond were implemented by amending the relevant legislation in December 1992. The adjustments to the IED Scheme were aimed at improving its operation and making it more attractive so as to encourage greater self-reliance during downturns. In particular, Farm Management Bonds are a more concessional tranche within the overall IED Scheme, expressly designed as a provision against hardship arising from natural events such as drought.

The information I have just placed on the record indicates nothing but the fact that the government is concerned about the people in the rural areas, and it has provided provisions for them to have what is called a money stack. Some people may think the government could be even more concessional—it could help even more—and they are entitled to have that opinion, but the government has another opinion.

  One can look at how the rural industry has responded to the IEDs in the various ways in which they have applied and the conditions under which they have applied. In 1975-76—just after a Labor government was thrown out—the amount applying was $3,000. By 1982-83—just prior to the election of a Labor government—it was up to $154,030,000. Through the years, it went down and it went up. The figure in 1992-93 was $109 million; 1993-94, $137 million; and 1994-95—when the drought had been going for some time—$129,034,000 up to mid-August. These figures came from the levies management unit of the department of primary industries. It does indicate that people saw the IEDs as being attractive and certainly did use them.

  As Minister Collins has already indicated, everybody has come to the conclusion that one must plan self-sufficiency to take care of drought. I do not think anybody with any knowledge of the rural industry and this country would try to suggest that there are not droughts that are so severe that people cannot manage for them. They deserve, and should be given, assistance by the general community. That is recognised by the fact that many people in the cities are now making individual donations, and certain banks and other companies are assisting in raising finance to assist people in bad circumstances.

  If one goes back many years, there was a fellow named Tyson who had a network of stations. He said that he was going to have an empire which was drought-proof, because all of his large stations would not be in drought at the same time and he could move stock from one station to the other. He came a bit of a cropper, too, because the drought was so widespread that even he bit the dust on that particular problem.

  When one looks at the individual problems that people have, one cannot blame it all on the drought. Some people have been in drought for some time. They have quite consciously understocked over the years and are still in bad circumstances—of that there is no doubt. But there are others who have overstocked and found themselves in difficult circumstances. There are others who, through bad advice from banks, have taken out loans that have put them in the position where their farms have been sold up and they have lost everything, which is a very sad situation. But just because a place is in drought, everybody is not in the same bad circumstances, although I very clearly say that most people would be in very difficult circumstances.

  There are issues in relation to education, social benefits and the assets test. Surely this is not something which is raised in terms of a drought situation. This is something which has to be looked at in normal circumstances—whether people should qualify and the terms of the scheme so that people can qualify. Some people from the country have made comparisons and given evidence to the current inquiry into the rural adjustment scheme. They raised the issue as to why they should not get some help as far as Austudy is concerned; they are denied that right because of their assets. Other people can have a $2 million house at the Gold Coast, in Sydney at Vaucluse or somewhere else and they are able to get Austudy. I find that unfair. I very clearly state my personal opinion that anyone with a $2 million house should not get Austudy either.

  But the facts are that over time the government has been very concerned about people affected by drought. We have introduced a number of schemes, some of which I have talked about, and I believe they have been very helpful indeed. We will continue to look at the problem, as the minister has said.

  I am certain of one thing: no government of any colour will ever be able to introduce a scheme that will make everybody happy. Some people are very reasonable in their approach. They do things for themselves. They become self-sufficient. They do everything right so that they are in the best position they can be when a severe drought comes along, and therefore they do not need as much help as other people.

  I say again that the opposition's proposition is some cheap political effort to point score when people are in very dire circumstances in the rural areas. That is something which is recognised by everybody. Again, I say that the government is considering that as a very important and priority issue and it will do whatever it can to help.