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Thursday, 1 September 1994
Page: 835


Senator TROETH (5.51 p.m.) —I, too, wish to speak in this debate and support the motion that the suffering and hardship of people in severely drought affected areas has been exacerbated by policies decisions made by Labor governments during the 1980s. I remind Senator Burns that we are not talking in this debate about the government introducing schemes to make people happy, as he puts it. We are talking about making the existing system work better.

  All of the paragraphs that Senator Crane has used in this motion contain measures that already exist. The coalition sees that these measures could work better—particularly the IED scheme, the fuel excise scheme, the sales tax scheme, the assets test and the income test. Those systems that are in place should work better. We are not talking about some magical system that should be suddenly introduced by government to make people happy.

  The Prime Minister (Mr Keating) has already added to the attitude of the present government by referring to drought as just a normal occurrence in rural life. Those of us who live in the country know that drought is a part of rural life, but this particular drought is not. There are people in northern New South Wales and Queensland who have been having negative incomes for the last four or five years. I put to the government that that is not a normal occurrence in rural life.

  The coalition drought policy announced earlier this week by John Anderson favours the suspension of the assets test. We are not talking about waiving the assets test altogether. We are talking about suspending it so that those people who are particularly affected by the hardships of this drought have an opportunity to gain access to existing government support schemes and use them for the continuance of their farm life and the continuance of their family life. It would not be appropriate to abolish the assets test altogether, as farmers should not be seen, and would not wish to be seen, as being in a privileged position vis-a-vis the rest of the Australian community.

  However, in this economic climate it is unfortunate that an increasing number of farmers are being forced to apply for government assistance. Most farmers are currently ineligible for social welfare payments because their properties put them outside the assets ceiling. The government simply does not seem to comprehend the fact that possession or ownership of broadacres does not necessarily mean that an income is derived from that. Ironically, the more fortunate ones in the short term are those whose debts—often massive—pull them beneath the ceiling.

  Entire families are being hurt by this drought. The very high unemployment rates inflicted on Australians by this Labor government mean that families are trying to keep their children at school longer because, first, they cannot afford to employ them on the farm and, secondly, they know that if they send them out into the labour market they will not be able to get a job. The problem for farm families is that they cannot afford to keep them in school or at tertiary education either. The assets test for Austudy means that many farm families are ineligible for aid.

  Some families say that they would not be suffering so much if drought were the only problem to contend with. They are still suffering from the high interest rates of the 1980s and the early 1990s, low commodity prices, a substantially weaker financial position and escalating fuel taxes. Indeed, in the last four years equity has slipped for many farm families from 100 per cent equity in their farm property to closer to 40 per cent.

  I particularly wish to comment on the income equalisation deposit scheme. The present structure of IEDs is another example of the government's inability to comprehend the fluctuating nature of farm income. IEDs must be made more attractive to farmers, from both an interest bearing point of view and a taxation point of view. They should encourage farmers to put aside income from good years to be used during lean years.

  The National Farmers Federation policy document has commented that the current structure of IEDs makes them attractive principally to high income farmers—obviously, not applicable in today's economic climate, as this is the fifth consecutive year of negative income for farmers. Even in years of reasonable income, research has shown that IEDs are not an attractive investment option for many farmers. If IEDs were attractive, people would obviously use them, but they do not.

  The provision of IEDs by government does not constitute special treatment for farmers. Wage and salary earners benefit from generous tax concessions for superannuation as a means of stabilising income over their life cycle and they do not suffer the tax penalty from fluctuating income. For farmers, this requirement is even more pressing, since low or negative income years occur from time to time throughout their working life.

  The withholding tax which applies at the time of withdrawal is discriminatory as no similar tax applies to other investments. It particularly penalises farmers who are withdrawing funds because of a financial crisis. They are unlikely to show a profit in the year of withdrawal, and they urgently need the proceeds of the IEDs.

  Another paragraph in this particular motion deals with the fuel tax. Senator Burns may like to note that in spite of his remarks there is no suggestion by the coalition that people in country areas pay less for fuel. We say that the general level of excise is too high and that this very high level impacts particularly on country people. This is another of Labor's broken tax promises and an example of the government's ignorance of the problems faced by rural people.

  The government has just increased the fuel tax yet again. This took place on 1 August this year as a flow-on from last year's budget. Rural Australians already pay more for fuel—

in some places up to 15c more—than people who live in the city. This impacts on every aspect of rural life, not only on economic life but also on family life. It is much more expensive for people to take their children to play sport or to transport their elderly parents or their elderly relatives to the doctor or the dentist if they have to pay more for fuel.

  Every one cent increase in the fuel excise costs the farming sector $26.8 million and adds $23.3 million to the cost of the food processing sector which, it is hoped in the future, will be a growth industry in many country areas. How can rural sectors bear increased processing costs like this? Rural sectors simply cannot afford it.

  To add insult to injury, very little of the revenue gained from the increased taxes goes back to the rural community to repair roads. Only 8.45 per cent of revenue raised goes into federal road funding, and the government intends for this to drop even further to 7.51 per cent by the year 1997-98.

  It is very important to realise that this drought has reduced Australian farming families, in many instances, to a level of living which was previously only imaginable in Third World countries. According to a relief worker in Queensland, Mr David Fenton, entire families are living on kangaroo and feral pig meat until food parcels arrive. Never did I think I would have to document in the Australian parliament that this is the way that Australian farming families are being forced to live.

  This is not entirely the fault of government. But the point of our motion today is that government policies have exacerbated the low level of income which farming families are experiencing as a result of the drought. It is very sad, indeed, to realise that people who possess or own 14,000 hectares of land are so broke at the moment that they need to exist on food parcels. Farmers who were willing to accept fodder for their starving stock will not admit that their own families are in danger of not having enough food to eat.

  Male heads of households in the country are brought up never to admit that there are any problems in family life. The economic constraints being imposed on families today are causing them to suffer unimaginable stress as a result of the drought. I wish to bring this to the attention of the Senate. There are very few rural counsellors available, and the government is ignoring yet again the human side of this drought.

  In summary, the failure of the government to understand the extreme hardship faced by rural people in drought affected areas has meant untold deprivation for farming families. It is for these reasons that I support this resolution. (Time expired)