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Tuesday, 14 October 2003
Page: 16357


Senator ELLISON (Minister for Justice and Customs) (6:38 PM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows

FARM HOUSEHOLD SUPPORT AMENDMENT BILL 2003

The purpose of this bill is to extend the Australian Government's Farm Help—Supporting Families Through Change Program to 30 June 2004. Passage of the bill will also give effect to a number of amendments that aim to improve the effectiveness and administration of the Farm Help program.

Farm Help is part of the Australian Government's $800 million Agriculture—Advancing Australia (AAA) program and it is the key program for supporting farm families in severe financial difficulties. Under Farm Help, assistance is available to low-income farm families, who cannot borrow further against their assets, while they consider their future in the farm sector. The program encourages these farmers to work towards improving their family's financial situation, whether it is by improving the farm's financial performance or by obtaining off-farm income, or to re-establish themselves outside of farming.

The assistance provided through Farm Help is flexible and can be tailored to meet the needs of each farm family. Key program elements include up to twelve months of income support at the same rate as the Newstart Allowance; financial assistance for farmers to seek professional advice such as financial, legal and business planning; and a re-establishment grant of up to $45,000 for farmers who decide to leave farming and sell the farm. Farmers who receive the re-establishment grant can also receive a retraining grant to assist with the costs associated with re-skilling for employment off the farm.

Since the program commenced in December 1997, as the Farm Family Re-start scheme, until 30 June 2003, over 8,100 farmers have received Farm Help income support and nearly 1,000 farmers have received re-establishment grants. The program has funded over 9,100 professional advice sessions for some 7,000 farmers.

The Farm Household Support Amendment Bill 2003 will give effect to the Government's 2003 Budget commitment to extend the application date for the Farm Help program until 30 June 2004. The closing date for applications for income support is to be extended from 30 November 2003 to 30 June 2004 with income support payments being made up until 30 June 2005. Amendments to the Farm Help Re-establishment Grant Scheme 1997 Instrument, which is established under the Act, will extend the closing date for applications for the Re-establishment Grant to 30 June 2004.

The extension will allow farmers to have continued access to the Farm Help program while the Government considers any new arrangements in the context of the 2004 Budget.

The Farm Household Support Amendment Bill 2003 also introduces a number of administrative changes to the Farm Help program that will enable it to operate more effectively in supporting Australia's farmers. These changes have emanated from the on-going monitoring of the program's performance, a mid-term evaluation of Farm Help and the Performance Audit of Key AAA Programs undertaken by the Australian National Audit Office earlier this year.

As Farm Help aims to assist low-income farmers who are no longer able to borrow against their assets, farmers are required to obtain a “certificate of inability to obtain finance” from a bank or other financial institution. It is proposed to streamline the administrative arrangements for these certificates by removing the requirement for farmers to obtain a new certificate every six months to remain on the program. Under the proposed amendments, a certificate will remain valid for 13 months as long as a farmer's application is lodged with Centrelink within one month of receiving the Certificate, effectively covering the full twelve months that income assistance is available under the program.

Under the proposed amendments, farmers will be required to obtain a certificate from the finance institution that is the farmer's primary lender. This amendment is directed at maintaining the integrity of the program by requiring the certificate to be issued by the finance institution that provides the bulk of the farmer's borrowings. It should ensure the certificate is issued on the basis of the farmer's current financial circumstances.

One of the key aims of the Farm Help program is to assist farmers to be better informed when making decisions about their future in farming. All farmers who join the program are required to arrange a viability assessment of their farm business within three months. This assessment allows a farmer to get an independent appraisal of their farm's financial situation.

Currently, if a farm business is assessed as being non-viable the farmer is required to develop an Activity Plan. This Plan is customised to suit each farm family's particular situation and helps to identify options that will best position the farm family for the future. It sets out the necessary actions required to improve the financial viability of the farm, to obtain income from alternative sources or to assist the family to re-establish off the farm. The cost of the initial viability assessment and Activity Plan are met through the program.

The Activity Plan is currently optional for farm businesses assessed as viable. With the passage of the Farm Household Support Amendment Bill 2003, the Activity Plan process will be broadened to apply to all farmers who join the program. As noted in the mid-term evaluation of the Farm Help program, the Activity Plan highlights the need for participating farmers to take action on their own behalf. All farmers on the program can benefit from undertaking the Activity Plan process because it identifies those strategies or actions that farmers can implement now to improve their prospects and avert financial difficulty “down the track”. It ensures that farmers are better informed and better placed to consider their future options.

The completion of the Activity Plan will also open the door for all farmers on the Farm Help program to access the professional advice and training assistance. Farmers will be assisted, up to a maximum of $5,500, to obtain professional advice and/or undertake training that has been identified in the Activity Plan as being necessary to improve their financial prospects.

To facilitate farmers' access to both professional advice and training under the Program, the Farm Household Support Amendment Bill 2003 provides for the amalgamation of the existing retraining and professional advice grants into a single “Advice and Training” grant.

Currently, the program only offers retraining assistance to farmers who have received the re-establishment grant. By combining the existing retraining and professional advice grants into a single grant, all farmers on the program will, for the first time, be able to access training assistance. Moreover, the training component of the grant will be broadened to include activities that upgrade practical farming skills and the purchase of computer software, up to $500. As with the current Professional Advice grant, farmers will be able to use the combined grant to obtain advice on matters such as financial planning, business management, legal and personal issues.

The combined “Advice and Training” grant will provide greater flexibility in addressing the individual circumstances of each Farm Help recipient. The details of the combined grant will be specified in amendments to the Farm Help Advice Scheme 1997 Instrument, established under the Farm Household Support Act 1992.

I would also foreshadow that, apart from extending the Re-establishment Grant components of the program, the Farm Help Re-establishment Grant Scheme 1997 Instrument will be amended to clarify the eligibility criteria for the Re-establishment Grant so as to ensure that the grant is only available for its original target group. It has become increasingly apparent that the eligibility criteria for the Re-establishment Grant are allowing a broad range of people who consider themselves to be farmers to access the grant when the original intent of the grant was to support farmers who have been and continue to be dependent on the farm for their livelihood.

As a consequence, the eligibility criteria in the Instrument will be clarified through the specification of thresholds in relation to the contribution of capital to the farm, the ownership of land, the level of income earned from other jobs and the receipt of other Australian Government income support payments.

The Government remains committed to the development of self-reliant, competitive and sustainable rural industries. It also recognises that there are significant pressures on farmers to remain viable and that some farmers, often for reasons beyond their control, have been unable to keep up with the pace of change. Accordingly, Farm Help has been instrumental in providing farmers in difficulty with financial relief and the means to assess their prospects and make informed decisions about their farming future. The proposed amendments to the Farm Household Support Act 1992 will both extend the Farm Help program and further improve the operation of the program.

Ordered that further consideration of this bill be adjourned to the first day of the next period of sittings, in accordance with standing order 111.