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Tuesday, 21 June 2005
Page: 1


Senator ELLISON (Minister for Justice and Customs) (12:32 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 (EXCEPTIONAL CIRCUMSTANCES RELIEF PAYMENT) BILL 2005

Introduction

The Australian Government is proactively helping the farm sector to manage its challenges through its Exceptional Circumstances (EC) assistance, its Agriculture Advancing Australia (Triple A) package and industry specific initiatives—building farm sustainability and providing assistance directly to farmers experiencing severe downturns in farm income due to rare and severe climatic or other events.

On 30 May 2005, the Prime Minister committed an additional $254 million to assist farmers manage the impacts of drought. The Prime Minister announced a range of measures to enhance the support currently provided by the Australian Government to drought affected farmers and communities. He made this commitment in recognition that many Australian producers are facing the devastating impact that ongoing dry conditions have had on farm production and consequently farm income.

The Coalition’s commitment to drought-preparedness and assistance measures now totals over $2.2 billion. The Prime Minister’s announcement brings the overall Australian Government commitment to drought response activities to more than $1.25 billion.

Features of the enhanced assistance package include:

  • more generous Exceptional Circumstances (EC) Interest Rate Subsidies (ECIRS) with a doubling of the off-farm assets test ($196.3m);
  • a more generous income test for EC Relief Payments (ECRP) ($49.32m) that the bill is seeking to implement;
  • additional counselling and support services ($8.98m);
  • a second round of drought Envirofund of grants ($10m from existing appropriation);
  • an extension of the streamlined re-assessment process for those EC declared areas nearing the end of their second year of assistance and a review by the National Rural Advisory Council (NRAC) of the 22 areas not recommended for an EC extension over the past year; and
  • $3 million for the Country Women’s Association to help it meet immediate household needs of those producers and their families or to conduct community-based activities to assist local communities in drought-affected areas.

This is on top of the EC assistance already provided through EC arrangements. In fact, the Government has so far provided more than $680 million directly to Australian farmers, with the amount increasing by approximately $4 million each week. An additional $80 million is estimated to have been provided in auxiliary benefits such as Health Care Cards and Youth Allowance concessions. The Australian Government will continue to meet 90 per cent of the cost of ECIRS and, with the changes announced to the ECRP that is fully funded by the Australian Government, the Government will continue to meet about 96 per cent of the total cost of EC.

The Government has been able to make assistance available in a timely way for an unprecedented number of EC areas. Approximately 45 per cent of Australia’s agricultural land is currently covered by Australian Government EC declarations. These areas are deemed by the independent committee of farmers and agribusiness professionals, NRAC, to be experiencing a rare and severe drought event of the type that might be expected to occur only once in a generation.

Under the EC arrangements and the 9 December 2002 Additional Drought Assistance Package, the Government has approved more than 33,900 applications for income support and nearly 16,700 applications for interest rate relief.

The Farm Household Support Amendment (Exceptional Circumstances Relief Payment) Bill 2005 (the bill) will give effect to amendments that aim to improve the effectiveness and administration of ECRP and to further ensure that it assists farmers suffering the effects of drought.

These changes recognise that the severity and extent of the drought is continuing to have an immense impact on rural Australia and is unquestionably one of the most severe in the last 100 years. As a result, in many drought affected regions farmers and their partners are increasingly turning to employment opportunities off-farm to supplement their farm income.

To take these circumstances into account, the Prime Minister announced on 30 May 2005, that from 1 July 2005 farm families will benefit from a $10,000 annual exemption from off-farm wages and salaries against the income test for ECRP, in addition to existing exemptions.

The new test is to apply to all EC declared areas and will be reviewed before June 2006 to determine if the prevailing drought conditions and outlook warrant any extension.

The bill also brings into effect a change to the process in which farmers obtain an EC Certificate. A farmer applying to receive an EC Certificate will no longer need to contact their state Rural Adjustment Authority. This change reflects the Australian Government’s ongoing commitment to streamline the EC assistance arrangements to ensure they are more efficient and effective for farmers. The change will also address the concerns raised in the recent report by Australian National Audit Office (ANAO) ‘The Auditor-General Audit Report No.50 2004-05 Performance Audit. Drought Assistance’ regarding the accuracy of information contained in the EC Certificates issued by the relevant state Rural Adjustment Authority.

I would like to highlight that the ANAO found that the Australian Government’s drought assistance measures have been responsive and effective and the agencies responsible for delivering these measures have worked hard to ensure assistance reaches farmers and their families in a timely and user-friendly manner.

The bill seeks to streamline the EC Certificate process for farmers and address the ANAO concerns by using a consistent delivery mechanism—Centrelink. Subject to the passage of legislation, from 1 October 2005 EC certificates will be issued nationally by Centrelink to EC declared farmers. This will not require consequential amendment to other legislation which refers to EC certificates.

As I said earlier, the Australian Government is strongly committed to delivering EC assistance that best meets the needs of the nation’s farmers. But the widespread nature and ongoing impact of the drought has again highlighted inadequacies with the present EC arrangements.

As a Government, we have been trying since 2000 to reform these arrangements. The Drought Review Panel and the National Drought Roundtable both agreed on the need for reform.

As EC is a program run jointly with the states and territories, we are working with these governments to reform the program so EC provides the most effective, equitable and timely assistance possible. Part of this involves negotiating an equitable cost-sharing arrangement for the program—one that ensures the roles of the states and territories in the EC process are adequately reflected. One of the major milestones achieved through this process to date is the development of a National Monitoring System. Once introduced, the System will streamline the state EC application and assessment process, making it less burdensome for farmers, their respective communities and the states to lodge applications for EC and will result in EC assistance becoming available sooner for farmers in an EC event.

The Government supports the Drought Review Panel’s recommended broad approach to shift progressively the focus from drought support to drought preparedness. We are already making a substantial contribution to encourage farmers to improve drought preparedness through many of the Triple-A programmes and work is continuing in this area in the EC policy reform context.

I would like to take this opportunity to also highlight the Government’s efforts to support structural adjustment in rural and regional Australia—most notably through the Triple-A programmes and other industry specific assistance.

The Australian Government has committed over $1 billion in funding to

Triple-A since it was launched as the flagship rural policy package. The package focuses on capacity building, risk management and self-reliance.

While facilitating this shift the Triple-A package has also included income and decision-support for farm families undergoing financial hardship.

The Triple-A package comprises an integrated suite of programmes, including Farm Help, FarmBis and Rural Financial Counselling Services. Triple-A Programmes provide:

  • funding for business and natural resource management training and education;
  • support for industries undergoing change;
  • financial management tools;
  • financial information, referral and decision-support;
  • improved access to markets; and
  • funding for professional advice and skills development.

A new Triple-A initiative introduced in the 2004 May Budget—the Industry Partnerships Program—is working to bring the Australian Government and rural industry together in a common cause, to build stronger, sustainable rural industries in Australia.

The continuing drought and adjustment pressures in the farm sector also make Triple-A assistance timely and targeted toward those in most need.

In relation to specific assistance for industry, the Government has also introduced a number of special assistance programs for discrete categories of primary producers who have been significantly affected by substantial structural or regulatory factors beyond the normal scope of their farming activities.

Examples of targeted support for Australia’s agricultural industries include the $1.94 billion Dairy Industry Assistance Package, the Sugar Industry Reform Program 2004, which allows for up to $444 million in industry assistance and up to $1.5 million through the Australian Government Citrus Canker Assistance Package.

Conclusion

I would like to reiterate that the Australian Government’s record on assisting farmers to manage drought and structural adjustment in rural and regional Australia is strong—and we remain committed to providing assistance when and where it is needed.

I appreciated the opportunity to hear from farmers first-hand during my visits to drought-affected areas and at the recent Parkes Drought Summit. I know that the Prime Minister and Deputy Prime Minister appreciated the response of farmers to their recent tour of some of the worst drought-affected areas. This package comes as a direct response to need in our rural communities and to the ongoing consultations on National Drought Policy, to prepare for the future.

The National Farmers’ Federation (NFF) has been a valued sounding board for the Government in the development of the package announced on 30 May—providing constructive feedback on the appropriateness of measures as they have been considered.

I would also like to thank the farmers, community and industry groups and volunteers who have all been involved in the success of the Government’s drought assistance measures. My thanks also go to the government agencies delivering EC assistance for their swift implementation of the 2005 Drought Assistance Package, ongoing EC, Triple-A and industry specific programmes.

Passage of this bill will ensure that our drought assistance is able to reach those most in need.