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Thursday, 29 November 1973

The PRESIDENT -Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

The purpose of this short Bill is to secure parliamentary approval of a new agreement between the Australian and State Governments on rural reconstruction measures. The new agreement is supplementary to the Rural Reconstruction Agreement 1 97 1 which was authorised by the State Grants (Rural Reconstruction) Act 1971. Although the 1971 Agreement provided for a scheme which would operate until 30 June 1975, the demand for rural reconstruction assistance in the first year was so great that the previous government agreed that the funds, originally intended to cover 4 years, could be fully committed during the first 2 years of the scheme, that is by 30 June 1973. As a consequence, new arrangements were necessary if the scheme was to be carried on.

The Scheme as before, will offer three kinds of assistance: Debt reconstruction to assist the farmer whose long term prospects are sound but whose present debt load is threatening the viability of his undertaking; farm build-up to assist a farmer, whose property is too small to be economic, to purchase additional land to build his farm up to at least an economic size; and rehabilitation assistance to farmers who are obliged to leave the industry.

In the early stages of the scheme the major demand was for debt reconstruction assistance which accounted for over 85 per cent of applications in the first year of operation. By 1973, however, farm build-up assistance had become the more sought after form of aid. In the last quarter of 1 972-73 about 66 per cent of applications were for farm build-up, and the trend is continuing. This development had been expected and indicates that rural reconstruction is beginning to achieve its long term objective in that it is moving away from the palliative measures of debt reconstruction to the more permanent restructuring which should result from farm build-up.

The 1971 Agreement provided for annual reviews of the operation of the scheme. In accordance with this provision the scheme has been reviewed twice by those Ministers of the Australian and State Governments with responsibilities for rural reconstruction. At the first review in early 1972, it became apparent that the very great demand for assistance warranted compressing what had been planned as a 4-year proram into 2 years. As a result, the whole of the 100m initially provided for the 4-year scheme, as well as $ 15m additional funds provided at the review, were fully committed by 30 June 1 973.

At the second review meeting held in March 1973, it was agreed that the scheme had provided invaluable assistance to the rural sector. Although the outlook for primary industries had improved, there was still a real need for continued rural reconstruction assistance, albeit with a different emphasis. It was therefore decided to continue the scheme for a further 3 years until 30 June 1976. However, instead of determining a lump sum to finance reconstruction assistance for the full 3-year period, it was decided that the Australian Government would determine funds annually after consultation with the States and consideration of each State's needs for the forthcoming year.

For 1973-74, the Australian Government offered to make available $36m, of which $24m would be funded in 1973-74 and the remaining $ 12m in 1974-75 to finance assistance approved during the closing months of 1973-74. In addition, a supplementary payment of 10 per cent of its base allocation would be made available to any State prepared to match such supplementary funds on a dollar-for-dollar basis from its own resources. The 1973 review meeting also agreed that the Australian Government should determine, after consultation with the States, the allocation of rural reconstruction funds to each State and the proportion in which funds should be divided between debt reconstruction assistance and farm build-up assistance.

For 1973-74 it was agreed that the allocations to the States should be New South Wales, $11.5m; Victoria, $7.9m; Queensland, $5.8m;

South Australia, $4.3m; Western Australia, $5. 3m; Tasmania, $ 1.2m. It was also agreed that no more than half of a State's allocation would be devoted to debt reconstruction assistance, unless the prior approval of the Australian Government were obtained to exceed this proportion; and that the States would adopt as an objective the allocation of at least 70 per cent of total approvals to farm build-up. In order to avoid the situation which has occasionally occurred in the past, of a State committing its full annual allocation before the end of the year for which the money was intended, the States will now program their funds so as to achieve as even a spread as possible over the full 12-month period. The measures contained in this Bill are real evidence of the Government's recognition that some sectors of the farm community still need assistance to achieve the stability and well-being now being enjoyed by the larger proportion of rural producers. I commend the Bill.

Debate (on motion by Senator Laucke) adjourned.

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