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Rural Adjustment Bill 1992



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House: House of Representatives

Portfolio: Primary Industries and Energy

Purpose

To establish the Rural Adjustment Scheme Advisory Council which will provide the Minister with a strategic and national view of the operations of the Rural Adjustment Scheme (RAS).

Background

In a Media Release of 21 September 1992, the Minister for Primary Industries and Energy announced new rural adjustment measures. The objective of the proposed measures according to the Minister is to "... promote a more productive and profitable farm sector and provide improved assistance to farm families suffering hardship." 1 The stated rationale for the proposed measures is that they are in response to "... criticism of the focus, effectiveness and administration of RAS." 2

The measures comprise two main elements, a new RAS and a Farm Household Support Scheme. Key features of the proposed RAS include:

* concentration on a single program, to be administered by State Rural Adjustment authorities, to replace the existing Parts A, B and C of RAS;

* establishment of a RAS Advisory Council to provide strategic oversight of the Scheme;

* a re- establishment grant of $45 000 for those meeting financial tests and electing to leave the farm; and

* special interest subsidies up to 100%, under a Commonwealth and State funding arrangement, to provide additional support for farmers experiencing exceptional circumstances. 3

Key features of the proposed Farm Household Support Scheme (FHS) include:

* support for farmers unable to access commercial `carry on' finance to meet daily family requirements;

* a two year period during which FHS will be available at the equivalent of the Job Search Allowance while the farmer is free to chose whether he/she sell or remains on the farm; and

* the capacity to cash out the balance of the nine month FHS grant as a lump sum if the sale occurs within the nine month period. 4

The Minister's 21 September 1992 announcement has received general support from rural industry lobby groups. For example, in a News Release of 22 September 1992, the President of the National Farmers Federation (NFF) said that the "... the new Scheme [the proposed RAS] was far simpler, would assist farm build- up, facilitate the introduction of new technology, and encourage better farm management." The President of the NFF also said "The new Farm Household Support arrangements provide greater incentive to leave early and send the correct signals to those farmers at the bottom end of the viability scale." The Grains Council of Australia (GCA) has also welcomed the Minister's 21 September 1992 announcement. The President of the GCA in a News Release of 22 September 1992 said the "... new rural adjustment measures will promote a more productive and profitable farm sector and provide improved assistance to farm families suffering hardship".

For a statistical outline of characteristics of Australian farms and the current RAS refer to the Digest for the States and Northern Territory Grants (Rural Adjustment) Amendment Bill 1992.

Main Provisions

This Bill will have effect from 1 January 1993 (clause 2).

The objectives of this Bill are contained in clause 3 and include:

* to foster development of a more profitable farm sector that is able to operate competitively in a deregulated market; and

* to improve the competitiveness of the farm sector in a sustainable manner.

The Rural Adjustment Scheme Advisory Council (RASAC) will be established by clause 5.

Clause 6 provides that RASAC will consist of a Chairperson and a maximum of seven other members. Members are to be appointed by the Minister and on a part time basis. At least one of the members is to represent the States, at least one the Commonwealth, one the National Farmers' Federation; and three others with expertise in economics, financial administration, banking, sustainable agriculture, farm management or training.

The functions of RASAC are contained in clause 8 and include to:

* recommend to the Minister an ongoing three year plan for broad strategic directions for RAS and a proposed annual program and budget for RAS;

* provide the Minister with a strategic and national view of the operations of RAS; and

* advise the Minister on the appropriate level of funding for RAS and appropriate level of funding as between the States under RAS.

Clause 21 provides for payments by the Commonwealth to a State under an agreement relating to rural adjustment. The Commonwealth will generally provide 90%, and the relevant State 10%, of the assistance. For assistance provided to overcome difficulties due to exceptional conditions, the Commonwealth and States will each contribute 50% of the funds.

References

1. Media Release, Minister for Primary Industries and Energy, 21 September 1992.

2. Ibid.

3. Ibid.

4. Ibid.

Bills Digest Service 17 November 1992

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1992.

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1992.