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Drought help.



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Gary Nairn MP Federal Member for Eden-Monaro PO Box 232, Queanbeyan NSW 2620 Tollfree NSW 1800 041 539 Ph: (02) 6297 3952 Fax: (02) 6297 5768

Press Release Ref: 862 Published: 9/12/2002 Title: Drought help

Farmers and small businesses in Eden-Monaro will have access to a greater range of drought assistance as a result of today’s announcement of the Federal Government’s additional drought relief package, Gary Nairn, the Member for Eden-Monaro said today.

“The announcement by the Prime Minister today is a demonstration of the determination of the Federal Government to provide immediate and practical assistance to drought-affected farmers and small businesses,” Gary Nairn said.

Under the measures announced today by the Prime Minister, eligible farmers in severely drought affected areas will have access to new income and business assistance, while small businesses will join farmers in having access to Interest Rate Relief in areas declared to be in Exceptional Circumstances (EC). In addition, new initiatives have been announced to assist employees and apprentices in drought-affected communities.

For the first time eligible farmers will be able to access Interim Income Support and Interest Rate Relief from the Commonwealth in advance of their State government lodging an application for Exceptional Circumstances (EC).

Commonwealth Interim Income Support will now be made available for six months to all eligible farmers in areas suffering a 1 in 20 year rainfall deficiency over the nine months March 2002—November 2002.

With over 80 per cent of farmers in New South Wales falling into this category, the Commonwealth has decided to declare the entire State eligible for Interim Income Support.

“With many small businesses suffering a significant fall in turnover or cash flow due to the drought, the Government has announced that small businesses in Exceptional Circumstance declared areas will be eligible for assistance,” Gary Nairn said.

Payment of up to 50% of their interest bill or 5 percentage points, whichever is the lower, is being offered. Interest rate support will be available for up to two years to assist small businesses survive and recover.

Companies will need to meet a number of criteria including:

· A minimum annual turnover of $50,000;

· Fewer than 20 employees · Demonstration of a close connection to a drought-affected community; and · A 50% fall in business turnover in the last 6 months.

In addition to making it easier for severely drought-affected farmers to access income support, the Government has also introduced a significant new measure to assist in meeting the cost of stock feed and to manage drought recovery.

Farmers in EC-declared areas and those currently in receipt of Interim Income Support, as well as those in areas who meet the new Commonwealth criteria, will be eligible for Interest Rate Relief for two years on new and additional commercial loans of up to $100,000 at a rate equivalent to five percentage points or 50 per cent of the prevailing interest rate.

This will provide direct support, especially to farmers experiencing difficulty due to the high price of fodder and stock feed. Ensuring that the nation retains its core breeding stock is a high priority, and these loans will help farmers to preserve that stock.

If Exceptional Circumstances is subsequently declared, farmers will still also be eligible to apply for the existing EC business support measure of a 50 per cent interest subsidy for two years.

The new initiatives will be delivered through Centrelink Offices from next week, and the usual concessions to the assets and income tests will apply.

“These measures are in addition to those already announced by the Government and will provide genuine hope to drought affected local communities,” Gary Nairn concluded.

Ends…Monday, December 9, 2002

Gary Nairn 6297 3952

Summary New Commonwealth drought assistance measures

·Interim Income Support will be made available for six months to all eligible farmers in areas suffering a 1 in 20 year rainfall deficiency over the nine months March 2002—November 2002. If more than 80 per cent of farmers in a State fall into this category the Commonwealth will declare the entire State eligible for Interim Income Support.

·As over 80 per cent of farmers in New South Wales meet these criteria the Commonwealth has decided to declare the entire State eligible for Interim Income Support.

·Farmers in these severely drought affected areas are also eligible for Interest Rate Relief for two years equivalent to five percentage points or 50 per cent of the prevailing interest rate - whichever is the lower - on new and additional commercial loans of up to $100 000.

·If Exceptional Circumstances is subsequently declared farmers continue to be eligible to apply for the existing EC business support measure of a 50 per cent interest subsidy for two years. (Maximum subsidy of $100,000 per year)

·Farmers in existing EC-declared and prima facie EC areas are also eligible to apply for this new assistance.

·Eligible small businesses in EC-declared areas will receive Interest Rate Relief of five percentage points or 50 per cent of the prevailing interest rate on existing or new commercial loans up to $100 000.

·The Federal Government will extend its Work for the Dole scheme to allow unemployed Australians in drought-hit rural and regional areas to work on drought-affected properties.

·Improvements to the Incentive for Rural and Regional Skills Shortages Programme will help drought-affected rural employers retain apprentices and trainees.

Existing Commonwealth drought assistance measures

·The 12-month waiting period for access to Farm Management Deposits (FMDs) for farmers in an EC declared area has been relaxed.

·The Commonwealth, through the Family and Community Services Department, will provide an additional $2 million funding for personal counselling services in drought-affected rural areas.

·A $10 million Drought Recovery round of the Australian Government Envirofund will target works to protect the land, water, vegetation and biodiversity resource base from the effects of drought, and to assist recovery.

·Pest animal management grants programme ($1m in 2002-03) will assist farmers and communities to humanely deal with pest animals now and reduce the total grazing pressure on drought affected vegetation.

·Country Women’s Association (CWA) Emergency Aid Fund ($1m in 2002-03) to assist the CWA in helping and supporting farmers.

·Since 1996 the Commonwealth Government has allocated around $400m for Exceptional Circumstances (EC) assistance and it is conservatively estimated that over the next two years it will cost the Commonwealth approximately $360 million to fund new EC applications.

·In September 2002 important changes to EC allowed eligible farm families to receive interim income support payments from the date a prima facie case is established and allowing predictive modelling of likely losses to enable faster assessment of EC applications.

·The Australian Tax Office (ATO) allows farmers to defer receipts and income arising from unusual situations such as drought and has announced special arrangements to help drought-affected farmers including more time to pay tax debts without interest.

·On 19 November 2002 the Commonwealth announced new flexibility for the Newstart allowance activity test to give people in drought-affected areas easier access to income support.