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Budget helps rural and regional Australia

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by the Minister for Primary Industries and Energy, Mr Simon Crean, and the Minister for Resources, Mr Alan Griffiths

DPIE 91/214J 20 August 1991


The 1991 Federal Budget contains a wide range of social and economic measures to help people living in rural and regional areas of Australia facing hardship in the economic downturn.

The Minister for Primary Industries and Energy, Simon Crean, said today that among key components of the Budget were changes to the Family Allowance Supplement (FAS) to help farming families, and funding for assistance to rural and regional business.

"The Government is addressing, for the first time, the particular problem faced by the farm community in gaining access to support benefits," he said.

"Many farm families are income poor, but asset rich, and extending the eligibility for FAS means many farmers who were previously excluded from getting benefits will now qualify."

Other measures included:

1. Social justice;

. the allocation of $450,000 to the Australian Bureau of Agricultural and Resource Economics towards the cost of conducting a survey of rural areas to identify specific regions affected by the rural downturn. The National Farmers' Federation has also agreed to contribute $100,000 towards the $600,000 cost of the survey.

. student assistance through AUSTUDY and the Assistance for Isolated Children Scheme will be improved and simplified, including the introduction of a hardship provision so that the present assets test (effectively $695,000 for farm and business assets) will no longer apply if a student’s parents or spouse are receiving:

a Social Security or Veterans pension or benefit, or household support under Part C of the Rural Adjustment Scheme (RAS).

. funding for existing or already announced new programs, including the Rural Access Program, the Rural Counselling Program and CountryLink information services.


2. Economic development;

. $2 million from 1992-93 for the Rural Industries Business Extension Service (RIBES), a program to assist with the development of successful agricultural and related businesses, especially into export markets and greater value-adding.

. $1.8 million for the Business Advisers for Rural Areas (BARA) scheme, a program to provide business advice to assist rural people to develop new and more diversified enterprises.

. an increase of $500,000 a year for the Local Government Development Program, and the broadening of the eligibility criteria to assist selected key regions to diversify their economies.

. continued funding for existing programs, such as the Innovative Agricultural Marketing Program, and Marketing Skills Program.

3. Rural Adjustment Scheme;

. as previously announced, funding for RAS will be increased by $100 million to $160 million. This gives the Commonwealth the capacity to support up to $1.4 billion of rural debt during 1991-92.

4. Environment and Resource Management;

. new flood warning systems for Brisbane, Sydney, Newcastle and Wollongong are included in projects worth $26.4 million being funded under the Federal Water Resources Assistance Program. Other projects funded under the Program include the Country Towns Water Supply Improvement Program, which is to receive $5 million in 1991-92, and

$1 million to develop an innovative approach to flood drainage problems in western Sydney.

. the National Soil Conservation Program will receive some $24.9 million for 1991-92. This compares with $21.5 million in 1990-91. Within the Program, additional funding will be available for Landcare groups to facilitate farm and district planning and to develop better approaches to risk management for factors such as drought.

. funding for the Murray-Darling Basin Initiative will be increased from $9.93 million to $11.29 million. This includes $7.0 million for a program of works under the Natural Resources Management Strategy including revegetation schemes, farm planning projects, community education programs and community participation in projects to combat waterlogging and salinisation. ,

. the Land and Water Research and Development Corporation is to receive $10.8 million for its second year of operation.


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The Minister for Resources, Alan Griffiths, also announced a number of initiatives within the Primary Industries and Energy portfolio:

5. Mining and Petroleum

, To encourage a wide range of mineral exploration activities, as from 1 July 1991, the tax treatment of expenditure on exploration for minerals will be the same as that afforded exploration for petroleum and quarrying under Section 122J of the Income Tax Assessment Act. This change to the Income Tax Assessment Act will bring it into line with modem exploration technology, such as by remote sensing, and remove a previous disincentive to invest in exploration and related research.

. For Victoria, the Budget provides a special grant of $60 million to minimise pressure on gas prices during the transition from excise and royalty to the more efficient Resource Rent Tax (RRT) arrangement. The new RRT arrangements will lead to substantial new developments in Bass Strait, resulting in additional production over time of some 200-300 million barrels of oil.

6. Sectoral initiatives;

Mr Crean said that the Government had previously announced initiatives for a number of sectoral industries:

. The Budget provides $35.1 million to provide compensation to the grain industry following Australia's observance of United Nations' sanctions on Iraq and Kuwait. This payment will ensure that no one section of the Australian community bears the full burden of the sanctions necessary as a part of Australia's participation in the United Nations'

actions in the Gulf War.

. The Australian wool industry will benefit from a grant of $22.5 million the Government is providing in the Budget to allow the Australian Wool Realisation Commission to raise $200 million, interest-free, on the commercial money market. This grant, and a similar amount to be provided in 1992-93, will allow the Commission to borrow $200 million for

two years and thereby maximise its return from the sale of buildings, wool and other assets of the former Australian Wool Corporation.

. Underwriting of the export returns from the Australian dairy industry is continued in the 1991 Budget with an allocation of $22.5 million for the 1990-91 season. This underwriting enables both producers and manufacturers to plan their export operations with some degree of certainty, in spite of a heavily-corrupted world market for export

dairy products.

Media contact: Barbara Sharp (06) 277 7520