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Government increases assistance for rural Australia

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DPIE91/267C 29 October 1991


The Federal Government has agreed to inject more than $60 m illion in new funds into rural assistance over a full year in recognition of the extreme hardships currently experienced by the farming sector.

The M inister for Primary Industries and Energy, Simon Crean, said today's Cabinet decision reinforces the Government's commitment to help farmers hard hit by low commodity prices, high debt, drought and poor alternative employment opportunities.

"Federal Cabinet has approved an increase of $30.64 million in the overall funding for RAS this financial year, rising to $41.81m in 1992- 93,,r Mr Crean said.

"Additionally, a new arrangement linking RAS assessm ents to Social Security benefits will inject another $10m into rural assistance this financial year and $20m in 1992/93.

"The new relationship between the Social Security system and RAS is a major breakthrough in extending social security to more farmers.

"This Government initiative recognises the need for additional m easures to assist those farmers with prospects of long term profitability but who cannot carry more debt, even with the interest subsidies provided under RAS.

"Under the new procedures, they will be entitled to the Job Search or N ew start allowance to help them m eet family living expenses until hardship eases.

"A flow on benefit will be the extension of AUSTUDY and A ssistance for Isolated Children (AIC) payments to those fam ilies with children covered under the new provisions, costing about $2m in a full year."

Mr Crean said some States had been reluctant to make full use of Part B of RAS despite the severity of the recession as it involved matching Commonwealth funds. "Changing the Com m onwealth/states contributions ratio from 1:1 to 2:1 will encourage the states to fully im plem ent Part B."

Parliament House, Canberra ACT 2600. Telephone: (06)277 7520 Facsimile: (06)273 4120

The two to one ratio also recognises the financial implications for the states of the Government's decision in 1989 to move drought assistance from the Natural Disasters Relief Arrangements (NDRA) to RAS. In addition, the threshold levels for Commonwealth funding under the NDRA will be reviewed.

"I have indicated to the States I will work towards a comprehensive National Drought Policy which includes the non RAS recommendations of the report of the Drought Policy Review Task Force," he said.

"I will take these two outstanding issues - NDRA base funding and a National Drought Policy - to the next meeting of the Australian Agriculture Council (AAC) in February.

"The preparedness of States to activate Part B will also be considered in a review of RAS next year."

Cabinet also agreed to a proposal for a joint review of the Income Equalisation Deposits Scheme (EEDS) by the Treasury and Departm ent of Primary Industries and Energy early next year. EEDS allow farmers to create reserves in times of high incomes to carry them through dow nturns.

As well, RAS funding requirements will be reviewed each six months rather than annually as is currently the case.

The final elem ent of the package is the extension of a 'breathing space' under RAS Part C to 30 June 1992. This allows farmers who are assessed as having no prospects of returning to profitability to receive household support for six months without undertaking to leave the farm .

Mr Crean said the new package of measures, based on a review of RAS this month and a report of the Commonwealth/States working party on drought initiated by the AAC last August, consisted of a balanced combination of new Part A, DRIS, Part B and Part C funding.

"It caters for both short and longer term carry on finance and structural adjustm ent needs of farmers, and for situations where farmers w ish to exit farming.

"Today's significant funding announcement not only provides much needed rural assistance but is consistent with the Government's objectives of promoting a self-reliant approach to drought and targeting those people in real financial need," Mr Crean said.

Information: Catherine Payne, Minister's office (06) 277 7520.



. excluding Part C . C om m onw ealth contribution

S million Funding as

at 1 July 1991

Funding from O ctober Analysis

Additional funds 1991-92

NSW 12.48 2 2 .3 3 9.85

VIC 8.58 12.99 4.41

OLD 6.24 18.24 (a) 12.00 (a)

SA 5.07 7 .1 0 2.03

WA 5.07 7 .1 0 2.03

TAS 0.98 1.30 0.32

NT 0.98 0 .9 8 0.00

TOTAL 3 9 .4 0 7 0 .0 4 3 0 .6 4 (b)(C )

(a) Includes a special package for Queensland of $3.94m (DAIS) and $0.84m (Part B) to ensure adequate funding is available for the drought. (b) Commonwealth contribution (c) Minor differences between Tables due to rounding.


(Commonwealth contribution)

$m New

Part A




NSW 1.19 4 .8 7 3.79 9 .8 5

VIC 0.81 2 .2 6 1.34 4.41

OLD 0.84 7 .5 8 3.58 1 2 .0 0

SA 0.4 1.03 0.60 2 .0 3

WA 0.4 1.03 0.60 2 .0 3

tas 0.06 0 .1 0 0.16 0 .3 2

NT 0.00 0 .0 0 0.00 0 .0 0

TOTAL (a) 3.70 1 6.87 10.07 3 0 .6 4

(a) Increased funding from the October Assessment compared with funding as at 1 July 1991.

Additional funding by the Commonwealth In later years 1992-93 $41.81m 1993-94 $24.65m