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Thursday, 9 February 2017
Page: 460

Mr JOYCE (New EnglandDeputy Prime Minister and Minister for Agriculture and Water Resources) (09:42): I move:

That this bill be now read a second time.

The Farm Household Support Amendment Bill 2017 is a bill to amend the Farm Household Support Act 2014.

The bill proposes to assist farmers in financial hardship by removing unnecessary waiting periods once they have been approved for payment of farm household allowance. The bill also resolves a technical anomaly in the definition of farm assets in the Farm Household Support Act whereby some types of assets used wholly or mainly for the purpose of a farm enterprise—such as water rights or shares in marketing cooperatives—are not assessed as farm assets.

The farm household allowance program provides up to three years of income support, paid at the same rate as Newstart allowance, to farmers and their partners in hardship. Since its introduction in July 2014 over 7,000 farmers have been granted access to the program which allows them to access income support payments, case management services and improvement activity supplements. The safety net provided by this program is essential to ensure the government can appropriately support farmers in hardship.

The government's general position is that conditions for receipt of farm household allowance should be aligned with those for mainstream income support payments, unless there are good reasons for departure.

The program settings recognise that farmers are often excluded from mainstream income support payments by the size of the assets they use in operating their farm, yet they cannot realise those assets for self-support without taking away some, or all, of the income producing capacity of the farm enterprise.

Farm household allowance is therefore subject to a two-tiered asset test. The first, applied to non-farm assets, is the same as that applied to Newstart recipients. The second tier permits the farmer and their partner to hold up to $2.55 million in net farm assets.

The mutual obligation provisions for farm household allowance also differ from those for Newstart allowance, recognising that the aim is to provide income support for a limited time while the farm household seeks to move to a more sustainable financial position. To this end, recipients receive case management support and financial assistance to obtain advice or training to improve their situation.

When the farm household allowance program was introduced in 2014, the same ordinary waiting period and liquid asset waiting period that apply for other Australian government income support programs were retained. These are generally applied to ensure that social welfare applicants use their own readily available resources before drawing on public monies, and have incentives to continue to seek work.

Experience has shown that the normal considerations around waiting periods are no longer appropriate for farm household allowance.

Farmers are an integral part of the farm business enterprise. If a farmer has qualified for farm household allowance, this means they are experiencing hardship. Requiring this farmer, or their partner, as a farm household allowance recipient, to wait additional time, notwithstanding they have been found eligible, could lead to additional hardship which risks a reduction in their capacity to operate the farm enterprise.

The bill therefore proposes the removal of the requirements for recipients of farm household allowance to serve an ordinary waiting period or liquid assets waiting period.

Farm household allowance is also time limited, so removing the standard waiting periods generate no costs to the budget.

The bill also seeks to clarify the legislative treatment of certain assets necessary for the operation of the farm enterprise.

Under the Farm Household Support Act certain assets, which are necessary for the operation of the farm enterprise, are currently excluded from the definition of farm assets. Therefore they must be assessed as non-farm assets, and are subject to the lower tier 1 test that does not account for the illiquid nature of farm assets. Examples include water rights and shares in marketing cooperatives.

This is contrary to the intent of the farm household allowance program in respect of the assessment of assets, and this bill therefore provides for the definition of farm assets to include water rights and shares in marketing cooperatives used or held substantially for the purposes of operating the farm enterprise. This change will apply to new customers of the farm household allowance program. It will not affect existing customers who may have been assessed under the current minister's rules applying to these assets.

The clarification of the treatment of assets will not change the maximum asset holding limits to be eligible for the farm household allowance. It will therefore have minimal impact on the budget.

In seeking to remove unnecessary waiting periods for farmers and their partners approved to receive farm household allowance, and in clarifying the treatment of assets within the Farm Household Support Act, this bill further demonstrates this government's responsiveness to the needs of the farming community and rural and regional Australia as well as our willingness to streamline the assessment of farm household allowance applications where appropriate and possible.

Debate adjourned.