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Tuesday, 30 July 2019
Page: 1077

Senator McKENZIE (VictoriaMinister for Agriculture and Leader of The Nationals in the Senate) (12:01): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Farm Household Support Amendment Bill 2019 amends the Farm Household Support Act 2014.

The Bill proposes to maintain the temporary increase to the farm assets value limit for Farm Household Assistance at $5 million. It also ensures allowable deductions are applied against the relevant income type for those deductions.

The government recognises the significant contribution of agriculture to the Australian economy and regional communities. We are committed to strengthening the sector to ensure it continues to be profitable, competitive, resilient and sustainable.

The government wants all Australians to prosper, to be able to inject capital into their businesses, save for their retirement, and to support their children to succeed. We also want farmers to have the supports to assess and safeguard their long-term financial security and Farm Household Allowance does this.

It is more than a social security payment - it is a package of assistance comprising income support, ancillary allowances, an independent financial assessment of the farm business, an activity supplement that pays for advice and training, and individualised case management.

To date, Farm Household Allowance has helped nearly 12,000 farmers, and almost 7,000 are receiving the payment now. We have paid more than $330 million in fortnightly payments and related supplements and allowances. Over $43 million of this was in the FHA Supplement which added up to $12,000 per household last financial year.

As this is a support payment Farm Household Allowance is aligned with mainstream social security, unless there are good reasons for departure. The most significant departure is the two tier asset test. Farmers have access to a significantly higher threshold for assets than other payments. This setting recognises that a farmer's biggest asset is their land, but in times of hardship that land is not capable of generating a return that sustains the family.

The book value of a farmer's assets often excludes them from other income support payments, yet they cannot realise those assets for self-support without taking away some, or all, of the longer-term income producing capacity of the farm enterprise.

In September 2018, the government increased its support for farmers and farming communities, by temporarily increasing the threshold for farm assets to $5 million. This was an increase of almost $2.4 million and opened up the program to many more farm households experiencing hardship.

But the government is going one step further, and from 1 July 2019, the farm assets value limit will be retrospectively maintained at $5 million. Farmers and farm households can be assured that the government stands with them and their communities to generate wealth, and build strength, prosperity, and resilience.

The Bill also seeks to amend the treatment of allowable deductions so that they can be claimed against related income - that is, either on-farm or off-farm income earned by a Farm Household Allowance recipient.

Allowable deductions will relate to the income they apply to. That is, allowable deductions associated with on-farm business income will be able to be deducted from that income and off-farm deductions will be associated with off-farm income. The exception is for people in very straitened circumstances who may offset their off-farm income from their on-farm loss. This offset has been available since 1 July 2014 and remains unchanged.

This Bill amends the Farm Household Support Act to ensure allowable deductions can be claimed against the income that they relate to.

These amendments accord with the underlying objective of the Farm Household Allowance program, and help paint as accurate a picture as possible of a recipient's farm enterprise, its viability, and possible options for improvement.

These amendments will not change income thresholds or eligibility for Farm Household Allowance.

In seeking to maintain the farm assets value limit at $5 million and amend the Farm Household Support Act 2014 to ensure allowable deductions can be claimed against related income, this Bill further demonstrates this Government's responsiveness and commitment to the needs of farmers, farming communities, and rural and regional Australia.