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Thursday, 18 June 2009
Page: 6538

Mr JOHN COBB (12:26 PM) —The bill before the House that we are now debating amends section 7 of the Rural Adjustment Act 1992 to allow for the appointment of members to the National Rural Advisory Council, which is termed NRAC, for three terms. The proposed amendment will remove the current provision that a person might be reappointed as a member on one occasion only. The Rural Adjustment Act 1992 specifies that NRAC’s main role is to provide advice on rural adjustment and regional issues, including whether areas should be assessed as being in drought exceptional circumstances. This bill will ensure that current or previous members who have served two terms will, in the future, be able to serve an additional term.

The work of NRAC is difficult; it is harrowing. The decision on whether or not to extend drought EC can be the difference between survival and ruin for a lot of farmers. I acknowledge Mr Keith Perrett, who has been the NRAC chair for some time now, and I thank him and his fellow NRAC members. It is not a happy job. I have done a couple of tours with them in a previous life as a representative of farmers. It is hard work and you are well aware that the decisions that you will recommend—not make, but recommend—to the federal minister can have long-term consequences.

My electorate of Calare has, over the past eight years, probably been the most drought affected electorate in Australia. I think Bourke was the first area to become EC declared in this current drought. That was in June 2002, and the drought had obviously been in force for some time before that. In later years the Riverina, Farrer, Mallee and Hume—even though it is a bit further east—have all been in the thick of it and a lot of those areas still are, particularly in the Mallee, in the west of my electorate and in the south of New South Wales. South-west Queensland has also had an awful flogging. In the past three or four years in particular we have seen something that we have not seen before: irrigation water has failed in a lot of those areas. At one stage—I think it was in early 2007—the then Howard government included all forms of agriculture so that irrigation did not have to be specifically included in drought. I will speak about that again a little later.

I am not suggesting for one second that ours was a perfect system, but everybody has got used to it and they know what it is. I will go back to my electorate and use it as an example to explain one of the big problems with handling drought. Recently a lot of areas—16 around Australia, but particularly a lot of areas in my electorate—lost exceptional circumstances assistance for two reasons: one reason being that the rules changed. The rules that used to exist meant that farmers had a breathing space between better seasons coming and losing EC. That was because, as the Deputy Speaker would be well aware, rain does not mean water. Sorry, I was referring to Deputy Speaker Schultz, who was previously in the chair.

The DEPUTY SPEAKER (Ms JA Saffin)—It had changed.

Mr JOHN COBB —Sorry, I did not realise that it had changed. In the seat of Hume, obviously, drought has been a very big issue. As a matter of fact, in Page the drought has been an issue too at various times.


Mr JOHN COBB —My point is that there was a time when NRAC’s guidelines, or the guidelines on drought, meant that there had to be a 12-month recovery period after the rain so that people had a chance to get their finances back in order. I think when a drought has been going for as long as this one has, the guideline should be reintroduced, because without a doubt there is absolutely no way any government can come up with a drought program which takes into account that a drought might go for eight years, as this one has in a lot of areas.

I will talk about this again later, too: for the Productivity Commission to make the comments it did in its report, after a drought of this length, was beyond belief. However, I mentioned two areas where I believe things have gone wrong. I was talking about my own electorate. The first is that we are not taking into account the fact that it does not rain money; it rains opportunity. Whereas a lot of areas are looking a lot better, particularly in my own region, nobody has made any money out of how it looks; they make money out of taking advantage of the time to bring stock in to fatten and sell or to put in a crop. That has certainly not happened yet, particularly the cropping. By and large, the croppers have been much worse off over the past few years. Stock people seem to have had more opportunity to get through this period. I am not suggesting they have got fat—they certainly have not—but they probably have not been as financially devastated as the broadacre croppers and as the irrigators have been in more recent times.

I think there has been a failure—and once again I refer to my own area, in places like Molong, out at Nyngan or wherever it might be—because they have simply taken huge tracts of land out of drought but have not looked at individual places within the areas of those PP boards. One of the problems in New South Wales is that they are enlarging the boards. I hope that does not mean that NRAC will look at even bigger areas rather than looking at what is going on within those boundaries.

I have heard the Minister for Agriculture, Fisheries and Forestry make assurances, over time, about the government’s claim that it is not going to abolish EC drought support. We spoke about this a couple of nights ago when we were looking at particular portfolios during, I guess, the House of Representatives’ equivalent of the Senate estimates—although it was not quite as gruelling for the ministers concerned and we do not get a go at the bureaucracy, unfortunately. That would be interesting; I would like to do that. The advisors do not look as amused at the thought!

I will come back to the issue brought up by the member for Riverina the other night. I take the minister at face value on his comments about the relief payment and the fact that there is no suggestion that they are going to walk away from dealing with the social side of drought. I certainly hope not, although I must say that the transition payments for areas that lose EC are extremely hard to get—much harder than it was to get the relief payment. I noticed that when the minister talked about not walking away from drought he did not talk about the period after 2009-10, when there is no forward estimates on drought. I can accept the fact that that might be true; I still have enormous issues with the fact that page 60 of the agricultural budget papers specifically states that the reduction in expenses is due to the cessation not of drought, which would be understandable and hopeful, but of drought programs.

I have never heard the minister mention the interest rate subsidy when he talks about continuation of drought programs. If he makes a statement that he will continue the interest rate subsidy past 2009-10 then I would love to hear it. I think that 21 March 2010 is the latest time for which the current interest rate subsidy is in place in particular areas. I notice, too, that the minister said the other day, ‘Don’t get excited about us not having any drought funding in the forward estimates—it doesn’t mean we are not going to fund drought,’ yet the same minister made the point on AQIS that because it wasn’t in the forward estimates he assumed that the coalition was going to cease the funding of AQIS. That argument is hung on a bit of a nail there; perhaps the minister can explain the difference. As he well knows—and he has explained this himself, in defending AQIS—you do not always make provision for funding; a lot of it is discretionary, as indeed was our intention to fund AQIS. Perhaps the minister might be good enough to talk us through that a little later.

Given the minister’s record of slashing and burning lapsing programs for agriculture—and AQIS is a pretty good example of that—I think he has to accept that farmers have every reason to be particularly nervous and concerned about whether they will ever see new drought programs under a Labor government. The simple fact is that I wonder whether the government has any money, given the cash splashes that have gone into providing more programs. I will state right here and now that I have absolutely no problem with the idea of a drought review—I think it is necessary—because there is no perfect system. But everyone is used to this system and I have never been in favour of changing horses mid-stream, and I do not think the minister is, either. I would hope not.

Let us just talk about the Productivity Commission report for a while. It was interesting to note that, despite having had that report since—I think I am right in saying—February, the minister for agriculture chose to put it out for public discussion on the Tuesday morning of the budget, when I am sure he expected it to be the headline everywhere the next day. It was probably coincidence, and I am sure he will tell us if it was. That Productivity Commission report is the most ruthless thing that I have ever seen in any industry in my time not just as a member of this House but as an agripolitician representing farmers and other people. I have never seen anything quite so ruthless and quite so determined not to see any view but that of Treasury as this report.

Let us remember that the Productivity Commission is a creature of Treasury. When the minister said, ‘This is an unbiased review and we’re looking at the facts,’ I thought of the car industry. The government obviously wanted to help the car industry and to be seen to do so. They did not get the Productivity Commission or Treasury as their boss of an inquiry into the state of the car industry. They got one of their mates, a one-time Premier of Victoria, Madam Deputy Speaker, whom you probably know, to head up the inquiry. That was ex-premier, Steve Bracks. And, surprisingly, he came down with a report that said, ‘Yes, the car industry needs government to take a hand’, and consequently about $4 billion was targeted in that direction. But when it comes to drought and agriculture, which does not seem to get a lot of sympathy from the government, the government does not get a former farmer or anyone who is sympathetic to what is involved in a drought to head an inquiry.

I am the first to admit that there are some farmers who do not believe in assistance for anything, and in some cases they are right. But we are talking about a drought that has gone on for eight years. So what do we do? We get Treasury to make a report. Treasury are not famous for wanting to hand out money, as I think even the minister would agree. They are not known for wanting to give presents. They only do it when the Rudd government decides to do a splash. The report says things like: ‘Farmers have to realise that there are rates and taxes and every business should make provision for them.’ Why would a farmer, after eight years of drought, assume that he would not have water and that the New South Wales government would charge him for it? Let us get real here. The Victorian government, to be fair to it, does help its farmers a little bit with water rates. But New South Wales is still charging farmers the full cost of water delivery and licensing for something that it cannot deliver. The Productivity Commission said: ‘Farmers should have thought of that. They should have made provision for that eight years before.’ Obviously, they did not have much money then.

The Productivity Commission want everything terminated. They are a little bit careful about the social side of things, because they are well aware that their government believes in a lot of it. Thank heaven they are not totally walking away from the social side of drought. But the social side of drought does not just include farmers; it includes the towns. It includes everybody who works on agriculture or processes it, and that does mean the towns. It very much means the towns in the same way that to walk away from EC payments does not take into account the fact that it does not rain money; it rains opportunity. In fact, when it does rain, it actually means that your expenses go up, because you then have to buy all that stuff you did not buy in the drought. If you are a fattening station, you have to go and buy stock and then fatten them, drench them and do all the other things that in a drought you would close down. You just hope you can find the interest payments somewhere—that is another point.

I think that the minister is well aware of how the Productivity Commission report was received. I would like to hear him say, as I am sure agriculture would, that the report’s recommendation for the cessation of drought programs was a mistake and that it should not have been made. A few nights ago, the minister said that the government continues to fund drought, but I got the impression that he was talking about the social side of drought rather than the hard core side of it. Relief payments might help the farming family but they do nothing for the towns or the businesses who have to be paid for super, fuel et cetera, whereas the interest payments do. That is a social side of drought, too. It supports the towns that are involved.

There is another issue in the current situation which has changed drastically over the past few years. When we were in government, we changed the rules four, if not five, times because the drought kept getting worse as it went on. I will say here and now that there is absolutely no way that a government can come up with a program—and I totally concede this in any forum—that takes into account a drought that has lasted as long as this one has, and they would be very foolish to do so. I have spoken about my horror and, I think, a lot of other people’s horror about the Productivity Commission handing down this report after a drought of such duration. It shows their total lack of understanding. Obviously, they had their riding instructions and were sticking to them.

Water: when we put all forms of agriculture, whatever it was—horticulture, broadacre—under EC it took away the issue of irrigation, which at one stage was treated differently. After a few years of drought we did bring in a system of EC for irrigation whereby irrigators could apply separately. Once we made it a level playing field in that sense irrigation was able to be part of normal EC. Even if broadacre, dryland agriculture has had rain—and I am not conceding they have made money; I am conceding that in areas they have had rain—irrigation has not. Irrigation is now going to be stuck out there without water. You only have to look at the dairy industry along the Murray. Gippsland might be fine but the dairy industry in the Mallee and along the Murrumbidgee, the Lachlan and the Macquarie is still totally devastated. It is in enormous trouble.

We changed the rules not because EC was necessarily totally wrong originally but because drought two years on is one thing but all that time is another. We changed it to take into account the severity and the length of the drought. Irrigation is getting worse, not better, and yet it is being wiped with everything else. In areas that are being taken out of drought, where there is irrigation they are losing EC along with the dryland. Even if the dryland has had rain and is able to take advantage of that for sowing crops, fattening stock or getting store stock ready to sell, irrigation does not have that opportunity because it has no water. I think the government and the minister, if he is fair dinkum, should look at those areas where EC is presumed not to be necessary for dryland—it is certainly still necessary for irrigation and I believe that should be looked at.

Minister Burke looks anxious to speak and I am sure he is going to reassure us on all those issues so I am not going to speak all morning. The issues on EC are far from over—it does not rain money; it rains opportunity. The government is not taking that into account. That is not NRAC’s fault. As I said earlier, before the minister was here, I thank NRAC for their job. It is not a pleasant one. I do wonder if we are extending the term that people can serve on NRAC because they intend to do as the budget papers say and cease drought programs and they do not want to have new people coming in who are not used to it. I do not actually have a problem with the people who do it. We probably appointed most of them, if not all.

Mr Burke —All!

Mr JOHN COBB —I thought that might be correct. As I said earlier, I think Keith Perrett has done a good job—being chairman of that body is probably a pretty thankless job. I hope the reason for extending the term of service is not because you intend for it not to exist anymore.

The interest rate subsidy, as I said before, has a very big social component—if not for the farmers concerned then for the towns that depend on the money that the farmers spend. I am well aware that the small business side has not been taken up to a big extent partly because they have a totally different structure from farming. It has not been taken up to a large extent by the town small businesses.

Minister Burke, I think you have been too frightened to change it in case you make a mistake. We changed it a lot to take into account the changes and also the length of the drought. You should too. Come to us for advice on what to do and how to change it, if you want. I am well aware that you are much more fascinated by the National Party than you are by agriculture. That is fine—we are quite happy for you to concentrate on us; you won’t be concentrating on your politics! This is an extraordinarily serious issue. To simply assume that if you do what we did you will keep it out of trouble is not true. Some areas now have gone even longer into drought. I never dreamt I would see a drought go this long in my lifetime; I never want to see another one. Irrigation is something the government should think about. The irrigators have not had water even if the dryland people have.