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Wednesday, 19 September 2001
Page: 31072

Mr NEVILLE (11:28 AM) —I would like to commence my comments on the Social Security and Veterans' Entitlements Legislation Amendment (Retirement Assistance for Farmers) Bill 2001 by saying that Australia's agricultural industries are vital to our national prosperity in terms of export and employment and as the economic foundations of our regional and rural communities. I do not share the pessimistic view of the member for Corio, and I am quite sure that his figures about young dairy farmers are quite wrong. My understanding is that, with the deregulation of the industry, a lot of younger people, certainly in Victoria, have been attracted to it.

Provincial cities, like Bundaberg, rely on agriculture to drive their economy—sugar and horticulture and, to some extent, beef cattle and, to a lesser extent, dairy cattle. These all contribute strongly to the economy of the area. Travelling further west to Childers, the economy is completely reliant on agriculture, as is the Boyne Valley on cattle and timber. Further north, the Miriam Vale Shire is a major cattle producer, with some small crops in the area and, I might add, some very innovative dairy farmers.

I interpose here for a moment to compliment Mr Bruce Polzin who, when the dairy deregulation measures came into place, instead of retreating from the industry actually built his own boutique factory—a very ambitious move which he did, I might add, without government assistance; and it grieved me that he could not get government assistance. He built a factory—I guess it would have cost somewhere in the order of $1 million to $1.25 million—and he now turns out a quality of milk which he calls Baffle Dairy. It is beautiful milk which is available in both full cream and trim. In addition, he makes the old non-homogenised milk in which the cream comes to the surface—and it is a long time since Australians have seen that. The extraordinary thing about it is that, in every store you go to in the Bundaberg and Gladstone areas that carries this milk, even though there is a slight premium on the price, it is enormously popular because people like the taste of it.

Mr DEPUTY SPEAKER (Mr Quick)—Do you drink it?

Mr NEVILLE —Yes, I drink it unashamedly. Recently, we had a garden expo and leisure field day. He had his milk there and he was testing his flavoured milk—and, again, it was enormously popular.

We hear a lot of talk about gloom and doom in primary industry, but a lot is happening. Even in my own electorate, in addition to Bruce Polzin with his very innovative approach and the involvement of some of his neighbours who produce milk for his factory, farmers in Childers are growing a variety of tree crops and small crops. Bill Trevor, who is the mayor of that shire, is arguably the largest grower of zucchinis in Australia. John Dorrian makes guacamole from his own avocados and sells it in bulk to the various dip manufacturers and people who make paste and the like in the delicatessen field. David De Paoli grows a variety of chillies and presents them in very attractive vacuum packs. His chillies are now in high demand all over Australia and he has also developed a huge export market to the Middle East. His presentation of the various colours of chillies in the vacuum packs is particularly attractive. The Steinhardt family has developed a method of serrating vegetables into various forms—some with oils, some in natural form—and they are using a special process whereby the vegetables maintain a shelf life of up to six weeks. They are all very innovative people. At the other end of my electorate, the great farmers of the Yarwun-Targinnie area are arguably the best pawpaw growers in Australia and they also grow a variety of tree crops. So I do not share the pessimistic view that the member for Corio has.

Australia's traditional strength as an exporter of primary produce continues to underpin our national economic performance. This year, our primary industries will generate about $24 billion in income. It is pleasing to see the recovery of the beef industry and also the completion of the dispersion of the wool stockpile. It is a tough year for sugar producers, but they are hanging in there and, in my own area, hopefully in the next 12 months some of the sugar farmers will be growing chicory as a second crop.

Since 1996, the coalition government has provided a stable pro-growth business environment, characterised by low interest rates, low inflation, a more flexible labour market and a tax system which rewards enterprise. They are four very important ingredients. They are not always talked about in the context of farms. Remember the days when interest rates were up at 17, 18, even 20 per cent, with high inflation, high unemployment and all those things. When you are in an environment where they are not present, there is a greater incentive to do something about it. Again, referring to the member for Corio's contribution, it is in an environment like that that young, well-educated people will go back to the land and have a go. The government has done a great deal in that field to reward enterprise and to show young people that there is a future in farming.

Australia has enjoyed a sustained period of high growth on a scale not seen since the 1960s and matched only by the performance of the United States. Just seeing the words `United States' brings to mind the success that the government has had through the Minister for Trade, Mark Vaile, being able to get more of our lamb into the United States. That was an enormous win for Australia and the minister should be complimented on his negotiations.

The government has also sought to redress the neglect of the previous government in areas vital to agriculture. I found the presentation of the member for Corio disingenuous in the sense that, in the 13 years when Labor was in power—and I do not want to be unduly political in this speech—there was not much happening in the bush. Some of the measures, like the wool stockpile, have been there to haunt us ever since—or until recent times, anyhow.

One of our best packages was Agriculture—Advancing Australia, which put together a comprehensive set of measures to strengthen agriculture. The AAA package—as we refer to it—was introduced in 1997 and extended again in the year 2000. It will inject $800 million into agriculture and fishing industries to support education, training, innovation and adjustment. This support complements $180 million a year that the government devotes to research and development in that sector.

As successful as the AAA package has been, the government recognises that the future of agriculture is dependent on more than measures that enhance competitiveness and efficiency, as important as those are. The purpose of this bill is to amend the provisions of the Social Security Act and Veterans' Entitlements Act applying to the Retirement Assistance for Farmers Scheme. The amendments will enable qualifying farmers who were unable to finalise the transfer of their farm by 30 June 2001 to transfer their farm after that date and continue to qualify for the RAFS.

The RAFS was introduced as part of the Agriculture—Advancing Australia package announced by the Prime Minister and the then Minister for Primary Industries and Energy, John Anderson, on 14 September 1997. It provided assistance for older, low income farmers who wished to give away the farm to the younger generation without having their pension entitlements affected by the age pension assets and gifting provisions. Prior to 1997, I saw some terrible cases in my first years in parliament—especially under the previous government. Quite often you would see a situation where two sons had grown up on a farm which may earlier have been reasonably successful and each son had married and three families were then living on the farm. That became a trap as dad moved towards retirement or passed the retirement age and three families would be trapped on the farm, with the boys wishing to take over the farm but the father not able to gift the farm for fear of losing social security entitlements.

It was a tragic thing. In fact, I saw families who were trapped in a poverty cycle well below the social security level. It was a dreadful circumstance. It was one of the most appalling things to see. It was almost government—and I am not saying capital `G' government; I am saying small `g' government—imposing a structural poverty on people. I think that the RAFS has gone a long way to ameliorating that grave injustice. My personal view on it—it is not the government's view and I do not pretend that it is—is that $500,000 is perhaps too low a limit. I would like to see it perhaps in the range of $650,000 to $750,000. No doubt that will be a challenge for us in our next term of government.

While the RAFS commenced on 15 September 1997, it was also open to farmers who had gifted their farms to a near relative in the five years before that date. To qualify, a farmer must have owned the farm for at least 15 years or must have been involved in farming for 20 years, must be an Australian resident or living in Australia, and must be of age pension age or had a partner who was of age pension age on or before 30 June 2001. The farmer must be legally transferring their farm to a person of the younger generation who had been actively involved in the farm enterprise for three years preceding the transfer and must be on an average income for three financial years before the farm transfer or for the three financial years prior to 30 June 2001—whichever was the earlier—equal to or less than the age pension rate. As I said earlier, a lot of people in those circumstances were getting less than that. Another feature of the scheme was that the net value of the total farming enterprise being given away had to be less than $500,000. We should have that in our minds should this scheme be repeated or should something similar to that be done in the future—a challenge for a future government.

When announced, the RAFS was intended to run only to 14 September 2000 and it was estimated to cost $77.6 million. It was extended to 30 June 2001 at an estimated cost of less than $7 million. In the first year, 716 farmers, including spouses, accessed the scheme through either Centrelink or Veterans' Affairs. A further 212 farmers were assessed as eligible once they transferred their farms. In the second year of the scheme, 846 farmers, including spouses, accessed the scheme through Centrelink or Veterans' Affairs, and a further 165 farmers became eligible once they transferred their farms. Some 1,500 in total were assisted as of 28 March 2000.

This is by no means an isolated measure. The government has also listened to the concerns of farmers in implementing the changes to the treatment of private trusts and private companies to ensure that succession planning for farms is not adversely affected. It is also providing a $17.4 million over three years extension to the Rural Financial Counselling Service, a very important measure. Something the previous government never could understand was that farmers provide the backbone of regional Australia, and farmers were seldom listened to before. In 1996, 21 per cent of farmers were aged 60 or more. The government has put in place measures to assist farmers in succession planning and to assist those who were already too old to benefit from these changes to the industry. Another example of this commonsense approach to farm families is the family assets test that applies to dependant claimants for youth allowance. Normally for youth allowance the family asset limit is $438,250, but a 75 per cent discount for farm and business assets applies to the family assets test. That has also been of great assistance to people on the land and to the young people who live with them.

Farm help is another example. Its origins are in the Family Farm Restart Scheme that was announced in the AAA package in September 1997. The four key components are: income support payable for a maximum of 12 months at the Newstart allowance rate, with a partner component; a reestablishment grant of $45,000; the obligation to obtain professional advice on future viability, and a $3,000 grant to assist with that; and a retraining component of $3,500. I think you can see that the government has been concerned. It is a structured measure. It was put in place—and this extension is part of this—to help those farmers who were caught in a poverty trap and particularly those who were having trouble towards the end of the scheme unloading their farms in the requisite time limits.

I think we should take a more optimistic view of the Australian farm community. It is now enjoying, in many commodity areas, the best prices since the 1960s. We are seeing the benefits of good trade promotion. We are seeing the benefits of innovation on farms. We are seeing the reestablishment of older Australians, with appropriate social security benefits, off their farms. I have no hesitation in commending this bill to the House.