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Tuesday, 3 December 2019
Page: 6765


Ms SHARKIE (Mayo) (13:23): The Farm Household Support Amendment (Relief Measures) Bill (No. 2) 2019 incorporates the third tranche of amendments to the Farm Household Allowance Program as foreshadowed by the government last month. Centre Alliance supports the steps taken by the government to bolster the financial standing of farmers and promote a resilient business model. The bill makes four changes to the program, aimed at addressing difficulties within the existing farm household allowance scheme—namely, reporting variable income, simplifying the assets test, broadening the class of persons able to conduct a farm financial assessment and, finally, increasing the activity supplement.

Many of the issues were explored in the independent review of this scheme, prepared on behalf of the department earlier this year. The report, entitled Rebuilding the FHA: a better way forward for supporting farmers in financial hardship, made six strategic recommendations, including strengthening the mutual obligation requirement in order to prioritise a meaningful mutual obligation process and putting the focus on long-term viability and structural change. Schedule 1 of the bill seeks to support long-term viability by ensuring farmers are able to pursue opportunities to improve their financial standing without fear of incurring a debt. Currently farmers are required to estimate their income each fortnight to ensure that they receive an appropriate rate of payment, noting that the income earned may reduce the payment they receive. The bill amends the scheme such that, provided a farmer does not earn more than the payability threshold of $984 for each member of a couple or $1,075 for a single, they're eligible to receive the full allowance for that fortnight. This will allow a single farmer to earn $1,074 per fortnight without any reduction in the payment received through the farm household allowance scheme. The measure provides farmers with certainty in an unpredictable business environment.

The independent review heard evidence of perverse outcomes whereby farmers were reluctant to generate additional off-farm income for fear of accruing an overpayment debt. While I recognise that farmers operate in a sphere that is dependent on a number of external factors, and that that fact should warrant some exceptions to the ordinary social services framework, the amendments proposed are unusually generous when compared to other welfare payments. For example, Newstart recipients often work in casual roles with ad hoc shift arrangements where pay cheques can vary wildly from week to week, yet they must report their income on a fortnightly basis, knowing that, when they do so, their payments may reduce as a result. My comments should be viewed not as a criticism of those who will receive the farm household allowance, nor of the amount they are entitled to receive, but rather as a need to review the adequacy of other welfare payments and the manner in which they are administered. Setting to one side the generous framework proposed by the bill, I also question whether this measure will achieve the long-term structural change that was recommended by the independent evaluation of the farm household allowance scheme.

Similarly, schedule 3, which amends the farm financial assessment requirement, is unlikely to promote an attitude of long-term behavioural change. The farm financial assessment has attracted criticism from both farmers and the Rural Financial Counselling Service for being little more than a tick-box exercise. While some farmers have meaningfully engaged with the process and have undertaken activities to improve their long-term circumstances, the review concluded that it did not promote behavioural change and did not provide farmers with a plan to escape their financial fate, only to delay it. The bill does not remove the requirement for a farm financial assessment but will instead widen the class of people who are able to conduct an FFA. This will enable more Rural Financial Counselling Service providers and other suitably qualified advisers to carry out farm financial assessments in regions that do not always have access to the prescribed assessors. It's a sensible amendment and one that I believe will improve the administration of the scheme.

However, if a farmer makes the agonising decision to leave their farm and pursue another career, it is reasonable to expect that there be some form of additional training required to facilitate that transition. This will be provided through the Farm Household Allowance Program as part of an activity supplement payment. The activity supplement payment is currently $4,000; however, in schedule 4 of the bill this will increase to $10,000. The $10,000 activity supplement sits as a credit to be drawn down once the activity is added to the financial improvement agreement and can be either reimbursed or paid upfront for a recipient to undertake an activity, whichever the person prefers. The increased payment takes into consideration the additional travel and accommodation costs often incurred by rural, regional and remote farmers who must travel to metropolitan centres to complete valuable training courses.

While it's disappointing that the bill makes no change to the mutual obligation requirements, it does address some of the issues raised in the report and supports the overarching objective of the scheme, which is to promote financial resilience. Another way to improve the financial standing of our farmers is not to increase welfare payments or make them jump through irrelevant administration hoops but to change the way our banks deliver their financial services to our farmers. That is what I've tried to achieve in my private members' bill, the Banking Amendment (Rural Finance Reform) Bill 2019. It's currently before the House of Representatives Standing Committee on Economics.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.