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Inconsistencies between states in EC assessment.

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THE HON DR SHARMAN STONE MP Federal Member for Murray Shadow Minister for Immigration and Citizenship

Monday 2 March 2009

Inconsistencies between states in EC assessment

The inconsistencies between the states in granting exceptional circumstances interest rate subsidies to drought stricken farmers is causing serious hardship and is unfair, Federal Member for Murray, Sharman Stone said.

“Eligible EC recipients, both farmers and small businesses can apply for a 50% subsidy of interest payments in the first year and 80% in year two.

“Over 90% of the EC payments are provided by the Federal Government, however the subsidies are decided and administered by each states equivalent of a Rural Finance Authority (RFA),” Dr Stone said.

“One of the key criteria for EC interest rate subsidies is that there is a significant down turn, not necessarily that the farm be in deficit.

“In Victoria, the RFA has decided that EC eligible farmers and businesses will only be eligible for interest rate subsidies when their cash flow shows a trading loss.

“In NSW the Rural Assistance Authority only requires a significant downturn in farm income to be experienced, taking into account cash flow, profit and loss, debt levels and debt servicing. A small profit does not rule the subsidy out for applicants.

“You can imagine how frustrated Victorian applicants feel when they see their neighbours across the Murray River receive substantially different treatment in what is supposed to be a nationally consistent support package.

Sharman Stone has drawn the Federal Minister for Agriculture’s attention to these inconsistencies and asked that he urgently directs states to be consistent. She has asked that he also compare the number of knock-backs of interest rate subsidy applicants between the states.

“Both Authorities are working from the same set of guidelines but it appears they are interpreting them quite differently and that the Victorian RFA is being unduly harsh. This means fewer Victorian farmers will survive the drought, and that is not fair,” Sharman Stone said

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