Mr RAMSEY (Grey—Government Whip) (18:31): I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No.1) 2020. This is the latest set in a group of modifications that the government has made in recent times to farm household assistance. While I fully accept that some parts of Australia have had good rain—in fact, more than ample in some places—there are a lot that are still pretty dry. We had a recent rainfall event not far from me. About 10 kilometres up the road there was 50 or 60 millimetres of rain, and we managed nine on my property, so it’s still pretty dry around there. Through South Australia we had some moderate rains, but they were a while ago now, and through much of eastern Australia, and even Western Australia now, the drought has still got a firm grip. We hope it’s loosening, but until that time the government needs to remain strong, support communities and support farmers to help them stay on their properties so they’re there when the rains do return.
What happens here is we’ve got this farm household allowance payment. As people access it, they come to people like me and other members of parliament, and to the rural councillors, and say, ‘It’s really difficult to fill out this paperwork; it’s really difficult to tick all the boxes.’ So we’ve gone along a path of simplification. These amendments are the next step in some of this simplification. We’re trying to remove some of the pitfalls and traps for people who aren’t necessarily used to dealing with copious paperwork. Even where they are, it is difficult enough. Even farm business advisers tell me this is a difficult path to access this support measure.
The first set of amendments remove the provisions that have given rise to income reconciliation. Rather than the person having to report what their income has been over the last fortnight, they make an estimate of what their income will be over the next 12 months. If they underestimate that amount and they receive too much income then they have to send payments back to Centrelink. What we’re doing now is just basing those payments on current income. It simplifies it greatly. They don’t have to worry about what’s going to happen next year or indeed what happened two years ago. Now they merely have to focus on the amount of money they are earning at the moment. They will report that, and that will be the simple reporting process.
The other thing we are doing is providing for a single rate of the farm household allowance. For those that don’t readily understand what happens, it’s a bit like with the pension; there’s a taper in there. If your income goes up a bit, you lose some of the farm household allowance. If your income goes up a bit more, you lose a bit more, and eventually you reach a threshold where it disappears altogether. And obviously the opposite is also true. This means that as a person’s income that they have been reporting every fortnight goes up or down—depending maybe on what off-farm income they have earned or sales from the farm—their taper rate has been adjusting as well. It’s been a pitfall for people. They are really concerned that they are going to get a bill at the end of the year for having accepted too much money in the first place. So we are removing that taper, we are flattening it out. There will be one payment for all people. If you qualify you qualify, and you’ll get paid. If your income is too high, you will not get paid. It’s quite simple. That should provide some real relief to people.
We need to put our head in the space of people who are facing drought. I’d been through a few tough ones before I got to this place. I can remember sending my wife off farm in the mid-eighties to go to Whyalla, which is 170 kilometres away. She was pregnant. I had the slightly under two-year-old in my care as I wandered around the farm making sure the jobs were done. It was a tough time. We’ve been challenged through our farming life; it was not the only time, but that is a graphic example.
And, in amongst all that, it’s not easy to actually go and ask someone for some help. And then, when you are asking for their help, you’ve got to bare your soul to get the payment. So the government is recognising that. We can’t go recklessly throwing taxpayers’ money around. We have a responsibility to the taxpayer to ensure that the money is going to the right people. In this case, by this simplification process, we are removing some of those obstacles and making it easier for people, but we are certainly not removing the rigour altogether.
One of the other amendments is to remove the 28-day time limit for a farm financial assessment—the assessment which clarifies whether you are eligible for the payment in the first place and have a viable ongoing concern. One of those very interesting things about drought support of any kind is that somebody has to make an assessment—whether you are just prolonging the agony for somebody trying to hold onto an almost extinct farming enterprise or whether they’ve got a real future if you get them through a tough patch. So it’s important that we don’t give money to people who have an underlying unviability; we need to actually support those who have an opportunity to press on and be viable farming families in the future. So instead of having a really tight time frame of 28 days, which is very difficult for people to meet—they are not always able to get the right person to make the assessment in that time—we are providing individual flexibility to meet those arrangements and of course find the person to make the relevant assessment. Those are the points I wanted to make in connection with this legislation.
It is worth also going back over some of the changes we have made in recent times. It was back in 2019 that we made the decision to lift to $5 million the maximum net worth of properties eligible for farm household assistance. Some still argue that that’s not enough. I think it is substantial. You would have to be a very big farming property indeed if you had $5 million of equity left and a banking institution would not advance you enough money to put food on your table. If you have a $100 million farm and you are only worth $5 million, that’s the least of your problems; by the time you’ve got to that point, you need to be making those tough decisions about your future anyhow. I think that was a very good change and it enabled people with moderately sized farms and moderately sized debts to get some assistance.
One of the other changes made in the second instalment was a change in eligibility to access this assistance from four years in each specified 10-year period instead of four years in the lifetime of the farmer. It means that, if another brace of droughts comes around in the next decade, these people are not automatically excluded from any kind of assistance that might have been around at that time. And these droughts are periodic, and cyclical. It seems not so long ago that we had the Millennium Drought but of course there was a decade between the Millennium Drought and this current drought. So it was quite a while, but for those who are in the game it seems to come often enough. And while different assistance was offered back in the Millennium Drought, it could well be that the same arrangements are in place the next time this level of drought comes around.
The other one was for the simplified assets test, for couples to be able to report their assets as one entity rather than dual entities. Once again, it is about clearing up paperwork and trying to make life easier for those who need the support at this time. But it does give me an opportunity to talk about some of the other very positive things that are happening around supporting farming communities in drought. There are 20 councils, I think, in the electorate of Grey that now have the Drought Communities Program operating, so those million-dollar payments are coming through those councils.
One of the most important forms of assistance that has ever been offered to Australian farmers and one that I made use of when I was farming was farm management deposits. I think they are the single most helpful thing that governments can do to help farmers. Recently, about two years ago, we lifted those cap limits, so each person could have up to $800,000 in farm management deposits. We made changes so it enabled banks to use the farm management deposits to offset borrowings. A farmer might, let’s say, have an overdraft with a bank that might be $800,000. They might be paying an interest rate of somewhere around five per cent. They might only be earning two per cent on their farm management deposit and that difference is quite significant. So if the farm management deposit was, say, $500,000, effectively the overdraft they would pay the interest on would only be $300,000. Banks were a little reluctant to take this up in the first instance, but I understand now a number of them have and I congratulate them for that. I think we should all be working together to make sure that we do have productive enterprises out there to capitalise on rain when it arrives.
It makes sense to me that we provide encouragement to governments for farmers to actually make preparation for the inevitable droughts and that’s what farm management deposits do. I’m given to reflect that even now, after the droughts we have had, there is over $5 billion held in farm management deposits around Australia. While I can’t categorically rule it out, I would suggest that if anyone has significant amounts in their farm management deposits, it probably means they’re not drawing on farm household assistance and they’re probably not drawing on farm loans. It is like superannuation. You can see the benefit of actually providing the incentive for farmers to put aside this financial haystack for the tough times ahead because that enables them to be completely in control of their future, make their own decisions and not have to rely on the taxpayer to come along and bail them out.
All in all, I thank the government for these latest changes. They are not earth-shaking but they are a significant improvement and a significant relief to those people who need to fill out that paperwork—tick the boxes, cross the other boxes, make sure they say the right words in the right place—and it takes a bit of pressure off people who are under a lot of pressure already.