Drought Support Factsheet
Kevin Hogan spoke in parliament in support of the Federal Government’s new Farm Household Support bill
Mr HOGAN (Page) (17:10): I will eventually bring the discussion back to the Farm Household Support Bill 2014, which I have not heard a lot about in the last 15 minutes. I do want to take up what the member for Kennedy just said. He has raised some interesting points. He made reference to the contribution by the member for Wannon, who spoke earlier. Some of the statistics that the member for Kennedy just cited are true. Our agricultural sector certainly faces some serious challenges, and they are issues that we need to get right.
The member for Kennedy challenged any member of parliament to give him a positive or an optimistic agricultural scenario. My electorate shares the challenges that he describes in the sector. One of the biggest private employers in my electorate is an abattoir. They certainly were very much harmed, as the industry was, by the live export ban. We saw cattle prices decrease significantly because of that.
Mr Katter: That helps the abattoirs.
Mr HOGAN: Well, it did not help them, because all the cattle that were supposed to be sold offshore moved south and, as they moved south, our market was inundated with cattle, which completely depressed our prices.
Mr Katter interjecting—
Mr HOGAN: It does, but it certainly did not help industry. I think that harmed the industry, and the drought certainly has not helped either. The positive story I have to share with the member is that they have been actively searching and finding new markets for their product. There have always been an exporter of their product. Almost 70 per cent of their product gets exported. For example, 18 months or two years ago China bought hardly any of their frozen boxed beef; it is now a significant buyer of their product. They are optimistic about their future. They are a cooperative. The cooperative is positive about their future. With rain—which I will get to in a minute in relation to this bill—they are very positive about what can happen when the restockers come back into that market.
The member for Kennedy mentioned the dairy industry. I have a dairy cooperative in my electorate, and they too are very optimistic. They have certainly faced challenges with the supermarket duopoly, which the member spoke about. But they too are positive, because just this month they accessed a new market in Asia, not just for dairy but for fresh milk. This is because of what is happening with some of the export protocols that we are dealing with, one of which relates to Korea, where tariffs on our agricultural products have been reduced. So, I say to the member: I hear you on some of the challenges faced by the agricultural industry, but there are positive stories out there. I certainly share the member for Wannon’s optimism on agriculture.
I do want to talk about the bill that we are supposed to be debating. I would like to share with the House a letter written by a dairy farmer in my electorate. It refers to the drought, an issue which makes this bill so important. It was written by Leigh Shearman, who is a member of the Far North Coast Dairy Industry Group, DIG, and I have Leigh’s permission to share it with you. In writing to the manager of North Coast Local Land Services in Kempsey, Leigh states:
I am writing on behalf of the Far North Coast Dairy Industry Group, our group represents 145 dairy farmers from Murwillumbah through to Grafton. The situation is deteriorating with every week that passes and no rain in sight. With pasture growth now non-existent and with only very limited dairy farmers able to irrigate under their water sharing agreements.
The cost of conserved fodder, which a majority of farmers are now totally reliant on, is escalating and very hard to locate. Corn crops that a lot of dairy farmers rely on for supplementary feeding when times are tight are only yielding very minimal returns, as is with a lot of silage crops. Dairy farmers are high grain purchasers and with the failed crops now really starting to push already high grain prices even higher the cost of production is rising beyond milk returns.
We cannot impress strongly enough that you keep dairy farmers in mind and act as quickly as possible to implement any support that is available. As most are aware dairy farmers are struggling financially under the cost of production and the climatic conditions are placing an enormous financial burden once again on an industry that is an important industry to our region.
If you would like further information I would be very happy to be of assistance.
That is a letter from a farmer who is obviously being affected by these climatic conditions.
Before going to the bill specifically, I would like to share a conversation that I had just recently with a person in my community, Anne Thomson from Eltham, who has supported drought appeals for 20 years and encouraged people to support people in drought, wherever the drought seems to be or where the money is needed. Obviously, there are times when there is no drought. She focuses on sending money, food and Christmas presents. She has no idea of how much, but she has raised tens of thousands of dollars over many years for drought affected people. An important point is that she often comments that the people giving that support are often pensioners, old people or people with very little income. They come along and see her every fortnight after they have received their fortnightly payment to give her a bit of money or a bit of food to share with people in drought. She has sent assistance in previous years to areas like the Riverina. This year she sending a lot to Brewarrina and Walgett and as far away as Lightning Ridge. One of her distributors, Betty, who lives between Moree and Mungindi, has been nominated for a senior citizen of the year award for distributing those gift parcels.
I wanted to start with those examples because they show two things for me: the real financial consequences of drought, as the letter from the dairy farmer showed, and the help that we see from everyday mums and dads trying to help people who need assistance. I think they are a good introduction to the fact that we as a government should also be providing some of that type of assistance.
One thing that I think we need to stress—and there have been a lot of conversations about this in relation to other industries—is the point that was made by the member for Parkes that this is not a handout; this is a hand up. This is not a structural problem for farmers. Our farmers, as was said, are some of the most efficient farmers in the world, and they have to be because we as a country give them very few subsidies. If you look at other countries around the world, they give huge subsidies to their agricultural producers—we have read about them and they have been well articulated in this place. We do not do that. We have made sure that our farmers are the best in the world because they have to be to survive. So this is not about a handout; this is about a hand up.
Climatic conditions are deteriorating as we speak. This bill, which introduces the farm household allowance, is a once-in-a-generation reform of government support. The timing is appropriate not just because of the drought but also because it is the International Year of Family Farming. We are also proposing this bill now because this cannot wait until 1 July when it was originally due to come in. It will replace the Farm Household Support Act, including provisions relating to the exceptional circumstances relief payment, and makes support much more responsive to farmers’ financial hardship. It will provide time limited three-year payments and support for those eligible to improve their situation without the need for a climate trigger. The three-year support will provide farmers with time to plan for the future and to achieve financial security and self-reliance.
It includes a $2.55 million net farm assets test, which will be indexed, and off-farm and liquid asset threshold aligned with Newstart allowance, which excludes the principal home. This is higher than the mainstream assets limit in recognition that farm assets are relatively illiquid, especially—as you would appreciate, Deputy Speaker Mitchell—when these payments are needed and cannot be relatively drawn on for self-support. There is an income test consistent with Newstart allowance, but with a provision that means that off-farm income will not be regarded as income when it is used to pay interest to a bank or commercial lender. There are also provisions for automatic entitlement to a Health Care Card and waiting periods the same as social security payments.
There is support for the Department of Human Services to assess farmers and help them develop a financial improvement plan. I want to go into this in a little bit more detail later, but this is a really important part of this bill. It provides counselling, financial or otherwise. Farmers tend to be a fairly proud lot. They are obviously not employees; they are running their own business and are usually fiercely independent. So to ask for help, whether it be financial or otherwise, when they need it can sometimes be difficult. So part of this is to encourage that and to make access to that easier. It will also support farm families to educate their children. Parents receiving the allowance automatically meet income test provisions for the child’s youth allowance.
Before I go into some of the details of the bill more in depth, I want to make a point because I was somewhat taken aback by the pessimism of the member for Kennedy’s views on agriculture. I think we need to look at the positive contribution that it is making and the fact that, to my mind, it has great potential to grow. It generates now over $47 billion in gross value of production, so it is one of the main five pillars of our economy. Agricultural exports just last year were worth $38 billion. This is real money. This is money produced by the private sector, the agricultural sector. They are paying taxes. They are generating real wealth for this country, and I am very confident they will continue to do so.
Just in my region, the agricultural sector generates more than half a billion dollars, or about five per cent of our gross regional product, and employs directly over five per cent of the workforce. Most of these are small family-owned operations. I alluded to it before; there are some very positive stories out there in my community and I know they are replicated across the country. I have a dairy cooperative and a meat cooperative that have a positive story to sell. They are gaining access to new markets. They have new buyers who, come good weather, are going to push up prices, I believe, for many agricultural products. I have a blueberry farmer who is building quite an operation in my electorate who is very excited about his prospects of gaining access to markets in Asia and will employ—
Ms MacTiernan interjecting—
Mr HOGAN: We love blueberries. We realise that blueberries are a wonderful anti-oxidant and we encourage all agricultural products. We have some of the most efficient farmers in the world. We need to help them in this short-term period, while climatic conditions warrant it.
I will put on record some of the specifics of this bill. The interest rates on the new drought concessional loans will be set lower—that is 0.5 per cent below the interest rate for the farm concessional loans. The previous speaker was talking about interest rates; the interest rates under this will certainly be lower than they otherwise would be. There are things in there for counselling, both financial and otherwise. There is a review, as part of this, that looks at drought preparedness, because while you can not necessarily prepare for all droughts—especially one that, in some cases, has gone on for so long—there are certainly ways that we can improve what we do. This bill will help with that. The drought concessional loans are going to be available to drought affected farm businesses that have already taken steps to prepare for the effects of drought, but which with some financial assistance can do more.
I will finish on the topic of my optimism for this industry. Fifteen or twenty years ago, people were very critical of the mining industry in the sense that it did not negotiate hard enough. It was not getting good enough prices for its product. Back then there were the BHPs and, I think, it was Western Mining then, not Rio Tinto. Their main buyer back then—their sole buyer, really—was Japan. What happened was that we had a new buyer who came into the market and greatly increased the prices and the viability of that industry. I am very positive about the agricultural sector and I support this bill to help them over their short-term climatic conditions.
Mr Katter: Mr Deputy Speaker, I raise a point of order. I claim to have been misrepresented.
The DEPUTY SPEAKER ( Mr Mitchell ): Does the member claim to be misrepresented?
Mr Katter: Yes, I do, Mr Deputy Speaker. The previous speaker said that I had attributed this to the current federal government. That is not entirely true. I attributed it to this government and the previous government, but most of all to the Rural Action Council of North Queensland. They have developed the proposal and brought it forward and carried it by themselves for 10 years.
The DEPUTY SPEAKER: The Speaker made it clear today that if we are going to have these, you should check the record and then come back and do it. That would be good.