Subjects: drought; free trade agreement; sugar industry
E&OE...........
JONES:
The Prime Minister's on the line. Prime Minister, good morning.
PRIME MINISTER:
Good morning, Alan.
JONES:
Prime Minister, Canberra's found out at last there's a drought on.
PRIME MINISTER:
No. We've known that for a long time, a long time Alan…
JONES:
It's taken you a long time to do something about it.
PRIME MINISTER:
I don't think that's fair. We have been providing a lot of assistance via the Exceptional Circumstances and also the Farm Management Deposits now for quite a long period of time. Peter Costello indicated yesterday that this year and next year the cost of the Exceptional Circumstances on a conservative basis is about $370 million and the tax incentive effect of the Farm Management Deposits, which is a scheme that allows people to put away money with a tax advantage in a good year so they can take it out in a bad year, which is clearly this year, is $460 million this financial year. And there is no limit, can I say, on Exceptional Circumstances. If the whole of Australia, theoretically, gets declared as being in need of exceptional assistance, then that figure of $370 million will multiply enormously.
JONES:
PM, with respect, with respect, Exceptional Circumstances - just take NSW alone - if these people qualify, they get $600 a fortnight which wouldn't even pay the petrol bill and you couldn't live on $600 bucks a fortnight.
PRIME MINISTER:
They also get business assistance, which is a subsidy on their interest rates…
JONES:
On their interest rates, that's right. They get a subsidy…
PRIME MINISTER:
And thanks to recent policies, interest rates now are a great deal lower than they were the in last drought…
JONES:
Sure. But if they get it, if they get it, they get $600 a fortnight. Now, in NSW alone there are, I think, up to ten applications have gone in - only four have been approved, one took months to approve. And when I asked people in the NSW Government to show me what all this meant, I was staggered to find that there are 700 pages of bureaucratic documentation for a exceptional circumstance application, 6 of them total 700 pages. Are we fair dinkum about helping these people or not?
PRIME MINISTER:
Well we are fair dinkum. I spoke yesterday when I was in Gunnedah with the man from the NSW agriculture department, who is actually putting together the Exceptional Circumstances applications for the area covering Walgett and we have agreed a procedure whereby as soon as we get it within a matter of days, as soon as the Federal Government gets the application, we give it prima facie approval unless it's bogus, and we don't expect any bogus ones, and that means the $600 you're talking about, that begins to flow immediately.
JONES:
But not the interest subsidies?
PRIME MINISTER:
Well, as soon as the exceptional circumstance thing has been properly vetted by us at a federal level, it then… the rest of it flows and it applies with effect from the time the application…
JONES:
Well, two were lodged on November 18, there's been no response from the Commonwealth…
PRIME MINISTER:
Which ones are they, Alan?
JONES:
Two covering the Riverina Rural Lands Protection Board on October 18 and an application covering that part of the Northern New England Rural Land Protection Board, north of the Brooksen Highway, lodged on November 18. There's been no response from the Commonwealth to either of those. And I can understand why some of them run to 180 pages.
PRIME MINISTER:
Well, I'll find out why, if they were lodged on those dates, why those particular…
JONES:
PM, $600 a fortnight.
PRIME MINISTER:
Yes, Alan. I understand that, but you must also understand that if somebody loses their job, that is the basic assistance they receive also. I mean, it's not as if we're discriminating against farmers. I know it is…look, ideally…
JONES:
If someone loses their job, doesn't have to pay to cart water, or feed stock, or pay school fees, or pay off debt.
PRIME MINISTER:
Well, it depends. I mean, look, everybody has a mixture of circumstances. If somebody loses their job in a country town because of the impact of the drought on the sales of the corner store that has employed them prior to them losing their job, that person can have a mortgage, that person can have some liabilities. I mean, I'm not arguing for a moment that $600 is a king's ransom. Of course it's not. It's a very small amount of money, but it is consistent with the basic income support that is provided to other Australians.
JONES:
So basically, the farmer in drought is just an unemployed Australian?
PRIME MINISTER:
No, that is… that Alan, that is unfair. He's not basically that at all.
JONES:
Well, that's how he's being treated.
PRIME MINISTER:
No, I don';t think that is fair either because if you look at the other arrangements that farmers have, farmers…
JONES:
Well, they haven't yet, Prime Minister. You're talking about other arrangements, they don't have them yet, this drought's not started yesterday.
PRIME MINISTER:
No, Alan, I realise that and nor has the assistance, as I outlined at the beginning of the interview, just started…
JONES:
You outlined at the beginning of the interview that exceptional circumstance would provide interest, interest subsidies and family income support. Only one application, only one in NSW meets those criteria and that's for Bourke and Brewarrina.
PRIME MINISTER:
Yeah, well the others will.
JONES:
Prime Minister, these people have been having to pay debt and interest on their loans for 12 months. This didn't arrive yesterday, the drought.
PRIME MINISTER:
Well, no. I realise that.
JONES:
Well, there is no income, let me tell you, no income support, no subsidy on interest payments for any exceptional circumstance applications so far as I speak to you, except for Bourke and Brewarrina - except for one application.
PRIME MINISTER:
There are other… where the prima facie case has been granted and applies in quite a number of other areas, the income support runs from the time that decision is made. That statement you made just in relation to Bourke and Brewarrina is not correct.
JONES:
Prime Minister, the Farm Management Deposits under this proposal which you've been boasting about…
PRIME MINISTER:
Well, I'm not boasting about.
JONES:
Well, you're saying it's there, farmers have got money. They can't take that out in the first twelve months.
PRIME MINISTER:
Yes, they can if they're in an area that's declared as exceptional…
JONES:
Since when?
PRIME MINISTER:
Since yesterday. I announce that yesterday.
JONES:
That's what I mean.
PRIME MINISTER:
[inaudible].. in Gunnedah.
JONES:
That's what I said. You've found the… you've discovered the drought yesterday. Since yesterday? They haven't been able to have any access to this until yesterday.
PRIME MINISTER:
Yes, they have if they comply with a condition.
JONES:
Yeah, they weren't able to take it out for the first twelve months.
PRIME MINISTER:
But that is, that is… can I just explain how this works. It means that if you have a good year, which many of them did last year and they had very high incomes many of them, they could put a section of that income without incurring a tax liability in a year of potentially high tax into this farm management deposit. And then in a bad year, providing they've had it in thedeposit for a year, they can take it out.
JONES:
Correct.
PRIME MINISTER:
And because it's a very bad year, they pay tax at a much lower rate.
JONES:
Correct.
PRIME MINISTER:
And it's been so popular that 43,000 Australian farmers have deposited $2 billion in this fund…
JONES:
And until yesterday, they couldn't touch it.
PRIME MINISTER:
Well, hang on. I mean, let me describe how attractive it's been so far because $2 billion has been put in and the revenue cost of that, and this is exactly what we wanted, has been $460 million this year. In other words, those farmers through the tax system have been subsidised $460 million the current financial year. Now, that is… I'm not boasting about it. I don't boast about these things, Alan, I'm just talking about it and I'm explaining the benefit that is available. I mean, that is a benefit that [inaudible] available. I think it's important…
JONES:
Until yesterday, they couldn't touch the money.
PRIME MINISTER:
Also, it is a benefit that is not available to other sections of the Australian community that suffer very significant fluctuation in their income. If you or somebody else listening to this program who's not a farmer has an extremely good year, you can't do that. To put aside against a bad year. Now one of the reasons we do that is that farmers suffer drought and face challenges that the rest of the community don't face.
JONES:
But the farmers still have to read in the paper that 16 of the 20 largest events projects in this country were blown out, the cost blow out of $5 billion, the Treasury have no trouble signing that check for $5 billion. Who pays to cart the farmer's water? Who pays for the stock feed? Who pays the school fees when you've got $600 bucks? This is the worst drought in a 100 years.
PRIME MINISTER:
It is a very severe drought and I'm not downplaying the significance of it for a moment. Of course farmers are in a very difficult financial decision. That is why the provisions I've talked about have been made. That is why I indicated yesterday that we were giving a lot of thought to providing assistance to farmers as they come out of the drought.
JONES:
But there's a HECS scheme, which allows money to go to students to fund their education, they pay later when their income stream allows them to. Why couldn't we immediately institute a HECS scheme for farmers, they don't want a handout and they'll pay the money back when the income stream allows it. What's wrong with that?
PRIME MINISTER:
It's one… a scheme similar to that are amongst those that were put to me yesterday and they are amongst a number of things that the Government is considering at the moment to provide help to assist farmers come out of the drought. It's one of a number of possibilities and in the past when things like drought and, ironic though it is to even talk about it in present circumstances, severe flooding has occurred we have provided people with assistance to get started again. And one of a number of things you can do is something like that and it is being considered. But I'm not going to say anymore about it at the present time, but is obviously one of those things that could be done.
JONES:
PM, your ratings, if they can believed, and they can be, indicate that you are the most popular Prime Minister for years and years and years. What that means is that the public are looking to you with a range of difficulties, terrorism is one and so on, to able to somehow address the issues as they see them. Now, we've also read headlines about fast tracking a free trade agreement between us and the United States. And yet we all know, you've only got to read between the lines, large slabs of agriculture won't have anything to do with any of this. There's no way in the world agriculture's going to be part of it and if you talk to the Americans or read the Americans, that's the case. Now, we've got a sugar industry in Queensland, there was a meeting yesterday of sugar farmers. It's on its knees, and even though you think you've done something, they say no-one is listening to them. They're being told by Government what they should do, but they are trying to say to Government that's not going to keep us alive. Are you prepared to allow the sugar industry to go out the door?
PRIME MINISTER:
Well, I'll come to the sugar industry in a moment. But you're not right to say that we've… we're not fast tracking the free trade agreement and as far as agriculture is concerned, if we don't get a fair go for Australian agriculture, there won't be a free trade agreement with the United States.
JONES:
Well, you won't… do you think the Florida sugar farmers are going to be part of the free trade agreement?
PRIME MINISTER:
Alan, nothing ventured, nothing gained applies in life and also applies in free trade negotiations and we're going to try and negotiate a free trade agreement. If we can pull it off, that will be of enormous benefit to Australia because America is a bigger…
JONES:
Well, they want a free trade agreement, but not agriculture.
PRIME MINISTER:
Well, we will see in the negotiations.
JONES:
All right. Well, can we come to sugar?
PRIME MINISTER:
…when the negotiations are finished and then your listeners can then make a judgement on whether we've stuck up for Australian farmers. But don't accuse us of selling out Australian farmers because we haven't.
JONES:
Well, we're selling out the sugar industry.
PRIME MINISTER:
… the sugar industry, Alan, is on its knees because of a very depressed world price.
JONES:
That's not true, Prime Minister, it's on its knees because the US farmer gets a Government subsidy of $640 a tonne. The Philippines farmer gets $600 a tonne subsidy. The European farmer gets a $730 a tonne subsidy. Our farmer gets nothing.
PRIME MINISTER:
Why do they get… they get that subsidy, Alan, because the world price of sugar is extremely low.
JONES:
And that's all our farmer gets, the world price - $270 bucks a tonne?
PRIME MINISTER:
And our sugar industry is in a difficult position. We have offered them, what I regard, as a very reasonable rescue package.
JONES:
What leave the industry for $45,000?
PRIME MINISTER:
Those who need to leave the industry, we will provide them with assistance.
JONES:
But why is America providing support to their sugar farmer of $640 a tonne, the Philippines $600 bucks a tonne, the European farmer $730 a tonne?
PRIME MINISTER:
Your argument, Alan, then is that we should provide the same level of subsidy as the Americans and the Europeans?
JONES:
Well, Prime Minister, if it means the sugar industry staying alive, yes. George Bush seems to think that should happen.
PRIME MINISTER:
Well, sometimes the Americans argue that they're in favour of subsidies and sometimes they argue that they're in favour of more open trade…
JONES:
If we don't do something…
PRIME MINISTER:
The answer, Alan, I've talked to farmers… farmers are not, quite rightly, as you said a moment ago, they're not asking for handouts and that's what a subsidy is.
JONES:
They're going to go to the wall, sugar farmers…
PRIME MINISTER:
They won't in my view and on all the information we have this rescue package is going to provide a future for those farmers who are viable and who can run their businesses well, it will provide some assistance to those who ought to leave the industry. Nobody wants to see people losing [inaudible]. When you have massive restructuring underway…
JONES:
You've just got massive overseas subsidies, that's all you've got. I mean, they had a rally in Townsville.
PRIME MINISTER:
We cannot, a nation of $20 million, cannot afford - I want to make this clear…
JONES:
So, let's just import all our sugar.
PRIME MINISTER:
No, no. It doesn't mean that. It means that we need to keep a sense of perspective and a sense of perspective requires us to recognise that if other countries are doing something that is corrupting the world market, we don't remove that corruption by trying to imitate them. And that is what reverting to the use of subsidies would involve. And of course subsidies involve a cost, they involve a cost - everybody who's listening to this interview…
JONES:
We didn't worry about that when we're trying to keep Mitsubishi afloat. We certainly forked out $85 million to keep them afloat, we didn't worry about subsidies then. Could I just ask you one thing before we go, Prime Minister, because this is very critical I've got to tell you. Every second letter I get and every second call I get is from someone who wants to sponsor a school to help them with drought, sponsor a family, sponsor a town, donate food. What machinery is in place to enable people to give when they want to give, not in money terms?
PRIME MINISTER:
Well, a lot of small business people told me yesterday that much in all as they appreciate the gesture that's involved when food parcels are delivered direct to farmers…
JONES:
I know, they wanted to buy it locally.
PRIME MINISTER:
They want it to be brought locally.
JONES:
Yeah, they want…
PRIME MINISTER:
So many of them were very alive to the fact that that is a point that you've been making very regularly in your interventions in relation to this. The best thing they can do is to contribute to your farmhand appeal because that is an appeal that is raising money. Cash contributions to an appeal like that is the best way that people can assist. It's far better than sending food parcels direct because what badly, what is badly needed in these communities is the circulation of money in the normal way of business because so many of the small businesses are suffering very very badly indeed, [inaudible] people that will need assistance…
JONES:
We better go to the news, but…
PRIME MINISTER:
…until it ultimately breaks.
JONES:
Well, I'm grateful for your time. We'll talk again soon.
PRIME MINISTER:
I'm sure we will.
JONES:
Prime Minister Howard.
PRIME MINISTER:
Thank you.
[ends]