PRIME MINISTER:
Well ladies and gentlemen, I've called this news conference to announce the additional measures that the Government has decided upon to assist Australian farmers that are suffering very severely from what is becoming one of the worst droughts in this country's history. These additional measures, which on an annual basis will cost about $250 million, will bring to $1.25 billion the amount of additional government assistance offered to farmers to help them compensate for this very severe drought.
There are three major components of the additional assistance. I should firstly state that the streamlined Exceptional Circumstances measures whereby we have a streamlined approach to granting Exceptional Circumstances assistance will now become a permanent feature of providing EC assistance and this means that EC-declared areas nearing the end of their second year assistance will get the streamlined processes and in the first instance the 11 areas where EC declarations are due to cease by the end of 2005 will be assessed as a matter of priority and also in anticipation that some areas currently not EC declared but have previously been enjoying an EC declaration the relevant body, NRAC, will be asked to do a preliminary assessment and in the likely event of the drought continuing they'll be in a position to deal with those declarations very, very quickly.
But the three principle areas of change are as follows - effective from today the off-farm assets for EC business support, that is the interest rate subsidy, the off-farm assets, will be doubled from $217,500 to $435,000. That will mean that many farmers in EC areas previously denied the interest rate support because of their off-farm assets will benefit and will be able to apply for the interest rate support. Effective today, and this is the second component, the rate of the interest rate subsidy provided to farmers in receipt of business support will rise from 50 per cent to 80 per cent for subsidies paid in the second and subsequent years of an EC declaration. And the third component relates to the particular circumstances of farmers in relation to the welfare component of the EC support and subject to the passage of enabling legislation, from the 1st of July 2005 to the 30th of June 2006, farmers will benefit from a $10,000 annual off-set against the income test for the EC relief payment, that's the Newstart Allowance equivalent component of EC, and the new income test will apply to all farmers in EC areas. This measure will be reviewed before June 2006 to determine if the prevailing drought conditions and outlook warrant any extension.
In addition to that we are providing additional funds, some $800,000 to rural financial counselling services, and $1.2 million will be provided to appoint 10 additional counsellors in key areas affected by the drought. We're going to provide an additional $4 million to the Family Relationship Services Programme to fund organisations to provide vital face to face counselling and other support measures related to the drought. And we're also going to provide $3 million to the Country Women's Association emergency aid fund to allow the CWA to help meet immediate household needs of those farmers and their families who may otherwise be reluctant to apply for assistance. And the Government is going to hold a National Young Farmers Forum in Canberra in early September to bring together young people directly involved in agriculture and we'll continue the Young People in Rural Industries Programme until 2008 and provide the necessary $3 million to fund that continuation and I think the Government has already indicated that it will set up the new $10 million Envirofund round to allow individuals and community groups to access grants to undertake projects of up to $50,000. We have taken a few days to have further discussions with the National Farmers' Federation and with colleagues representing rural seats. We believe that this additional assistance is particularly directed towards keeping people on their properties, that is why we have significantly increased the interest rate subsidies, we have preferred that approach to cash grants because we think it is more tightly targeted, we think it more directly addresses the need for people to remain on their properties.
One of the features of this drought, so far, has been that the value of properties has not declined, rather the value of properties has either remained stable or continued to rise and another encouraging feature is that commodity prices are reasonable and other returns provided you can get some rain and get a return are reasonable and they are two reasons working to keep people on their properties and we think the premium should be on helping people who are otherwise quite efficient to remain on their properties. I believe that it's the right response, I believe it's a generous response but the generosity is completely justifiable and defensible and necessary. I have a very strong commitment, as do the two gentlemen standing with me at this news conference, to maintaining support for Australia's very hard pressed farmers, they are going through a very difficult drought, there is a lot at stake, the money is very well spent, they need it and I believe that most Australians will support its provision.
JOURNALIST:
Prime Minister, what assurances can you give that farmers won't exploit the doubling of the asset test? Is there not a risk that some rich graziers or...
PRIME MINISTER:
Well there is no system of assistance devised by man that can be completely free of some exploitation but, and Warren or John may wish to add to this, but the great majority of cases against which this is directed involve very modest situations where people may own a residence in a country town as well as a property and in some cases own a residence in a nearby hub city which provides accommodation for family members and I've had numerous examples provided to me of people who are precluded from the interest rate assistance because of the ownership of very modest alternative residence in some other part of the country. But you will always be able to find some isolated example but overwhelmingly I don't think for a moment this is going to be exploited.
JOURNALIST:
You say this is clearly designed to keep farmers on the land, what do you say to those people who believe that inevitably some farmers are going to have to leave the land because there is too much farming of so-called marginal land?
PRIME MINISTER:
Well what I want to say in answer to that Michael is that many of them have already left. I mean people have been going off the land now for decades and at some point if you want to retain a critical mass, you've got to be willing to work to retaining the critical mass. And the Deputy Prime Minister has expressed himself very powerfully on this subject and he might want to augment my answer but my answer very much is that such a charge would be reasonable if we hadn't seen people leave the land over the last 20 years, but they have left the land in droves over the last 20 years and I think a lot of the marginal farmers have already gone - and I'm not saying there aren't still some left but you must be getting to a point where many people who would otherwise be efficient, profitable farmers, are being beaten down by this terrible drought.
ANDERSON:
I would like to comment, but we are in a bit of national hand-wringing at the moment over the shortage of skilled people in a lot of professions - we will face that situation 10 to15 years down the road, I'm absolutely certain of that. In farming if we don't help a reasonable number of people through this particular period. But the other comment I'd make is, I hear these debates about marginal lands and maybe we shouldn't be farming them, I just make a couple of comments: it may involve some area but it would involve very few farmers, you'd be talking about the areas where the holdings are vast and few and far between numerically, and just to bring a commonsense test to that. In my own area at home, in the '65 drought, I saw a neighbour walk off and for 15 years that land was unoccupied and it became the most extraordinary haven for feral animals, for weeds, for erosion, for domesticated pigs going wild, just an environmental nightmare. So if we want to have this debate about marginal lands - that's a sensible debate to have, I don't deny that but don't think the answer is simply to take the people off it, it's not. If the community wants those areas looked after environmentally, they'll have to think about how it's going to be done. It's not a debate that we should shy away from but I think it's a quite separate debate to making certain we maintain the critical mass and bring enough skilled young farmers through-and the farm sector is terribly important and damaged not only by drought but as the World Bank's already told us, if the Americans and the Europeans would desist from their agricultural practices our farmers incomes would rise by 65 per cent.
TRUSS:
Let me add one other point in response to that issue. It may have been lost on some of the writers, that a farmer who is not judged to be viable is not eligible to receive interest rate subsidies-that's been the case ever since EC was developed. The state rural adjustment authorities make an assessment about the farmer's viability and they do not receive the assistance unless there is an acceptance that in normal circumstances he would be viable. Can I also say they don't receive the business support if they're assessed by the rural adjustment authority as being not in need of help, in other words if they've got sufficient resources of their own, they're not eligible for the interest rate subsidy, irrespective of the assets or income tests.
JOURNALIST:
Minister Anderson haven't your policies in industries like dairy, sugar and wool done more than anything else to encourage an exodus of farmers from the land? And what are doing to encourage the development of new industries in rural and regional centres?
ANDERSON:
Well I think there's the evidence that we recognise from time to time, you actually have to help industries adjust and it tragically does mean lower numbers, where, in the case of the dairy industry, the arrangements that were in place, were if you like denying some fundamentally important competitive pressures i.e. dairy is better suited to certain parts of the country than the other. It's one of those answers where I think you've got to take a balanced perspective and I just make this point, that unfortunately while you would normally and most farmers would agree with me on this, you'd normally leave that to the pressures of the market place. What you've got to recognise about Australian farmers is that they do not operate in a market place because we produce far too much food and fibre for domestic consumption, we have to operate on global markets, they don't operate as markets thanks to the taxpayers of Europe and America.
JOURNALIST:
Think of 100,000 farmers you talked about last week, can we see....
PRIME MINISTER:
Can we have somebody else who hasn't...
JOURNALIST:
Prime Minister is any of the Commonwealth's new drought assistance contingent on the States increasing their packages for the farmers in their own States?
PRIME MINISTER:
It's not contingent on the States increasing their contribution. I know historically they have carried a small portion of the interest rate subsidy, we assume that they'll continue to do that but I want the farmers to get the full benefit of this and I would be astounded if the States did not contribute the small portion that they do. I think EC is about 95 per cent Commonwealth-funded, at least 95 per cent Commonwealth-funded and only about 5 per cent. Look I'm not complaining about that and I'm not going to have an argument with the States about this but I would've thought there's an overwhelming obligation on them to join us in... and their far more modest way of helping.
JOURNALIST:
Agricultural scientists are saying that you should be taking a longer term view and putting more money into land care to encourage sustainable management of farming, why haven't you done that?
PRIME MINISTER:
Well we have already put an enormous amount of money into land care.
ANDERSON:
And if you really want to go down that road, have a look at the National Water Initiative and suggest to the States they might join us in a similar approach to native vegetation management. Restore the investment certainty and farmers will do the great bulk of it anyway. Deny them the investment certainty and you remove the opportunity for them to negotiate with their financiers to move to expensive, because they often are expensive, better practices.
PRIME MINISTER:
Native vegetation management is, has been listed for discussion, along with a lot of other subjects at the Premiers' conference meeting on Friday and enlisted by the Commonwealth.
JOURNALIST:
What about the argument Mr Howard that interest rate subsidies really only just encourage farmers to go greater into debt?
PRIME MINISTER:
Well that argument ignores two things . It ignores the reality that most of them have quite significant debts, I mean I spoke to an enormous number of people last Friday week and a typical indebtedness was in order of 6,7, $800,000 because of the very poor seasons they got into the situation of capitalising their interest obligations and you've also got to remember that if the aim of the game is keep them on the farm, it means that when it does rain they want to be in a position to plant a crop and if you've got no money, you may have to go a little further into debt in order to buy the seed to plant the crop to get the income to pay off the loan you've already accumulated. Now all of these things involve fine judgements but can I just make one other comment as the non-rural man of the trio that's talking to you can I say that we're not only talking here about the economics of farming, we are also talking about the maintenance of a critical mass of rural people which is part of this country's identity and part of the character of this country and there has to be a determination to preserve a viable farm sector in this country. I do not accept that you can just relentlessly say we'll let them all go, doesn't matter, doesn't matter, I think that is an attitude and mind that misunderstands the nature of this country and its history and when you are talking about support, the OECD acknowledges that the value of Government support of the Australian farm sector, is about 3 to 4 per cent of annual wealth production against what? 35 per cent in the European Union, about 25 per cent in the United States and I think over 50 per cent in Japan. So don't give me this argument about over-subsidising Australian farmers. By world standards, Australian farmers are brutally exposed to the cold gusts of the market place in a way that the farmers of other countries are not. And one more question and then we must go.
JOURNALIST:
Prime Minister, could the banks do more to follow the Government's lead?
PRIME MINISTER:
Well one of the things we'll be doing is talking to the banks. My understanding is that thus far they have been reasonable and I must acknowledge that during the time that I spent in western New South Wales last Friday week, I did not have complaints about the banks. I think they have tried, we will be reinforcing to the banks, our view, that they should continue to help. Australian banks are very profitable but I also want to give credit where credit is due. I believe over the past few years there has been something of a change in the attitude of Australian banks, I think they do share the view that maintaining a farm sector is very important to this country's future, thank you.
JOURNALIST:
Prime Minister has your government done enough for Schapelle Corby?
PRIME MINISTER:
Oh look this, to use an over-worked phrase, this is very difficult, the answer to that is yes. The best thing that we can all do for Schapelle Corby at the present time is to allow her and her legal advisers augmented, if that is her wish that she's defined, by others with particular skills in the criminal jurisdiction in Indonesia and elsewhere to allow her to get on with her appeal. To be talking about pardons and clemency at a time when the very basics of an appeal is the continuing assertion of innocence, is absurd and the best thing that we can do is to allow her to get on with that. We have provided all the assistance that we possibly could and I ask Australians to accept that if we really want to help her we won't be complicating her situation by counterproductive and premature calls for clemency and pardons in circumstances where that would be running counter to the very basis of an appeal.
[ends]