PRIME MINISTER
STATEMENT BY THE PRIME MINISTER, THE HON P. J. KEATING, MP A t/
DROUGHT ASSISTANCE
With my colleagues, the Minister for Primary Industry, Bob Collins, and the
Minister for Social Security, Peter Baldwin, I am pleased to announce the
Federal Government's measures to help rural communities through the crippling
drought in Queensland and New South Wales. The measures are designed to
provide rapid relief to families and communities experiencing " exceptional
circumstances" in the worst drought areas.
Following a submission from Senator Collins and Mr Baldwin, Federal Cabinet
endorsed the measures this morning. They will be implemented immediately.
In some areas this is the worst drought on record. Farmers and their families,
farm businesses and rural communities are suffering extreme hardship. Without
immediate assistance, the hard work and personal investment of many
thousands of Australians , might well be wasted.
We cannot leave these people behind. The measures we announce today are
designed to ensure that they will not be. They create a safety net to provide for
their immediate needs and create the circumstances in which they will be well
placed to recover when rain eventually comes.
If only for the sake of fairness, we must take these measures. But it is also in
the interests of the national economy to take them. It is in the interests of the
long term sustainability of our rural industries. It is in the interests of the
environment. It is in the interests of all Australians to take them.
Today, in responding to the human and social consequences of the drought, we
are also conscious as are the farmers' organisations and the farmers
themselves that we must address the long term needs of the drought affected
areas. For this reason we have taken care to ensure that the measures are
consistent with the objectives of the National Drought Policy and the Rural
Adjustment Scheme.
L 2
The package has been costed at $ 164 million over 2 years. This amount will be
exceeded if additional " exceptional circumstances" declarations are made, or if
the drought persists well into next year.
In addition, we will provide a generous tax incentive for farm storage and water
facilities to encourage farmers to better prepare for drought.
The key elements of the package are:
a Drought Relief Scheme to address the immediate cash flow needs of
the worst affected families;
further measures under the Rural Adjustment Scheme to assist farm
businesses;
further resources for financial and social counselling.
Other longer term measures will be dealt with in a later submission to Cabinet
consistent with the Government's systemic approach to drought policy and may
include further initiatives in the areas of taxation, income equalisation deposits,
landcare, and climate research.
In coming weeks, I will also meet with the major banks and pastoral houses to
discuss the important role they have in helping rural businesses and
communities now and in the period of recovery.
The Government will continue its consultations with the States at a special
meeting the Commonwealth has convened later this week of the Agriculture and
Resource Management Council of Australia and New Zealand.
CANBERRA
21 September 1994
SUMMARY OF MEASURES
Drourtht Relief Payment
The Drought Relief Payment ( DRP) will provide farm families with sufficient cash for
basic necessities and services. Payments under DRP will be available to farm families
in areas assessed to be in exceptional drought and will be subject to the income and
off-farm assets tests that apply to the Job Search Allowance ( JSA). Farm assets will
not be subject to assessment for DRP eligibility. Payments under the DRP will be
available from mid-October retrospective to the start of the month and will continue
until six months after Exceptional Circumstances conditions are terminated. Farm
families eligible for DRP will also be eligible for Family Payments and Healthcare card
benefits. The accompanying table provides a summary of entitlements.
Austudy The existing Austudy farm assets test will be removed for all families in exceptional
drought areas. The current Austudy income test, which is more generous than that for
JSA, and off-farm assets test will apply.
Farm Business Support
An additional $ 74.25 million for the Rural Adjustment Scheme ( RAS) over 1994-95
and 1995-96 will be available to assist farm businesses during drought exceptional
circumstances and the recovery period. Normal RAS support has been supplemented
by $ 8.25 million, while support under exceptional circumstances has been increased by
$ 66.0 million over the next two years.
In a significant improvement to RAS, we will ensure sufficient resources for all farm
enterprises eligible for exceptional circumstance RAS to be fully funded. In the past,
limited resources have meant many farmers have not been able to access their full
interest subsidy requirements. The changes mean that for exceptional circumstances,
RAS will be demand driven.
The package also includes measures to help farms recover from drought. There will be
a six month period after the termination of the exceptional circumstances declaration in
which applications can be made. In addition, through a supplementation to normal
RAS, eligible farms will be able to apply for some further assistance for an additional
twelve months.
Farmers have not been able to access the exceptional circumstance provisions of RAS
without first selling all off-farm assets. This has created difficulties where farmers have
taken steps to provide for their retirement. In recognition of this, investment in bona
fide insurance and superannuation funds have been excluded from the assets test for
the exceptional circumstances support while an assets test of $ 163,500 will apply for
other off-farm assets.
Finally, the maximum individual annual assistance limit on RAS interest payments has
been lifted from $ 50,000 to $ 100,000, while the cumulative limit over five years on
assistance has been lifted from $ 100,000 to $ 300,000.
These improvements to RAS will require matching funding by the States.
Counselling and Support Services
Further resources are being provided for rural financial and social counselling in areas
affected by exceptional drought to assist farmers and their families manage the financial
distress and social trauma dimensions of the drought. Provision has been made to
increase the total number of Commonwealth funded rural financial and business
counsellors to 140, and give farmers and their families access to additional personal
counselling. The Rural Counselling Service is also to get access to further
administrative assistance to accommodate the higher workload. The State
Governments will be asked to help ensure that adequate social counselling is provided
in drought affected areas.
Drou2ht Preparedness
The Government will also provide incentives for farms and rural communities to better
protect the agricultural resource base during drought and encourage improved land
management. The Government will consider providing a generous investment
allowance for farm storage and water facilities. In addition, we will consider faster
depreciation on storage facilities. In developing these measures, we will take into
account the need to ensure that any such investments take full account of their
environmental impact. The Treasurer, the Minister for Primary Industries and Energy
and the Minister for the Environment, Sport and Territories will work with peak farm
groups over the next few months to develop such a scheme.
The Government will also examine the possibility of providing further funding through
its labour market programs to address land degradation and environmental protection
in drought prone areas.
DROUGHT RELIEF PACKAGE
PROGRAM FUNDING DETAELSM1
1994-95
Farm Family Welfare
Drought Relief Payments
Austudy exemption
Family payments
Health Care Card
RAS authority administration
Total 43.45 3.69
4.36 0.25 0.24 1995-96
19.31 2.77 1.93
0.11 0.10
51.99 24.22
Farm Business Support( 2
Normal RAS
Drought Exceptional Circumstances
Total
Drought Counselling
Matching " Farmhand"( 3
TOTAL 3.00
25.00 5.25
41.00
28.00 46.25
1.4572.40
10.00
91.447 72.87
Excludes the Governent's further consideration of investment and depreciation allowances
relating to fodder and water storage
Excludes matching contributions from the States for the Rural Adjustment Scheme.
Anticipated Government contribution
MAXIMUM DROUGHT RELIEF PAYMENTS per week)
Single
Couple Couple Couple Couple Couple Couple
Couple Couple Couple Couple person 1 child under 13
1 child aged 13-15
1 AUSTUDY 16-17 yo at home
1 AUSTUDY 16-17 yo
1 AUSTUDY over 18 at home
1 AUSTUDY over 18 away
2 children under 13
1 child under 13 1 child 13-15
2 children 13-15 $ 148-65
$ 268-20
$ 310-95
$ 324-15
$ 334-35
$ 377-40
$ 347-75
$ 388-95
$ 353-70
$ 366-90
$ 380-10
MADE UP OF
Couple Rate $ 268-20
Basic Family Payment,-$ 10-65 per child for first three children;
$ 14-20 for each subsequent child
Additional Family Payment $ 32-10 per child aged under 13
$ 45-30 per child aged 13-15
TJDY (-JSA) $ 66-15 tor each 16-17 year oi" -alt hoe--
$ 109-20 for each 16-17 year old away from home
$ 79-55 for each 18+ at home
$ 120-75 for each 18+ away from home.