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Transcripts from the Prime Ministers of Australia

Transcript 12773

CREAN'S DROUGHT CLAIMS ARE FALSE

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 10/10/2002

Release Type: Media Release

Transcript ID: 12773

The claim made by the Opposition Leader today that the Commonwealth is not helping Australia's drought affected farmers is baseless. Equally untrue is his claim that the Commonwealth is not cooperating with the States.
The Commonwealth has provided significant support in both helping farmers to prepare for the bad times and also to endure the bad times when they arrive.
In the first instance, the Commonwealth established Farm Management Deposits (FMD) to help farmers prepare for the bad times by putting money away in the good times. FMDs provide a tax benefit to farmers who save money in good years to help them through difficult times.
- The payment of tax on money invested in an FMD is deferred from the income period when it is earned to the income period when it is withdrawn and this can lower the tax payable by farmers
- Deposits in FMDs increased substantially in 2000-01 and 2001-02. As of June 2002, there were 43,400 farmers holding FMDs to the value of over $2 billion.
- Treasury estimates that the cost to revenue of the FMD scheme was $150m in 2001-02 and will be $510m in 2002-03.
Now that the drought is ravaging many parts of Australia, the Commonwealth is actively helping farmers and their communities with direct financial support through Exceptional Circumstances arrangements.
- The Government has already allocated $75m for areas declared to be facing exceptional circumstances. The final amount is uncapped and will increase as other areas are declared exceptional. If this drought follows the pattern of earlier droughts, the cost could rise to over $200m.
While the Commonwealth is negotiating changes to Exceptional Circumstances with the States, this has not stopped support going to those in need. We have in fact modified existing arrangements to ensure financial support gets to farmers more quickly.
If the Leader of the Opposition knew anything about how the process for Exceptional Circumstances operates he would realise that his allegation of non-cooperation between the Commonwealth and the States was false. Exceptional Circumstances are only granted when any application is lodged by a State government therefore cooperation between the two levels of government is basic to the system.

Transcript 12773