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Transcript 9364

TRANSCRIPT OF THE PRIME MINISTER, THE HON P.J KEATING MP AND THE MINISTER FOR PRIMARY INDUSTRIES AND ENERGY, SEN THE HON BOB COLLINS, PRESS CONFERENCE, PARLIAMENT HOUSE, CANBERRA, 21 SEPTEMBER 1994

Photo of Keating, Paul

Keating, Paul

Period of Service: 20/12/1991 to 11/03/1996

More information about Keating, Paul on The National Archive website.

Release Date: 21/09/1994

Release Type: Press Conference

Transcript ID: 9364

47
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PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING MP
AND THE MINISTER FOR PRIMARY INDUSTRIES AND ENERGY, SEN
THE HON BOB COLLINS, PRESS CONFERENCE, PARLIAMENT HOUSE,
CANBERRA, 21 SEPTEMBER 1994
E& OE PROOF COPY
PM: Some weeks ago I said that the seriousness of the drought, the
exceptional circumstances of the drought required a new systematic,
systemic response from the Government to deal with it. To put in
place a system of arrangements that would stay in place for the
intermittent attacks of exceptional drought which we have been seeing.
As you know, the Government put into place a drought policy in 1992
and that policy is, outside of the areas of exceptional circumstances,
working well. I also said, last week, when visiting Queensland that the
Government takes an approach which is an inclusive one; that we
won't see segments or sections of the community distressed as we
saw with the unemployed, in the long-term unemployed, and that we
would not leave them behind. And, I made these comments in relation
to distressed farm families that we wouldn't forget them, that we
wouldn't leave them behind.
Well, today the Government, in the Cabinet, in submissions introduced
by my colleague Senator Collins, has adopted a set of measures which
meets those two criteria. That is, a systemic approach to the problems
of exceptional drought circumstances and meeting the commitment not
to leave farm families in distressed circumstances behind.
As well as that, principally of course, the package is about meeting the
immediate needs of these people and also to help them set
themselves up for when the rain comes, when the drought finishes.
Let me just run through the major elements of it. There are five major
elements. One is income support. Another is looking after the
education of children, of farmers in drought affected areas. Providing
additional financial assistance for farms for carry-on finance and

increasing dramatically the limits for maximum levels of assistance.
Improving the ability of farmers to access RAS without first selling off
all off-farm assets and the development of incentives for the provision
of farm storage and water facilities. Now, let me go down these points.
There was income support in the first instance that many distressed
families on the land needed. They just simply needed money to put
bread on the table and to feed their families and to look after
necessities. We are introducing that with a new payment called the
Drought Relief Payment ( DRP) which will provide farm families with
funds to cover those necessities. Payments will be made to farm
families in exceptional drought declared areas. The payments will not
be subject to a farm assets test, so we are removing the farm assets
test in respect of that payment, but the income will be subject to the
JobSearch Allowance income and off farm assets test. And, we will be
also paying that payment for six months after the exceptional
circumstance conditions are terminated. That is the principle income
support measure.
The second item is, of course, education. You know that many farmers
have been very disturbed by the fact that they have had to take kids
from school, pull their children out of school and take them home
because they couldn't afford to maintain them. To deal with that very
human situation, a real problem for families, the Government is
removing existing Austudy farm assets test for all families in
exceptional drought areas. The current Austudy income test, which I
might say, is more generous than the JobSearch Allowance income
test, will apply.
So, what we were being asked Senator Collins and me in these
various meetings we have had with farm communities, what we had
been asked is that the farm -assets test be removed in respect of
Austudy. We are removing it for families in these excepntional drought
areas. Now, the third element and can I just say, I think, one of the real
problems in this is and I'll come to the third element about providing
financial assistance to farms there is a real stress, I think, upon
families in rural Australia, in the bush, in these exceptional drought
circumstances. And, the risk, I think, we run is that we would start to
see a real change in the nature of the, if you like, the family structure
of Australian farming particularly as young people look at what has
happened to their parents and decide to walk away from the land and
where we see if farmers think they can't make a go of it, in the end
their land is bought at a discount by industrial companies and we see a
lot of, if you like, large company farming and we loose that whole
social infrastructure which we have always known in this country. I
think, the drought does present that risk and these exceptional

circumstances present that risk. So, the income support and the
education is to deal with that immediate problem.
Now, on farm finance we are saying this: In a very large change in
respect of these exceptional circumstance areas that RAS the Rural
Adjustment Scheme and carry-on finance under RAS will be demand
driven. It will not be cash limited. Now, what happens now is
someone could actually qualify for RAS, but only get a part payment
and they could only get a part payment because there is only so much
money in the bin. So, what the Government has decided today is to
take away the cash limiting and let it be demand driven which will
mean that those who are eligible will get the full amount due to them,
which can be up to 100 per cent of the interest rate subsidies for viable
farms. You know the problem that many farmers have. They have now had
seven or eight crops put in and they have failed. Depending on the
size of the farms, crops can cost $ 60-70 ,000 a season and you don't
have to be a mathematician to work out that very quickly you can run
into debts of $ 300-400,000. It is the capacity to meet those debt
interest obligation that we are seeking to do here. So, we are
expanding the pool so that eligibility will be met, but we are doing
something as well as that we are dramatically lifting the limits for that
which a farmer can receive under RAS. From a maximum annual
amount of $ 50,00-$ 100,000 and from an accumulative amount over
five years from $ 100,000 to $ 300,000. So, $ 50,000-$ 100,000 in
respect of the maximum for annual assistance and the cumulative over
five years from $ 1,00,0004$ 300,000. That is an enormous extension to
the limits and it is in a system which will then be demand driven and
not cash limited. So, that is the third principle element for financial
assistance. We are also extending anoth er concession. Many people on the land
try to provide some retirement assets for themselves or a retirement
home. This happens where, if you like, parents get to the point where
they think their farming life is over and their children take the farm
over. They have to go somewhere, and, what prudent farmers do, they
buy themselves a house in a town or on the coast or somewhere else.
As things stand now, a farmer would need to sell that house or
liquidate bona fide retirement assets such as superannuation funds or
a pool of superannuation assets to qualify for RAS. In other words,
they have got to dispose of all those assets before they can get RAS.
Well, we think this tends to fly in the face of the need for this turnover
in the farm sector and for a retirement income for farmers who leave
the land at some point in their lives. So, we are excluding bona fide
retirement assets and off-farm assets from the RAS assets test. That
is the other element of the farm finance. And, of course, I have said
that in the recovery phase these payments are not simply there until
the termination of the drought declaration, we have now decided today
L

to leave them six months after that. So, in other words after it rains
and they are back to some sort of normality, we are leaving the
payments there for six months until they can start to get some income
in. Now, on top of that one of the things which, I think, farm leaders have
said to Senator Collins and they have certainly said to me that outside
of these things such as income support, education, farm finance
support, there is also the question of the future about fodder, about
improving fodder storage and water storage to make farms as drought
resistant or as drought proof as possible.
The Government decided today that we would develop a set of
incentives for the provision of farm storage and water facilities and
we're thinking of a generous investment allowance; we're also
prepared to look at a faster depreciation of certain assets. But, we
don't want to see a position as we saw with the earlier tax incentives
for tree pulling, that there is major despoilation of the landscape or
people trying to turn impossibly marginal land into useful land by an
indiscriminate policy of water storages. So, my colleague, Senator
Collins and the Treasurer and the Minister for the Environment will sit
down with farm leaders and work out what we think can be an effective
package of incentives for the future for the encouragement of storages
for fodder and also for water.
Now, there are other matters such as counselling and support services
which are mentioned in more detail in the press statement. But, I
would just like to conclude my remarks on these points then invite
Senator Collins'to make some to you as well; and it is this, this
package is necessary in the interests of fairness, cohesion, in the
interests of the whole Australian economy. Because, there is a
substantial risk here that with prolonged drought in exceptional
circumstances such as these that we will see large sections of our
farming and grazing lands either poorly attended or unattended. And,
what has been a tremendously powerful industry for this country and
a way of life which has been part of the ethos of the country at some
substantial risk. It is for these reasons that we think this package, as
exceptional as it is in terms of the changes which it introduces and the
new principles which it encapsulates, is necessary for all Australians
and is in the interests of all Australians.
So, I said earlier and let me repeat this, we are not going to leave
these people behind but we don't want to pick them up and then put
them down without a chance of them getting back on their feet and
being able to reestablish themselves on the land. And, this is what this
package is about. It will total about $ 169 million over two years but if
the drought continues and more areas are declared, of course, the
cost will rise because the scheme will be available, generally
available, it will not be cash limited. So, it could be up to $ 200 million

or it may exceed it. With those comments I will invite Senator Collins
to make some points.
SC: Thanks Paul. I think the first thing to say about this package which will
certainly be obvious to the rural writers in this room is that it is a very
significant package. Not just significant in terms of dollars although
it certainly is significant in terms of dollars it is significant,
particularly, in terms of the policy development that this represents.
Farmers are going to recognise this package because it has been
developed out of the extensive, on the ground consultations that we
have had, including, I might add, the Prime Minister's visit to
Queensland. The caveat, I might add farmers certainly haven't got
all they want in this package and never will is that all of this,
although it addresses the identified problems, as the Prime Minister
has said, which have been brought to us by farmers, is all consistent
with a rational, national drought policy, the one that was developed in
1992 and we will adhere to that. That is, that the Government's major
attention will continue to focus on assisting farmers to plan and
manage for drought whilst acknowledging the fact that in a drought
which, without question in parts of Queensland and NSW is now the
worst on record we are extending special assistance in terms of that
crisis. Again, I know that there will be people in this room that will recognise
that a great deal of work and, indeed, thought has gone into this
package in a very short time. And, I have to say that I am extremely
grateful for the full blooded support that this submission received in
Cabinet from thePrime Minister. It may not have got through in the
style that it did, otherwise. So, I would finish with those few remarks
but the one thing that I do want to say is this: anybody who looks at
this policy will see where it is directed. It is going to provide significant
assistance directly to the families concerned in a targeted way.
Drought policies in the past have delivered significant assistance, and
a lot of it has been wasted and abused. There is no question about
that. The three substantial differences between this approach and the
approach that is still being advocated by the Opposition on it, there are
three substantial differences between this and the Opposition's
approach. First of all this has been developed after extensive
consultation with Australian farmers and the Peak bodies that
represent them. Secondly, it is carefully targeted to address the real
need and thirdly, of course, it is actually costed with real dollars. And,
with those concluding remarks, perhaps, we could take questions.
J: Do you reject outright the fodder subsidies which have been put up by
some people?
SC: Yes. Because it is an extremely ineffective measure and as you know
they are not just my words. It was attacked the day it was produced,
by organisations such as the Grains Council, the National Farmers

Federation and, indeed, the Cattle Council of Australia presumably the
people who would represent the lobby that would, presumably, benefit
most. Because, they all know the huge flaws in it. Even the
Opposition when they advocated it, on the day they launched it,
conceded that it was open to abuse, but that they would wave a magic
wand and fix that. This is far more targeted. If I just give you an
indication of how better this The JSA ( Job Search Allowance) the
family assistance that we are providing, if you take a typical example
the Prime Minister and myself have seen plenty of them recently a
farm couple with two or three kids, farm couples in fact tend to have
more than two or three kids but let's take that as an average, this is
going to put, in terms of disposable income into that arrangement
around $ 25,000 a year, in disposable cash income with no strings
attached, like fodder subsidies, that wasn't there before. And, that
really is the benefit of this.
In addition, and have a look at the package, as the Prime Minister has
said, we have significantly enhanced the RAS component of this and
there are large dollars attached to that, as they have to be. The
benefit of that is that there may well be farmers in extreme drought
situations, who take farming decisions that mean that something else
has got a greater priority than fodder. This kind of assistance is going
to give them the flexibility to do that instead of us determining that
fodder is what they need. And, of course, as you well know, at the end
of the day the last time this was used in 1982 the chief beneficiaries
were the suppliers of the fodder and the transport companies and not
the people on the ground. Because, go back and have a look at that
scheme because people have actually forgotten what it actually was...
It not only was'capped but it was capped to a particular price per
tonne. As the price increased the value of that subsidy continually
decreased over the life of the subsidy. So, in fact it is a totally
unacceptable approach, this one is much better.
J: How many farmers will benefit from RAS
SC: Well, to take a broad figure there are around 12,000 families currently,
farmers, out of about 125,000 that are in extreme difficulty. And, they
are the people that this package is designed to help. We would expect
that there would be two to three thousand farmers who would be
directly assisted with substantial additional assistance, through RAS,
in a way they haven't been before. But, it goes beyond that, the
Austudy changes will be particularly welcome in the bush, I think
people will be very pleased about that. And, that Austudy assistance
and, of course, the family disposable income that is going to go into
those households addresses that as well. But, two to three thousand
families at least but I expect that it will be considerably broader than
that in terms of the total benefits of this package.

7
The one thing that I do want to stress at this point is that this does
have to be strictly administered, this does apply to farmers who are in
crisis. This is not a scheme that applies to the farming community
across Australia. It is a special range of assistance measures that will
help farmers who are in extreme trouble. That is, farmers who are in
drought now and who have been droughted for a number of years.
That is, essentially, farmers in Queensland and at this point in time,
farmers in Northern NSW.
J: Do the states support it because ( inaudible)
SC: I am glad you have asked that question because I did want to say, the
states have got a very significant responsibility in this which they have
to discharge. And, I don't think that any state minister for agriculture
or, indeed, Premier, could look at a package as well targeted and
substantial as this and, with a straight face, say that the
Commonwealth was not doing its bit. Now, this is particularly
important because there is a meeting of all of the primary industry
ministers on Friday, being convened here in Canberra. And, this will
go right on the table. They have got a role to play, as you say, in this
and one of the things that I think has been happening in the past is this
and this is something that has been identified just in terms of the
examination we have made of this. The way the scheme works, as you
know, is that up to a fifty per cent subsidy the Commonwealth provides
the lion's share of that support. Ninety per cent as against ten per
cent. Over fifty per cent we match that dollar for dollar with the states
and we have put a very large additional sum of money in here to do
that. But, the states have to match that dollar for dollar. I think what
has been happehing in some states more than others, is that there has
been a deliberate move made to concentrate the assistance on our
dollars and not the states' dollars. Now I have to say that some states
have dramatically not been doing that, and I would mention
Queensland, which has got an extremely well-administered RAS
scheme. That's generally conceded across Australia. Now,
Queensland in fact matched us dollar for dollar to take subsidies up to
100 per cent when New South Wales in fact at the time refused to do
so. And I hope that's not the case this time. So I would be, there are
farmers who need the 100 per cent subsidy. Now as you know, that's
been identified as a problem with RAS in a crisis. As the Prime
Minister said, RAS works very well in a pre-crisis time. It's got some
acknowledged deficiencies and the biggest one we have now
addressed. That is, to allow farmers to get a 100 per cent subsidy
when they need it, that is, an interest-free loan. Now the States will
have to play their part in delivering that. I hope they do.
J: farm management
BC: Well, that's all part of a long-term examination of the scheme. But can
I say to you, I think this is a far more effective way of dealing with it

than the taxation system. And the Prime Minister in fact has
mentioned a far better approach than taxation measures and that is an
investment allowance which is properly constructed, carefully put
together in consultation with the farming community, that will provide
an incentive. And the reasons are obvious. Tax breaks only work if
you are paying tax. If you are a crisis farmer that hasn't had an income
for four years, a tax break for you is useless and that's one thing that's
been identified with us. What people do want to do when times get
better is to have a positive incentive provided to put in water storage
and to put in fodder storage and that's what we have given a
commitment to look at.
J: money is also useful in bad times?
BC: I'm not suggesting that it isn't and can I say that despite all the rhetoric
to the contrary, the lIED scheme is significantly used. I mean there
currently is in excess of 130 million. I think the last time I looked $ 135
million comprising of about 6,500 deposits in that scheme right around
Australia. So as distinct from the rhetoric about it's got to be better, if
it's not much good, I can tell you there's a lot of farmers currently using
it.
J: Prime Minister, your statement mentions that you are going to be
talking to the banks and the pastoral houses. What are you going to
be asking them to do?
PM: Well, they are the recipients of the interest rate subsidies, are they not.
I mean they've got properties, and even if they take the view that they
won't turn people off them, if they took the view they would turn people
off them, what good would it do them, in many cases. So getting the
interest subsidy is a clear benefit to the banking sector from the
Commonwealth via the farm sector and we'll be having a conversation
with the banks about what their policy and attitude is to Supporting
farmers through this period and what longer run view they are going to
take in the event that the drought persists, and in the face of the
accumulations of debt they already have.
J: asking for moratoriums on the debt or interest ? 7
PM: We are going to have a conversation, that's what we'll do in the first
instance. That is to see they have a problem on their hands, the
farmers have a problem on their hands, we are part of the solution and
I think we are prepared to talk to them and see what general policy
they wish to follow and whether they want to be part of the solution as
well.
BC: Could I just mention two things that are particularly irrelevant to banks
but farmers are going to greatly welcome about this package. One of
the key issues that banks are interested in, because this is a subsidy

on interest rates, is what degree of assistance the Government is
going to provide. Now in the past, there has never been any
mandated time period for the extension of these benefits beyond the
breaking of a drought. An extremely important policy development that
has been delivered here is, as the Prime Minister has said, a
mandated period of six months of continued assistance for exceptional
circumstances and on top of that, twelve months of access to the
normal Rural Adjustment Scheme. So eighteen months of continued
support after the drought stops. Now that is going to weigh very
heavily, I think, in any bank's consideration of what they might do with
an outstanding farm loan.
J: There's been some talk about a regional unemployment scheme,
getting people in regional Australia to work on farms, on landcare
activities. You didn't mention that in the package is that not on?
PM: Well, we just committed 1.8 billion in a full year to labour market
programs in the White Paper and I think it is a matter of whether we
can use some of that funding to extend and perhaps better provide in
areas such as LEAP or REAP[?], particularly as they are working in
some of these exceptionally drought affected areas. So in a
commitment that large to the labour market, and labour market
programs that are already up and running, we think the thing to do is
basically try and work some of that funding into it for existing
arrangements. That is schemes that already exist. Labour market
programs already on the ground.
J: Where's the money coming from for this? Will there need to be offsets
or is it simply' out of
PM: No, this is a commitment by the Government to a group of people in
the community just as we would make a commitment to any other
group as we did the long-term unemployed earlier in the year.
BC: There were no offsets from the Department of Primary Industries and
Energy, I can tell you.
J: your support for this submission got it through to the'Cabinet in a
way that might not otherwise have happened. How profound was the
effect on you of your visit to those farmers last week in terms of the
position you took today in Cabinet?
PM: Well it obviously had an influence on my thinking about this, but
perhaps one of the factors is that there were not the Winter rains for
the crop that would be now, that farmers would be putting in now. And
even were that to have been the case, farmers would have to find
another $ 60,000 or $ 70,000, maybe that much, to put in another crop
on top of the six or seven or eight that already failed. So there's a
point where even for say someone who's got a farm with assets of a.

million or a million and a quarter dollars, once they start clocking up-.
three or four hundred thousand dollars of debts and then adding
another sixty and seventy per crop, again you can see what the
looming problem is there. And also the fact that so many of them haver
virtually no savings, no income and no income support. Now that wast
very apparent to me last week and that's why this is such a very large)
change. Never before have we extended income support outside of,
that JSA income and assets test. We're suspending the assets test$.
the farm assets test here, which is a very big public policy decisions
But it's part of a set of arrangements. And that's what I was sayingp
some weeks ago, to deal with a drought like this where it is in these
exceptional circumstances or where it moves in and out of regions six.
months at a time, where a region is drought declared and then nondrought
declared and then drought declared, you need a systemic
approach. This basically I think does that. This is essentially directed,
well it is directed to the exceptional circumstance areas. For those
areas which are not exceptionally affected but which are droughted.
We've got the 1992 package. I mean I think this is the point about the
comprehension of it, vis a vis what Bob Collins said about the National
Party's approach which is basically to throw a fodder subsidy in. Well
a fodder subsidy is not going to help a farm family who have got no
income. It's not going to help them deal with their existing debts. It's
not going to help them with the education of their children.
BC: That's right.
J: Prime Minister, a fodder subsidy would help a cattle producer keep
together a breeding herd and the breeding herd is being run down
rather drastically'-
BC: That's correct, it would. And it would also cost us a minimum, a
minimum, of $ 100 million to implement it, if you were lucky. And I have
to say if I was a farmer, and I was a farmer, and I was given a choice of
a 50 per cent fodder subsidy capped on the price, which it was, on a
maximum price for the tonne of grain, which was then inflated of
course naturally after the market was distorted with the interest
subsidy and this, I would take this every time. This provides
significantly more assistance than the fodder subsidy would and in a
way which is far more flexible for the farmer.
PM: And the other thing
J: What do you think the national cattle herd will be at by about, or for
next year?
BC: Well what I'd suggest you do, and the information is available without
getting bogged down with that, is go back and have a look at the very
extensive analysis that was down on this in the last major drought and
in fact I will be happy to provide you with that information.

J: In the last major drought the cattle herd was kept going by fodder
subsidies.
BC: In the last major drought, the cattle and indeed the sheep flocks did
not, at the end of the day, benefit particularly in terms of the national
maintenance of that herd from a fodder subsidy. What I'd point out to
you is that this comprehensively addresses additional income. As the
Prime Minister has just said, in order to get a fodder subsidy, you have
got to buy the fodder in the first place. What we have done, is provide
enhanced packages of assistance for farmers to get an interest-free
loan with significantly enhanced RAS assets. We've lifted the caps on
RAS that have limited it in the past. And in the case of worst hit
families, put $ 25,000 in disposable cash into that arrangement, which
of course, they'll be able to spend what they like on as any other JSA
recipient can, that was not there before. That's a far more significant
package of assistance in maintaining the national herd than a fodder
subsidy.
PM: And one of the reasons why the National Farmers Federation and the
Grain Growers and others bucketed the National Party proposal a
week or two ago, is because the last time these things they were
rorted. rorted to hell. I mean, in the end there was a you know, the
major beneficiaries of the fodder subsidy were people who basically,
were marketing fodder. I mean, you're better off to say to the farmer
you use your money as you yourself see fit, and we will give you
interest subsidies to help you through, rather than going the other
route of saying well look, we won't really help you, but only to the
extent that you ' buy fodder will we help you, and therefore we will
mostly help the people that own the fodder.
BC: I'll tell you what I said to som e National Party Senators look, before
you have a go.. before you sell me on a fodder subsidyv and 1 am open
to ideas, and I was before you sell it to me, why don't you try and sell
it to the National Farmers Federation, the Grains Council of Australia
and the Cattle Council, then come and see me.
J: Prime Minister, currently you are matching dollar for dollar the funds
raised in the Farml-and Appeal they have currently raised $ 5 million,
so that means you owe them $ 5 million ( the Appeal $ 5 million) that's
largely been distributed for household income support, will you
continue to match that dollar for dollar given the generosity of this
commitment?
PM: Yes, we have said we will and again, there will be people affected by
drought who may not be " exceptionally affected" where the FarmHand
Appeal can actually help. In other words, it's going to be a parcel of
money that can be quite useful in some of the spots that mightn't fit,
some of the criteria here.

J: Mr Keating, you mentioned the figure of $ 150 million to be the cost of
this is it not the case that it will help budget bottom line that NSW
Government rejected your offer of $ 150 million for the Cahill
Expressway?
PM: Well, it's got nothing to do with it Geoff. I mean, the Cahill Expressway
was a nett $ 70 million over 5 years it's about less than $ 20 million a
year for what is an essential public work for NSW, and which the
NSW...
J: ( inaudible)...
PM: I know, but look these puny fiscal points that financial journalists insist
upon raising, let me just put it down immediately in this respect. We
are talking here today in respect of over $ 100 million thereabouts
$ 160 million over 2 years...
BC: Nearly $ 170 million.
PM: Nearly $ 170 million nearly $ 90 million ( this year). All the barrackers
for lower deficits are the, you know, the failed newsletter writers and all
the others that are out there still peddling their morbid tales are
suggesting that maybe we should let that $ 70 million go to the market,
and that the market would use it better. It will go in plant and
equipment. Well, how much of it will go in plant and equipment, and
how much will add to the capital stock, and how much will add to
national growth and employment, current account etc, or how much of
it goes chasing rseal estate, property prices and what have you? So, if
you have got to make a judgement about whether the $ 100 million
dollars here is better used, or the $ 100 million at the Quay is better
used thrown to the market the judgement is as clear as day. They're
better being employed in these schemes. In this case, in and of
course, this sort of point which emerges in journalism occasionally that
governments and nations can't do more than one thing at once. Well, I
mean, today we did about 5 things at once.
J: Prime Minister, would you suggest from Senator Collins' comments
about your help and assistance to get the package through a few of
your cabinet ministers shared the same views of these failed
newsletter writers..
PM: No.
BC: That's not, in fact, the case at all. It's just a fairly tough forum, Cabinet,
and it is no matter what the submission is.
PM: Well I mean, look, let me just tell you I've been around the fiscal
game here nearly longer than anyone in the room and let me tell you

this the people writing this stuff have been arguing for the lowest
deficits and the biggest surpluses for as long as I have known them,
they have been arguing for the lowest wages, some with famous
expressions like " the real wage overhang" while they themselves are
taking massive wage overhangs, we all know them, and we are all sick
to death of them.
J: To overcome the reaction...
BC: Well, if you're not going to talk about drought or farmers anymore, I
might leave, actually.
PM: Now look, we're not going around the sport about fiscal policy. I mean,
have you got any other questions about this thing?
J: Senator Collins, just looking at things is there any possibility there will
be other areas other than Queensland and NSW that could move into,
or become eligible, for this package?
BC: Well, I think you would have to say only if the worst case scenario that
the Met Bureau is forecasting comes to pass, and I hope that doesn't
happen. On the forecasting that has been done so far, and let me tell
you it's been extremely accurate to this point in time the weather
bureau is predicting that there may not be significant easing of the
situation across Australia until March next year. Now, if that is the
case, and if there are drought-breaking useful rains at that time, this
package will be sufficient. But should the worst happen, and the
drought extend beyond that, the Prime minister has already indicated
this assistance W~ ill follow. I might say that at that point in time, if the
drought does extend for another full year beyond what we have
already had, it will be a significant crisis at that point in time in any
case.
J: Can you point out areas where the... . that could be affected by that?
BC: Oh, all that information is in fact freely available. In fact, I must say,
it's been on the front pages of a great many newspapers for about 3
weeks now. The Northern area of NSW and extensive areas of
Queensland are really the worst hit. At this point in time, that's who
this addresses, and there's no question that in respect of those areas
they have now, at this point in time, experienced the worst drought on
record. And I might add this is a literally, a week by week situation. If I
can just give you an example of what I'm talking about we expected to
harvest about 12.5 million tonnes of wheat nationally, down from the
18 million tonnes last year. That would have been changed ad rain
fallen a fortnight after that prediction was made. If we don't get rain in
the next 2 weeks.. the next 2 weeks then the current 10 million tonnes
will have to be down-graded again because of the crops that are in the

14
ground now. So, it's a weekly situation, literally, so you can't make
those kinds of predictions.
PM: Can I just finish with this comment I'd like to, on behalf of Senator
Collins and certainly myself, express my appreciation for the interest
which the peak farm bodies have had in this, and for the consultation
they have given us, for those people on the land who have generously
given us of their time and their views. This is quite an important,
indeed for social policy, revolutionary change in policy, and it extends
principles that in the past outside of these circumstances, the
Government has resisted. We've done it on this occasion thoughtfully,
and in a way in which we think protects all the lines of policy, yet gives
material and substantial relief when it matters, and where it matters.
Thank you.
ends.

Transcript 9364