Speech - House of Representatives - Farm Household Support Amendment Bill 2018 - Wednesday, 27 June 2018

I begin my contribution this afternoon by acknowledging the severity of the drought our country currently faces, which is experienced by not only our farmers and their families but also the rural communities that rely so heavily on the health of the farming sector.

When our farming income is down then the local economy is also down. If ever there were an issue in the parliament on which we should be taking a bipartisan approach, this is it. I'm not suggesting that this speech will be particularly bipartisan, because we seem to be somewhat beyond that, but with the departure of the member for New England I believe there is still an opportunity for us to regroup and approach drought on a bipartisan basis.

The DEPUTY SPEAKER (Mr Irons): That's very good to hear, Member for Hunter.

Mr FITZGIBBON: It is all right to extend sympathy to our farming families, which I do tonight on behalf of the opposition, but they need much more than sympathy; they need a parliament and a government working for them, making the real and meaningful responses to drought that can take us well and truly into the future in a way that offers them confidence. Whatever those policies look like, they need to be underpinned by the basic acceptance that drought in our country should no longer be treated as abnormal event, something which will come along occasionally and which, hopefully, won't last too long, and that, rather, our climate is changing—and neither this evening nor the course of this policy debate is the time to argue about what is causing the change; that is for another day—in a way which is making it far more difficult for our farming communities. We need to recognise that is unlikely to change; it's the new normal. We need to accept that protracted drought will be with us again and again, part of our climate on a permanent basis, and approach the policy with those fundamentals in mind.

 I am still not sure why the Prime Minister recently had a drought tour. I would've thought that, after five years in government and at least seven years of drought, he might've understood the drought and what we as a parliament should be doing about it. More surprisingly, he didn't come back from the drought tour with a policy announcement. I accept that prime ministers look for a photo opportunity when parts of our community are facing natural disasters, but they usually do that ahead of a policy announcement, and on the Prime Minister's return, disappointingly, he offered no such thing.

The fact that we are debating this Farm Household Support Amendment Bill 2018 this evening poses four key questions for me. First of all, what has happened in drought policy over the last 10 years? I think that's worth sharing with the House. Second, why are we debating this bill before the House now in June 2018? Third, what does the future hold for drought policy in this country? That's something I've already touched on. Fourth, what are the government's policy priorities, and how do the agriculture, forestry and fisheries sectors rate in the government's considerations?

Ten years ago now, back in 2008, Commonwealth and state governments started to reflect upon the history of drought policy in this country and its failings. In 2013 something quite historic took place: the Commonwealth and each of the states and territories agreed to a whole new approach to drought policy and entered into an intergovernmental agreement which will have lasted five years, coming to an end 1 July this year, only days away. A number of principles were embraced within that agreement. I should say that agreement had the support of key farm leadership groups like the National Farmers' Federation, and within this parliament it had bipartisan support. It was agreed, with the helping hand and guidance of a Productivity Commission report, that the way we were doing drought policy in this place was failing our farmers, our economy, our communities and indeed, of course, the budget. We were spending a billion dollars a year on a number of initiatives which usually fall under the umbrella of exceptional circumstances. They were costing us a billion dollars a year. A considerable proportion of farming families, as the Productivity Commission indicated, have been on the welfare payment for many, many years—too many years. Of course, the Productivity Commission identified the fact that many of our farm businesses hadn't made a profit for many years, and it was clear that the drought policies that were in place were not working and were failing our farmers, our communities and our economies.

So the states and the Commonwealth said, 'Let's try a new approach,' and the agreement was underpinned by a number of principles. I want to share them with the House. There are five of them. The first was to assist farm families and primary producers to adapt to and prepare for the impacts of increased climate variability. The second was to encourage farm families and primary producers to adopt self-reliant approaches to manage business risks. The third was to ensure families in hardship have access to a support payment that recognises the special circumstances of a farmer, and that's the principle which is leading us to this debate tonight. The fifth was to provide a framework for jurisdictions' responses during periods of drought. I missed the fourth; I'm sorry, Mr Deputy Speaker. It was to ensure that social support services are accessible to farm families. So they are the principles that underpin the intergovernmental agreement which comes to an end on 1 July this year.

Of course, the governments—plural, because it commenced under the former Labor government—moved pretty quickly to establish farm household allowance as one of those key principles. Farm household allowance, for those who don't know this area well, is basically an unemployment benefit for farmers. It comes with a more generous or liberal assets test, because obviously farmers can be very cash poor in times of hardship—not necessarily just drought—but still be quite asset rich and unable, of course, to readily pass off those assets. So we need a welfare payment. I think the welfare payment is an important part of the equation, and farm household allowance represents that welfare payment.

Importantly, the COAG discussion included an embrace of the idea that the welfare payment should not be ongoing ad infinitum. The concept is really that farmers should get income support for a period of time—three years was chosen—and in that time they should be expected, with some government support and guidance, to make themselves more resilient and more adaptable, to embrace new business models, maybe to get other off farm income or maybe to leave the land, if that's absolutely necessary and they conclude that that's the only option available to them.

What brings us to the debate tonight is the fact that a couple of thousand farming families have now reached the end of their three-year entitlement to farm household allowance, and the government is now seeking to extend it by one year for those who are already on it or have just left farm household allowance because their time has expired—and, indeed, for those who are coming onto it. I need to make clear to the House that, for new entrants on the farm household allowance, the period will now be four years, not three—thus the considerable impact on the budget bottom line. It's not just existing farmers; there will be future farmers as well.

The problem with all of that is that the work simply hasn't been done along the way. We've lost five years, basically. The first act of the member for New England when he became the minister was actually to abolish the COAG process. The whole concept of the IGA relied upon the idea of greater collaboration between the Commonwealth and the states. It's true that, as the mainland managers, under our Constitution the states have to be part of the equation; they have to be part of the solution. There was an entity called the Standing Council on Primary Industries, which dealt with these matters under the umbrella of COAG. SCoPI, the Standing Council on Primary Industries, was not only the ministers meeting but also the committee on which the secretaries were represented. It was the role of that COAG committee to continue to progress the next stages of that drought reform plan.

That was then pulled away. Under pressure, it was eventually replaced with a thing called AGMIN—that is, the ag ministers group—which didn't have anything like the construction, secretarial support or resourcing that the Standing Council on Primary Industries had. I'll never understand why SCoPI was abolished, but it was a great mistake by this government. It was a decision authorised by no less than the Prime Minister of the day. It is something the current Prime Minister hasn't sought to turn around; he should turn it around. If we're going to have any hope of producing real and meaningful drought policy in this place, we need a COAG process and we need it very quickly. We've seen other areas of government policy where we've been let down by the diminution of the COAG process.

What we have had over the last five years is an increasing reliance on concessional loans. It was a former Labor government that first went down the path of concessional loans for our farmers. At that time, it was not because of drought but because of high indebtedness. That was the major issue of the day. I still believe that, in the higher interest rate environment at that time, there was a role for concessional loans, but this government has fallen into the trap of offering concessional loans for just about any hill any business ever faces: Northern Australia infrastructure loans, concessional loans to farmers—and the list goes on and on. But, as a drought response, the reality is that more debt or switching debt is simply not a solution or an option for many farmers. It entails challenging your relationship with the bank. We've learnt time and time again in this place that it means going through a terrible number of hoops in terms of paperwork during the application process. It is very, very difficult.

We've had this over-reliance on concessional loans, and of course the concessional loans have allowed the government to spruik the capital value of the land. We read in the Agricultural competitiveness white paper the government's $4 billion investment. It is a failed document; I think there's a general consensus in the sector on that now. It's $4 billion because that would be the total capital value of all the loans if they were all lent out. Of course, that's not the cost to the budget bottom line. The cost of the budget bottom line is the cost of administering the loans and any bad debts. We need to look at the difference between the government's bond-borrowing rate and the interest rate of the loans. The cost to government is not great. The government has become very fond of these loans because it doesn't cost the budget bottom line and it allows them to spruik that larger amounts of money are going to our farmers. It's a sleight of hand, it's not an approach which is conducive to bipartisanship in this place and it's certainly not a way of helping our farmers.

By way of completeness, I acknowledge that the government has improved the farm management deposit scheme in recent years. That's a good thing. It's a very wise policy to allow people to put money away in good times for use in bad times and to use the taxation system to make that attractive. We should continue to make that a key centrepiece of drought policy. The government has also done a little bit of work around capital depreciation—that is, accelerated depreciation for certain infrastructure projects on-farm, whether it be water or otherwise. The problem is that accelerated depreciation is no good to someone who's not making a profit. You have to spend the money in the first place but if you're suffering a very bad drought then you're not likely to have the money to invest.

That takes me to the Regional Investment Corporation. The government is so fond of these loans that it's now going to establish the so-called Regional Investment Corporation in Orange. Why Orange? I think you know the answer to that: because that's where the Nationals lost a state seat for the first time in 69 years, and the best way to grab it back from the Shooters, Fishers and Farmers Party might be to run a little boondoggle or pork-barrelling exercise out to Orange. The problem with the Regional Investment Corporation

— Mr Broad interjecting—

Mr FITZGIBBON: I acknowledge that the member for Mallee would have liked to have had the Regional Investment Corporation, but I will put his mind at rest by saying, 'Don't worry; I don't think the Regional Investment Corporation will ever eventuate.' I don't think we're going to have a regional investment corporation. I've already mentioned 1 July, which is supposed to be day that the Regional Investment Corporation opens its doors and starts making farmers right around the country happy and gives a huge boost to our national economy. Everywhere Mr Littleproud goes, no matter what the problem in the agricultural sector, he says, 'Don't worry; you're going to have the Regional Investment Corporation.' Well, that isn't happening. There won't be any doors opening in Orange on 1 July—at the end of this week or whenever that is—because the Regional Investment Corporation has no real objective, no CEO and no staff. It doesn't even have a location, let alone a building. In fact, the board turned up in Orange I think for the first time last week. There is a board. The minister has appointed a board, and they met in a park. We had the APVMA team, small as it is, meeting at Macca's in Armidale, in the electorate of New England.

Mr Broad interjecting—

Mr FITZGIBBON: I'll pick up the member for Mallee's interjections—no reflection on Macca's; it's a good choice. Their coffee's not too bad. But we have the APVMA CEO holding her business in Macca's in Armidale and now we have the RIC board meeting on a park bench in Orange. This is a disgrace. It should stop and it should stop now. The new minister should walk away from the antics of the former minister and just say: 'This is enough. This is not working. This is $28 million of money which could go to drought-affected farmers tomorrow.' That would be a better use of the money.

What is the RIC going to do if ever it opens, unlikely as that is? It's going to do the same thing the states are already doing through their rural adjustment authorities: it's going to administer concessional loans to farmers, but only new loans. We'll have a situation where the states will continue to administer old loans for up to 10 years and the Regional Investment Corporation will administer new loans. This is just silly. It's a duplication and an unnecessary one. The minister will say, 'The states weren't doing a very good job of it.' Well, I challenge that, but a good minister would work with the states, bring them in and say: 'I'm not completely happy with the way these loans are being administered. Let's do it better.' That's what a minister showing leadership would do, but it's certainly not what this minister is doing. I should say that the RIC is allegedly also going to administer some water infrastructure loans. We shall see. While I think of it, I move: That all words after "That" be omitted with a view to substituting the following words "whilst not declining to give the bill a second reading, the House notes the Turnbull Government's failure to provide timely and effective legislative amendments to support Australia's farmers and agricultural industries".

 I'm sure the member for Griffith will be happy to second that for me.

Ms Butler: Quite right!

Mr FITZGIBBON: The APVMA is a shocking pork-barrelling exercise that threatens our farming community. It's already destroying productivity in the farming community. The Pesticides and Veterinary Medicines Authority is a critical part of our farm economy and makes sure not only that farmers get their crop sprays and other chemicals and veterinary medicines that they need but also that they get them in a timely way— when new products are offered to the market, they get to the market very quickly. This forced relocation to Armidale is destroying the joint. Staff have left in a mass exodus, and it's impacting on the entity's capacity to do its job. I'll make a bet now: in the not-too-distant future the new minister, finally, will be making big changes. He will be revisiting the general policy order and saying, 'We are going to extend the time available to the APVMA to make this work,' but, more importantly, they will be changing it in a way that will allow more people to stay here in Canberra to work. In the not-too-distant future this government will be admitting that the APVMA relocation has been a failure. They will be left with no choice but to pretend they're having a relocation to Armidale, but in fact a large number of staff will be working here in Canberra, because they cannot find the personnel—the expert lawyers and the regulatory scientists—they need to do that work.

I challenge Minister Littleproud: he should just run up the white flag now and differentiate himself from the former minister and say: 'We're not going to waste $50 million or more on this relocation to Armidale. We're not going to undermine the productivity of our farmers. We're not going to threaten consumer health, because we eat the stuff that those sprays are used on and we want to make sure the regulator is up to the job. And we're not going to undermine our exports, because the APVMA plays a role in that regulatory regime, as well. We're not going to do that. We're going to gut this idea, forget the pork barrel and bring the APVMA back to Canberra, where it absolutely belongs.'

In posing my question—why are we debating this bill now?—I've touched on the history. People have already gone off the farm household allowance. They have exhausted their entitlement and here we are, in the last sitting fortnight, rushing a bill through the parliament to create this extension. We are still very unclear about what hoops people will have to go through who have already come off the farm household allowance. I invite the minister to explain that further to us when he makes his closing remarks. Is it going to be as hard as it was for people when they first went on the farm household allowance? Remember the member for New England saying: 'Oh, they don't have to apply or wait; they just get it.' That is the statement that led to the doctoring of his Hansard and subsequently the dismissal of his departmental secretary—one of the darkest periods of our history in this place. Why are we debating a bill that needs to be given effect basically from 1 July—this week? The government couldn't work out a month, two months or six months ago that in the absence of any other policy work in the last five years they're going to have to extend the farm household allowance? They had to wait until now? This is just incredible. Was it the drought tour that convinced the Prime Minister that he needed to extend the farm household allowance by a year? Surely not. I hope not, because that was just obvious to all and sundry.

What does the future hold for drought policy in this country? This is an interesting question. Something very curious happened in the Federation Chamber last night. I welcome the fact that during the week of the Prime Minister's infamous drought tour the relatively new Minister for Agriculture and Water started talking about climate, recognising the things I was saying earlier about accepting drought as not an abnormal event. He talked about resilience, he talked about adaptation and he talked about the challenge for some people in some parts of the country that were capable of being farmed 100 years ago and are not so capable of being farmed today. He was using all the right language. But the member for Calare had a motion on drought last night in which he mentioned none of those things. Interestingly, the member for New England contributed to that debate and, again, mentioned none of those things. I'm glad the member for Mallee is here, because he did. He understands this subject pretty well, in my view, and I'll give credit where credit is due. But who's in charge? Is the former member for New England still in charge of drought policy? He's still in denial, still wanting to roll out the boondoggles and defend his legacy. Or is the new minister in charge, backed by people like the member for Mallee? I hope it's the new minister, and I wish the member for Mallee the best in that regard, because we do need to get this job done. We need to embrace the intergovernmental agreement review. We need to rebuild the SCoPI process and construction, because that's the first step.

The other question I posed was on government priorities. Remember when agriculture was one of this government's five pillars of the economy? They hardly talk about the agriculture sector anymore. The member for New England was very fond of claiming credit when commodity prices were high and everything was good, but, now we have a crisis in all sorts of places, including the dairy industry, no-one wants to talk about agriculture anymore. Let's have a look at the legislative agenda. The Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017 was introduced into this House on 25 October last year. This bill enjoys bipartisan support. It has disappeared. The Export Control Bill 2017, a very important bill, was introduced into the Senate on 7 December last year. It hasn't been prioritised and has disappeared. It's an important bill which enjoys bipartisan support. The Biosecurity Legislation Amendment (Miscellaneous Measures) Bill 2018, another very important bill, was introduced into the House on 28 March last year. It is still in the House. It was introduced and has disappeared. The penalties for breaches of animal welfare standards in the live export trade were introduced on 24 May, never to be seen again. We know the reason for the last one: I foreshadowed an amendment, and the government won't bring the bill back, because it's fearful of people crossing the floor and of losing the vote.

How does this reflect on the government's priorities for agriculture? They won't even bring bipartisan bills into the House for debate and to be voted upon. They won't even put these bills on the legislative agenda. I don't have time to go through them tonight, but these are important bills. The department of agriculture is spending a very large slice of its time and resources trying to work out how to make the APVMA work in Armidale and the Regional Investment Corporation work in Orange, when it should be focusing on these very important and meaningful matters that affect our agricultural sector.

When the former minister was here, we heard about dams which were unproven, uneconomic and will never come to reality, and silly stunts around carp eradication. I said so many times that he was the worst agriculture minister in the history of Federation. That's in the past. I want the new minister to step forward and demonstrate that he's prepared to take the agriculture portfolio seriously. It's not just agriculture; they wiped fisheries and forestry out of the portfolio title—another silly mistake. We don't hear the new minister talk about fisheries or forestry. I know Senator Ruston does work in that area, but people want to hear their lead minister talk about these issues.

For five years a crisis has been looming in forestry because of our failure to grow the plantation estate, and what have we had in response? We've had an issues paper, which was eventually turned into a discussion paper and, last year, by no less than the Prime Minister himself, turned into a plan to have a plan—and we're still waiting for the plan. For five years we've known about the problem and have had nothing but discussion papers, the formation of committees et cetera. It's not good enough.

The opposition will be supporting this bill because, in the absence of any real progress on national drought reform for five years, we've no choice now but to further help farmers who haven't made that transition and haven't been given appropriate guidance or support by the government. Farmers will need another year, but what happens after that? Surely we'll be back here next year asking ourselves the same question if this government is not prepared to get serious about rebuilding the COAG process and about real collaboration with the states. Mr Littleproud has said it, but we want to see him walk the talk. They need to be serious about embracing the concept that the climate is changing and the change is here to stay. It has to be about resilience and adaptation. We have to help people find new business models, retrain and, sadly for some, acknowledge that they might not have an ongoing concern, because of a severely changing climate.


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