Transcript - Radio Interview - SA Country Hour - Monday, 6 August 2018

SUBJECTS:  Drought Policy.

KATH SULLIVAN: Over the weekend, Prime Minister Malcolm Turnbull announced the extension of financial support for drought-affected farmers. The Farm Household Assistance Scheme will be broadened and more money has been made available for mental health support. David Littleproud is the Agriculture Minister, he spoke with my colleague Fran Kelly a short time ago.

LITTLEPROUD: Well look this is an additional $12,000 to the already $538.80 that people get, the farmers get it per fortnight so this is a supplementary payment. So we have come to this amount predicated on the fact that we have seen the effects of this drought is compounding and the costs in making sure that they can keep their family going, keeping bread and butter on the table is increasing and it is important and we understand that. We actually had to make sure that we are fluid with this situation and are agile. The reality is this is moving quickly and we will continue to listen. That’s what we are doing, we are coming out, listening and we are acting as we need to and we will continue to act as we need to. Let me put this in perspective, the Federal Government’s responsibility and the agreement we have with the States is to look after the people. The States’ responsibility is to look after the animals. This payment is to make sure that we are looking after the people in concert with additional funding announcement into mental health. This additional $12,000 into a family that are already probably getting close to $27-28,000 through the Farm Household Assistance Payments but they are going to have more money in their pockets to be able to keep their electricity on, to keep them going, but we are not in the business of keeping livestock out of these payments alive. This is at their discretion but this is about to ease the pressure at the household level.

FRAN KELLY: Not every farmer is eligible for this assistance but you are lifting the assets test cap for the Farm Household Allowance, as I understand from $2.6 million to $5 million. I guess some will question why asset-rich farmers will receive emergency payments. How do you answer that criticism?

LITTLEPROUD: Well those assets might sound a lot but they’re not producing anything. That is the issue that you have as a farming sector.

KELLY: The tractors aren’t working because there’s nothing to till.

LITTLEPROUD: Yep, so the challenge is they’re not producing any income out of it. Whereas people in the city might have an asset that is producing income for them straight away. This is the insidious nature of drought and it is why we’ve understood it and we need to make sure that we continually react as circumstances change. The only silver bullet to this is rain, that’s the only silver bullet. There is a suite of measures that we are going to have to roll out in concert with the States. We have to cooperate with the State to make sure that we are reacting to the changing circumstances.

KATH SULLIVAN: Ag Minister David Littleproud. Well the man who would like his job, Opposition Agriculture Spokesman Joel Fitzgibbon joins us now from New South Wales. Mr Fitzgibbon, you’ve previously said that the FHA, the Farm Household Allowance, is failing farmers. Is giving farmers an extra $12,000 a good use of taxpayer money?

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Well I think the strength of community support for farmers in drought is a fair indication that the broader community wants government to act as it does believe government has a role to play and I absolutely believe that. Is $12,000 enough? Well we have of course seen mixed reactions from farmers. We welcome the cash payments. Cash can only help but what is missing is a couple of things. One is a proper revisiting of the complexities and difficulties people have in securing Farm Household Allowance. The $12,000 is a supplement to the current system and shifting income or asset tests around won’t make the paperwork any easier or lower the hurdles that people I speak to have been facing. The second problem is of course the lack of a long-term strategy. We do have to accept I think or indeed at least risk manage the idea that this climate will continue to become more challenging and we need long-term solutions. When the COAG, the State and Commonwealth Governments agreed five years ago to retain an income support system they put a time limit on it and they put a time limit on it because we collectively realised that we need long-term management of the process and sadly that is something we have been lacking in the last five years. Barnaby Joyce effectively abolished that COAG process.

SULLIVAN: So if you were to form government, would you ditch the Farm Household Allowance?

FITZGIBBON: No I wouldn’t. I think there are some foundations of drought policy that you have to build upon. The first is that there has to be some sort of income support because there will always be circumstances that aren’t manageable. The second point is that the focus needs to be on building that adaptation that resilience and drought-proofing as best you can if you like, and there are a number of ways you can do that and it can’t be just one way it has to be a collection of things. First you have to put in place the tax incentives to allow people to invest and plan and save along the way and I have to say in recent years the Coalition Government has a done a few things there, I’m happy to acknowledge that they have put in place some additional acceleration depreciation plans so people can invest and wipe that money straight off, Labor also has a plan which does that. We have the Farm Management Deposit Scheme, so that is very important…

SULLIVAN: Just on that Joel Fitzgibbon, do you think that the Farm Management Deposits are working? Weren’t they put in place to try and prevent the situation that we are in now?

FITZGIBBON: Well it’s an interesting proposition because if you have a look at the latest figures at the end of the June quarter, we have $6 billion in those Farm Management Deposit Scheme accounts but we don’t see them drawing down quickly either so those who are able to are putting money away and taking advantage of the tax concession, but they don’t seem to be drawing down very quickly in this time of drought so I suggest that those who are putting it away are also the same people who are meeting with greater success in terms of becoming more resilient to drought so that is why we need to work on those who have not been so successful, not through any fault of their own necessarily, but to for whatever reason, haven’t been able to embrace change and just last week I announced a policy for using our agricultural based research and development corporations to further develop drought policy in terms of best practice land management effort and at the same time getting that research down on to the farm where it really counts.

SULLIVAN: Well you’ve called it a climate response plan and I just wonder what that practically means?

FITZGIBBON: Well it means using the council of RDCs, that’s research development corporations, to lead the development of a strategy with proper objectives, goal posts, milestones so that in this next five year period, we just lost five years in my view, this next five year period we start to develop a real, tangible plan for both further developing the science, and we must follow the science, but getting through extension, getting those results down on to the farm where is really counts.

SULLIVAN: I wanted to ask you, Linda Botterill is an academic based in Canberra who has some experience of studying drought support. She recently told us here on the Country Hour that she believes the best form of support from government or even from the banks is to use a HECS-style loan scheme which would give farmers access to funds when it was needed but then would be paid off once that farmer was again back on their feet and had an income that had hit a certain threshold, much like university students do. She considered that to be far more useful use of taxpayers’ funds and support for the industry than cash handouts. What do you think about that idea?

FITZGIBBON: I have a great regard for Linda and her Associate Chris Chapman from the ANU, I’ve had these discussions with them and in fact I’ve sat on public panels with them talking about drought. This has been a conversation of long-standing. Look it may be a part of a mix but we need to get the COAG process going again so we can have this conversation. Generally speaking, I have to say, we have learned that more debt, no matter what it is for and how it is repaid and how its interest is calculated, is not an answer for anyone. So we need a suite of policies, we have a comprehensive approach but if we are not looking well into the future, I mean what happens when farmers get their second $6000 payment and it hasn’t still rained? God forbid. So we need to look beyond the sort of welfare income support payments and ask ourselves what is it going to look like over the next ten years and beyond and what are our long-term strategies for battling drought and it has to be down on the farm helping farmers to embrace the very best farming methods which allow greater moisture retention in our soils for example. That is what is should be and needs to be all about.

SULLIVAN: At a quarter past 12, Opposition Agriculture Spokesman Joel Fitzgibbon is our guest  this Country Hour. Now there has been a lot of focus on your home state of New South Wales but I wonder what you understanding is of the season here in South Australia at the moment.

FITZGIBBON: Well, I spoke at the Grains Conference in Melbourne just last week and had many conversations with grain producers and other stakeholders along the supply chain. And while I know there are challenges, you are not facing quite the same difficulties. We are in New South Wales and in Queensland in particular, indeed we know now that grains are being transported from Western Australia and South Australia to New South Wales and Queensland to assist those in the greatest need but our policy approaches can’t be based just on what is happening now, they have to be based on the assumption that we are all going to continue to face challenges. And can I say back on my research and development corporations, the grains RDC, Meat and Livestock Australia, Dairy Australia, they are already doing good research and some extension so we have the vehicle there now, we just need to re-double our effort.

SULLIVAN: And just before you do leave us today Joel Fitzgibbon. On another issue if you wouldn’t mind, I wonder how your plans to shut down the live export of sheep are getting on?

FITZGIBBON: Well I never described it as a shutdown of the live trade. I’ve certainly said and it is Labor’s policy to put an end to that dreaded summer trade at the first possible opportunity and to phase out the balance of the trade over probably a five year period. Now if you just want to compare that with the current Government’s policy, Western Australian and South Australian, particularly Western Australian sheep producers are suffering at the moment because the Coalition Government has killed the trade anyway by regulation and by omission, but there is no transition plan, there is no support for farmers who have been affected. What we’ve said is we will do it over time and work with farmers and other stakeholders along the supply chain to put in place a transition plan and to take them to what I’ve described as a possibly better place, a path to greater sustainable profitability.

SULLIVAN: Thanks for your time today Joel.

FITZGIBBON: A great pleasure.

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