News

Govt considering stimulus package for drought-affected communities

Beef Central, 16/04/2015

The Federal Government is reportedly close to finalising a new drought assistance package for Queensland and New South Wales which would involve funding “shovel ready” projects to encourage people to stay in drought-affected communities.

The funding would be prioritised for regions in both states that are now entering at least their third consecutive year of drought.

Federal agriculture minister Barnaby Joyce has told metropolitan media that the new package is yet to be officially signed off but would be aimed at injecting stimulus into local communities.

Mr Joyce told ABC Radio’s World Today program that he has asked a number of local councils to detail shovel ready projects which could be rolled out under the plan.

“What we’re trying to do is make sure that we create a stimulus package that doesn’t just help people on the land, but creates the liquidity in those areas so that the local shop keeper, boilermaker, fitter and turner, that they also get the chance to access some of that money.

“Projects such as improving the dog fence, projects such as cleaning up ramps, projects such as repaving streets – these are the sorts of projects that means the money’s not wasted, it actually leaves the area in a better form than what it was before.”

Local Government representatives told the program it is was important that decisions about how the money be spent remain in the hands of the communities themselves, if the Federal Government is to avoid repeating mistakes of the previous stimulus plans, such as the Building the Education Revolution Fund and the pink batts scheme.

The Australian said the funding is likely to be between $20 million and $40m.

Drought rethink urgently needed: AgForce

Earlier this week, AgForce urged Federal Government to “rethink” its drought assistance policy and recognise that existing frameworks were missing the mark.

AgForce CEO Charles Burke and representatives of other State Farm Organisations presented Mr Joyce at a meeting in Canberra with an agreed set of urgent recommendations aimed at addressing the barriers to those in genuine need of Federal assistance.
“These recommendations are not new and many have been raised previously with the Minister, his office and the Department when existing drought schemes were first introduced and again last year.”

The recommendations presented yesterday included:

  • Simplifying applications for the Farm Household Allowance and applying farmer-friendly asset and off-farm income tests that don’t act against drought preparedness and management efforts;
  • Extending access to the FHA for farm workers so they don’t have to leave employment or the local area to apply;
  • Getting better primary lender support and extending repayment periods for concessional loans so repayment is not required before farms have fully recovered from drought;
  • Provide greater relief from immediate financing costs by reducing loan interest to be in line with the actual cost to government;
  • Extending further funding to enable access to concessional loans for farm-dependent rural businesses;
  • Provide further funding for the well-received water infrastructure rebate which addresses animal welfare concerns and could be extended to include resilience-building improvements;
  • Provide emergency income to drought-affected local governments, such as grants for infrastructure projects like wild dog and macropod fencing.
  • Mr Burke said preliminary and distressing results of a drought survey of AgForce members reiterated the need for urgent action.

Some of the preliminary results of the survey of more than 100 producers across 30 shires, which began on April 8, include:

  • 87 per cent of livestock producers were running less than 75pc of their long term livestock carrying capacity and 22 pc less than a quarter;
  • Reduced calving rates (90pc reported being down 40 to 70pc) and heavy destocking pointed towards an extended recovery period and debt likely to be needed to restock in many cases.
  • 61 pc had less than half their potential surface water supply and 16 pc had less than 10pc.
  • 45pc had experienced a reduction of up to 50pc of their gross income; 30pc experience a reduction of 50pc-75pc and 18 pc greater than a 75pc reduction.
  • 23pc of respondents had increased their total debt by 26pc to 50pc and 10pc had more than doubled their debt levels as a direct result of the current drought.
  • Two thirds reported that their total farm and non-farm assets were reduced by 11 to 50pc and 7pc estimated that their assets had more than halved.

Robbing Peter to pay rural poor: Fitzgibbon

Shadow agriculture minister Joel Fitzgibbon said the details of the package announced so far suggested the Federal Government was “robbing Peter to pay the rural poor”.

“I note the funding details are yet to be finalised and it has been proposed the funding would go to local infrastructure projects from annual local government grants,” Mr Fitzgibbon said.

“This is the same Government that cut $925 million in Financial Assistance Grants to regional and local governments for vital road and infrastructure projects, by freezing indexation.

“We know this has had a big impact already, forcing Councils to cut back on their road maintenance budgets and other services.

“To be now talking about, in effect, returning a small percentage of those cuts as part of a ‘stimulus package’ just shows you how disastrous the last Budget was.”

Reconstruction Board is the answer: Katter

North western Queensland MP and Katter Australia Party leader Bob Katter said the most effective drought assistance solution was right in front of the Government’s eyes – an ARDB (Australian Reconstruction and Development Board).

Mr Katter said that while he welcomed any package that gave a leg up to small communities affected by the drought, the package did not go anywhere near far enough to saving the agricultural industry in Australia.

“You need to save the base industry, without that the towns have got no hope,” Mr Katter said.

“The reality is that these towns depend upon the cattle industry and to some extent the wool industry that was destroyed by de-regulation.

“Unless the base industry is to survive, all the propping up and government handouts in the world are not going to result in the inland being saved.”

Mr Katter said “everybody in the industry” agreed that a reconstruction board was desperately needed and that the beauty was that it would not cost the Government a cent.

“Whether it’s Shire Councils, industry representatives or massive grass roots crisis meetings like Winton’s ‘Last Stand’, there has been complete unanimity of opinion that a reconstruction board is needed,” Mr Katter said.

“The beautiful part is that it costs the Government no money.

“It shrinks the bank repayments for an average million dollar debt from $150,000 in interest and repayments to probably $25,000 per year, once the Government takes over the debt at a reduced rate and loans it back to the farmer at the Government interest rate of 2.25%.

“So the farmer’s commitments shrink, which means that almost all will pull through.

“That has been the experience with every single reconstruction board initiative in the last 100 years and I speak with authority as I was the Minister with primary responsibly when we did it for the sugar industry in Queensland.”

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