In April this year, the then Labor government announced a national farm finance package that was aimed at helping farmers with their financial arrangements as they faced the many challenges, both anticipated and extraordinary, of running their businesses.
The package had four components:
• short-term assistance in the form of concessional loans for productivity enhancement projects or debt restructuring;
• funding for around 17 additional fulltime counselors with the Rural Financial Counseling Service;
• increasing the non-primary production income threshold for Farm Management Deposits (FMDs) from $65 000 to $100 000, and allowing consolidation of existing FMD accounts; and
• establishing a nationally consistent approach to farm debt mediation.
The announcement included funding of $30 million a year for two years for each state and territory.
So, under the first part of this program, Tasmanian farmers would have had access to $60 million over two years to assist them to build resilience into their businesses. This could help them to deal with the downturn in commodity prices, the high Aussie dollar, the closure of the abattoir on King Island, contracting contracts and falling prices for processing vegetable growers; or it could give them a leg up to take advantage of the irrigation water they have purchased by installing new irrigation systems, or moving into new enterprises like dairy conversions or fruit and nut trees.
In the period before the federal election, TFGA worked closely with the state government to secure a final sign off to start delivering this package for Tasmanian farmers. A few states worked their way through this process more quickly and have been allocating funding to their farmers for some time. However, we were keen to ensure that the Tasmanian component was tailored to meet the particular requirements here and were prepared to make the extra effort to achieve a better outcome.
Unfortunately, when the federal election was called, a number of state components had yet to be signed off – including ours. And that meant all bets were off.
Once the election was over, we set to work again to support our state government representatives in negotiating an agreement with the incoming federal government. However, despite our best efforts, the process seemed to be stalled.
Last week, without warning, Barnaby Joyce, the federal Minister for Agriculture announced that the funding allocation for Tasmania under this program has been slashed by half and, effectively, the money would be given to Queensland and WA. Furthermore, the package is to be refocused as a drought relief program.
So we lose $30 million in the first few weeks of the Abbott Government, money that could have been used to secure finances, facilitate investment and shore up or create jobs here. Yet, in the same breath, that same government has accepted the $100 million forest industry compensation package announced by the outgoing Labor government without review – a program that has so many loopholes in it, you could drive a log truck through them – and people have.
You can argue that parity between the states is not a sound basis for allocating this or any other funding package – but that was the agreement. However, the Farm Finance package was never intended to be a drought relief package. The word ‘drought’ was not mentioned in the government’s announcement, though we all understood that it was one of the many factors that could be behind the need for farm debt restructuring. If the new focus is to be on a mainland-style drought program, the chances of any Tasmanian farmer accessing funding are remote.
And this raises many questions. Are we being punished for trying to drought-proof our farms through irrigation? Is this an attempt to shore up votes from larger states? Or is it because we are small and different?
There was no consultation with us prior to the announcement about the proposed changes. Since that announcement, not one person from the federal government has had the courtesy to contact us and explain what is going on.
This seemingly ad-hoc decision making process is not just politically inept – it’s just plain bad manners. Let’s hope this approach is not going to be the hallmark of the new federal government.
