Interview with David Speers from Sky News

29 September 2019

Q: Is the Prime Minister right, the Farm Household Allowance isn’t welfare?

Minister: Well David, I’m really proud of the Farm Household Allowance I think you summarised it really well in that it is our government’s way of directly supporting those farmers who are experiencing hardship. We commissioned a review of the payment last year that was handed to government early this year, and I’ve been considering those recommendations post-election and have handed down our government’s response to that review on Friday. All 6 recommendations from the review—that was actually chaired by Georgie Somerset the chair of AgForce the state farming organisation out of Queensland, who as we know, Queenslanders have been doing it tough for upwards of 7 years for this drought. So it really gave government a really good snapshot and understanding of the issues around the Farm Household Allowance, and we’ve responded to every single one of those recommendations through making sure it’s going to be much more accessible to our farmers, we know from our own estimates upwards of 35,000 farmers across the country are doing it tough and are eligible to access this payment, but often when you get out into regional communities there’s sort of a discussion around it’s really tough, they don’t treat us like a business, it’s too hard, there’s too many forms, it’s too difficult, we got a trust, you know we structured our business this way it’s not going to be able to happen. My message—and I think the Prime Minister’s message to those farmers is please put yourself forward, this is not a capped program it is there, money on the ground for you and your family to get through tough time. So we’ve got Rural Financial Councillors who will sit at the kitchen table with you and work through it…

Q: Let’s have a look at why some farmers may not be taking it up, and the Prime Minister’s probably right there are some farmers too proud to put out a hand for help, but there are structural problems with the system and this is what I want to get to. One of the recommendations from this panel you mentioned its said; “The panel strongly believes that decoupling the Farm Household Allowance program from the social security act will create a tailored program that should more effectively reach those farmers who are in financial hardship.” So will this Farm Household Allowance be taken out of social security, out of Centrelink and paid in another way?

Minister: No David, what we’ve chosen to do is a partial decoupling and to actually go to the source of the problem which are cultural issues within Centrelink more generally…[Interrupted]

Q: I’m sorry what does partial decoupling mean?

Minister: Well it means we are making changes to how we treat off-farm assets, at the moment you can only have assets off-farm for instance up to $390,000 we’re actually going to bring that into the $5.5 million asset threshold, they’ll be able to access Farm Household Allowance. So the way we treat off-farm income for instance, we’re making changes to how they have to report their income, right now they’re having to report every fortnight, so there’s a real variability which halts their ability to re-invest in their business and therefore get back in business…[Interrupted]

Q: So how often will they have to report?

Minister: End of the year we’ll be doing a random and targeted auditing process, which is going to make it much more easy, and reflect the fact that we’re dealing with farm businesses that are making decisions on a daily basis, and we don’t want those decisions affected—business decisions affected by how it’s going to impact their payments, so we’re making a raft of…[Interrupted]

Q: so their going from fortnight to annual reconciliation, could there be the danger of big debts at the end of the year for farmers who may have underestimated their income?

Minister: No, we’re actually looking into how that debt accrual will be looked at and if you are eligible for $1 of assistance and Farm Household Allowance under the changes that we will be bringing forward in legislation, you’ll be getting the maximum payment. Rather than it being the variability that’s going on at the moment that will be ended, which is one of the great sources of frustration I think for farmers out there, when they’re trying to focus on [Interrupted]

Q: but you could still cop a debt but. So let’s be clear on this, if you’ve underestimated your income and you’re not going to Centrelink every fortnight but every year, could you cop a debt at the end of the year?

Minister: We’re not reconciling the end of the year, we’re using a format of targeted and random audits of those on Farm Household Allowance to actually assess [Interrupted]

Q: so how is it actually reconciled?

Minister: Well it’s going to be treated differently, more like the…Recognising the fact that as the review highlighted we needed to treat these farmers as businesses not as traditional welfare recipients. That was one of the reasons they sought to decouple from the social security legislation, so the reality is we’re always going to have…[Interrupted]

Q: Is Centrelink the ones doing the work here?

Minister: Yes, and that goes to my second point a raft of changes around how Centrelink itself interacts with our farming communities and making sure we have a much more farmer focused, client case managed approach, so they’re not having to explain their circumstances to twenty different people, they’re not having to sit on the phone for hours on end—which at the end of the day means they’re not doing what they need to be doing making sure the stock are fed etc. Getting some off farm income if that’s what’s required to keep the farm running. [Interrupted]

Q: Just to be clear on this debt issue. Can Centrelink issue them a debt if they’ve had more income than they thought they were going to have?

Minister: So if there assessed as being eligible for Farm Household Allowance, rather than it being paid on a sliding scale if you’re eligible for $1 of Farm Household Allowance you’ll be paid the maximum rate, which if you’re a couple—like 80% of our recipients are—is up to $1000 a fortnight..[Interrupted]

Q: If you underestimate your farm income you will not get a debt? No risk about it?

Minister: No, no. That’s why we’ve changed it from its regular reporting to a random and targeted audit at the end of the year.

Q: One of the other concerns farmers talk about is if they have to destock, but selling it can put them over the income threshold to receive the Farm Household Allowance. [Interrupted]

Minister: No Longer. We’re changing for instance, some farmers may be looking at agisment as a way to raise some income that was negatively impacting their payments under the former arrangement. That will no longer be the case. We’re doing a raft of changes around how we’re going to transform on-farm, off-farm assets and income, we’re also making sure that we tighten up our Rural Financial Counselling Service which is there to actually support farmers to make really good business decisions. So you’re on it for 4 years…[Interrupted]

Q: and that’s important, but just to be clear on this. This is a significant change. You can sell your stock and the income from that is not going to affect your Farm Household Allowance?

Minister: No.

Q: Ok, just to come back to the first question here. Is this welfare or not?

Minister: This is support for a key industry in the Australian economy. Australians very much understand that we…[Interrupted]

Q: so a subsidy for an important industry?

Minister: Well its support for farmers, because we know that our national economy depends on the productive capacity of our rural sector. Australia has always stood by our regional industries in particular our farmers and primary producers when times are tough. One of the other changes we’ve made David…[Interrupted]…Right now our Farm Household Allowance, you’re only able to access that for 4 years in your entire lifetime as a farmer, which is just ridiculous. We know in this country every two decades we’re going through a period of significant hardship as we are now, so we’ve made a change now that every decade our farmers will be able to access this payment for up to 4 years which really reflects the reality of primary production in Australia.

Q: These changes you say that mean you can have it for 4 years in every decade, there are farmers that have been in drought for 6, 7 8 years—why can they only get it for 4 years?

Minister: We’ve made other changes right across the system, Farm Management Deposit schemes etc. to help farmers and primary producers to plan for the future. Farmers aren’t just sitting around expecting the government to just step in when times are tough, they’re running world class businesses [interrupted]

Q: so are you saying they should get no more help?

Minister: We’ve got a range of other systems in place to help them prepare for, which is in a country link Australia—a semi-regular and current…but when it does go on for in excess of a couple of years it is time for state and federal governments to step up, and we have.

Q: My questions is if you’ve been in drought for more than 4 years—and there are plenty who are—you get no more help?

Minister: No the case is that Farm Household Allowance is there, and this was another recommendation out of the review, that is not a drought payment it’s actually a hardship payment, so it was handed out during the dairy crisis, and also in issues of flood [interrupted]

Q: but for four years. I’m asking if you’ve been in drought longer than that what happens?

Minister: At the end of your Farm Household Allowance 4 years there needs to be decisions you’re making around do I sell up, Is this something I want to do for the rest of my life, if not we’ve got a package of support there to help you retrain.

Q: so that’s it, after 4 years you really look at getting off the farm?

Minister: These are decisions business people have to make. At the end of the 4 years of assistance, and we’ve got a range of financial counselling to help farmers make these decisions, do I need a succession plan? Or do I need to make system changes on farm to make sure I’m more sustainable going forwards? 89% of recipients of Farm Household Allowance have said that it has absolutely helped them improve over that 4 years of counselling, improve their financial situation. We know that I think 40% of 12,500 farms that have accessed this payment over the last 4 years have actually gotten off it way before the 4 years because of the structure around helping them structure their business better.

Q: Do you accept that there are some that have been on it 4 years and still need it?

Minister: I accept that when you’re doing it tough you’re needing a range of support mechanisms. I don’t accept your assumption though that as soon as a drought hits that farmers need farm Household Allowance on day 1, because to run a business in this country you should be actually planning ahead for the fact that it is going to come again, we will have another drought and that’s why we’ve got farmers stacking away a lot of money in their Farm Management Deposit schemes etc. planning for that non-rainy day, which is exactly what they should be doing.

Q: If it’s not welfare, if it is support or a subsidy does that risk our free trade agreement?

Minister: It is a support mechanism, and we’ve got a range of support mechanisms not just Farm Household Allowance but as the drought continues we’re supporting the regional communities that underpin the agricultural production through for instance the $13 million announce on Friday to local councils, who are supposed to be spending that money to ensure that small businesses in these regional communities are actually continuing, so there’s a whole range of things we’re doing.

Q: so none of this puts at risk our free trade agreement obligations?

Minister:  No, no it doesn’t at all. This is not a US style farm bill subsidy program at all. Indeed, as an exporter of 70% of what we produce we don’t want to be doing anything here at home that puts at risk our ability to trade.

Q: Dams, after being in government six years, a lot of talk about dams, why aren’t we seeing them built yet?

Minister: This is one of the most frustrating topics I think as a National Party MP and somebody who cares about rural and regional Australia. To be a government that has been able to manage the economy enough that we’ve got money on the table to build infrastructure out there in regional Australia that helps us to drought proof for the next time, and to have state governments unwilling and unable to partner with us. We just can’t roll in with our diggers and our graters and roll in to a state and start digging, we have to have a partner in this because of sovereignty in states, the money’s on the table.

Q: Your colleague Susan Ley says she’s going to speed things up at the Federal level, can that make any difference?

Minister: You can only speed things up so far, at the end of the day if you’ve got Lisa Neville here in Victoria saying no more dams despite CSIRO saying we should get on with it. You’ve got Palaszczuk up there in Queensland dragging her heels continuingly on drought busting infrastructure and you get NSW finally coming to the table today with $84 million which is fantastic news. The reality is we’ve been there the whole time waiting, we can’t roll in with diggers and start building these things we have to partner with states, and I’d suggest that they stop trying to play petty politics these two Labor states being Victoria and Queensland—get on with it, think about our regional communities and drought proof this nation.

Q: The African swine fever that has been spreading globally, it’s getting very close. How prepared are we?

Minister: We’re doing everything we can to ensure that African swine fever does not reach our shores, it would decimate 2,700 producers and the 34,000 jobs that go along with that industry, but more concerning is its impact on our pest and disease free status. We’re one of the few nations that doesn’t have this disease and we’ve seen China having to cull 50% of their pork production, they’ve got a 10million tonne deficit in protein which is an opportunity for a country like us, but it’s going to have repercussions for decades on trade. We want to keep our pest and disease free status as a nation, it’s one of our gold standard value propositions as an exporter. We’ve been increasing processing and scanning of people and items coming into Australia. People are still disobeying our biosecurity laws, we can send them home, we can fine them and that’s what I’ll be encouraging my biosecurity officials to do.