Joyce defends drought loans scheme

Last week Labor Shadow Agriculture Minister Joel Fitzgibbon said the Abbott government's response to the drought had been an “abject failure”.

“Nowhere is that more true than in South Australia where not one drought concessional loan - not one loan - has made its way to a drought-stricken farmer,” he told the House of Representatives.

“This is the State which Minister Joyce took money away from to help farmers in other States.

“We all know that the South Australian government administers the program on behalf of the Commonwealth on terms agreed to by the Commonwealth.

“There is a reason that South Australian farmers are not getting drought assistance: because this government is an incompetent one.”

In April 2013, the former Labor government announced a $420 million Farm Finance package. It was underpinned by concessional loans to assist farmers dealing with short-term viability issues caused by low commodity prices, high input costs and an ongoing high Australian dollar.

But immediately after coming into office, Mr Joyce reworked the scheme to direct funding towards larger States, such as NSW and Queensland, facing serious drought pressure, rather than an even funding distribution.

At the time, he said while the best solution to drought was rain, the government was also working to open new markets to assist primary producers dealing with viability issues.

Mr Joyce said only Queensland, NSW and Victoria had signed off on delivering the package that was announced in the 2013 federal budget.

He said his department would also streamline assistance offered to farmers via the Farm Household Allowance scheme, due to the “extensive” bureaucracy and paperwork surrounding the application process.

Mr Joyce said the loans package he inherited from Labor was “clumsy” as it had the equivalent amount of money going to places with “vastly different requirements”.

He said he wanted to rework the package to deliver funding to areas in most need while including other support measures like water infrastructure, despite the tight fiscal climate.

“I don’t think people who are under the pump appreciate a partisan fight; they just want to make sure that you’re both working in the same direction,” he said in late 2013.

“There are no prizes for turning their misery into your point-scoring political match.”

In 2013, NSW Nationals Senator Fiona Nash also criticised the Farm Finance program for being “unfair and poorly targeted”.

She said rather than ensuring the assistance was properly targeted, the then Labor government had capped the assistance at $30 million for each State and the Northern Territory.

“This is despite there being a huge difference in the number of farmers per state,” she said.

“For example, there are about 43,000 farmers in NSW and only 522 in the Northern Territory.”

In Senate estimates, Senator Nash asked the then Agriculture Minister Joe Ludwig if he’d taken the number of farmers per State and Territory into account when announcing the program.

She said the Senator “vaguely” replied that it was "a decision by the government".

“How do you explain to a farmer in NSW that they may miss out while the Northern Territory is awash with cash to help its significantly smaller number of farmers? It doesn’t make sense,” Senator Nash said.

Last week, Mr Joyce said when areas are outside the scope of the concessional loans scheme and unable to access them, by reason of too much rainfall, “by gosh we hear it in our office”.

“They absolutely ring the phone off the hook,” he said.

“So we know it is working because when people can’t get it they let us know about it and they ask us for greater access and a greater distribution of where these loans should be accessible to.”

Mr Joyce said the loans were originally allocated on a pro-rata basis to every State which received the same amount of money to hand out, but that was “an absurdity because Tasmania ultimately is a great deal smaller than Queensland”.

“In that recalibration we have refocused those loans onto the areas where there is drought and obviously in the bigger pastoral precincts, so that might be part of the reason that some of the loans haven’t been lent out,” he said.

Mr Joyce said the government had also recently extended $250 million in support loans for another 12 months at 3.21 per cent interest rate over 10 years, and the federal government was also looking to reduce that rate even further.

In February 2014, Mr Joyce and Prime Minister Tony Abbott announced $320 million in drought assistance measures, including an additional $280m in concessional loans of up to $1m, at 4pc interest rate – down form 4.5pc.

"This is not a hand out - it is a hand up," Mr Abbott said at the time.

Changes to Farm Household Allowance payments were also due to be implemented on July 1 2014 but were moved forward to March 3, with the Prime Minister’s backing.

That package also included $12m in water infrastructure; $10.7m to increase delivery of social support services in drought-affected areas; and $10m to help prevent wild dogs and feral pigs damaging graziers’ properties.

More recently, with the $250m loan extension facility, the Abbott government also announced $35m for “shovel ready” projects led by local councils to stimulate economic activity in regions of Queensland and NSW facing up to four years without rain.

Another $25.8m was allocated for wild dog and pest management programs; $20m to expand existing mental health and community support programs; and $1.8m for rural financial counselling services.