Explanatory Memorandum
(Circulated by authority of the Minister for Agriculture, the Hon. Barnaby Joyce MP)General outline
The Farm Household Support (Consequential and Transitional Provisions) Bill 2014 (the FHSCT Bill) is a companion Bill to the Farm Household Support Bill 2014 (the FHS Bill).
The FHS Bill provides the mechanism to implement the Farm Household Allowance (FHA), an income support payment for farmers and their partners who are in financial hardship.
The FHS Bill delivers the Australian Government's commitment under the Intergovernmental Agreement on National Drought Program Reform (IGA) to provide a time-limited income support payment for farmers and their partners based on individual need. The FHA is to commence on a date set by Proclamation and replaces the existing Exceptional Circumstances Relief Payment (ECRP), which was only available to farmers in regions experiencing exceptional circumstances, such as drought.
The FHSCT Bill repeals the Farm Household Support Act 1992 (FHSA 1992), which contains provisions relating to the exceptional circumstances arrangements, the related payment of ECRP, as well as other payments and schemes that have ceased. These other payments and schemes include 'farm household support'; 'farm help income support'; 'farm help re-establishment grant scheme'; 'farm help advice and training scheme'; and 'dairy exit payments' made under the 'DEP scheme'.
The FHSCT Bill makes consequential amendments to other Acts that refer to the FHSA 1992, provisions of the FHSA 1992 or payments made under the FHSA 1992; as well as removing references to a historical payment of 'farmers hardship bonus'. The farmers hardship bonus was payable under the Social Security Act 1991 (Social Security Act) and related to a payment under the FHSA 1992.
The FHSCT Bill also makes consequential amendments of a minor nature to other Acts to support the full and effective implementation of the FHA. These include amendments to make it easier for farmers either currently receiving income support under the Transitional Farm Family Payment (TFFP), or who receive it under the Interim Farm Household Allowance (IFHA), to transition to the FHA when it becomes available following passage of the FHS Bill and the FHSCT Bill.
Other amendments made by the FHSCT Bill include contingent amendments of a number of Bills which are currently before Parliament, including by reference to the passage of other legislation; and general transitional provisions.
The Department of Agriculture consulted relevant industry stakeholders and Australian Government agencies on the policy behind the FHA. Relevant agencies and stakeholders accept of the need for reform of government drought support arrangements. In 2008-09 the national review of drought policy was undertaken. It included an economic assessment by the Productivity Commission; a climatic assessment by the Bureau of Meteorology and CSIRO; and a social assessment by an expert social panel.
Following the national review of drought policy, in 2010 the Australian Government, in partnership with the Western Australian government, conducted a two year pilot of drought reform measures in regions of Western Australia. The pilot tested a range of programs to inform the design of a new national approach to drought support. The pilot was reviewed in 2011 by an independent panel, which reported strong support for an income support payment for farm families in hardship that is based on demonstrated individual need rather than a climatic trigger. Furthermore, the panel emphasised the requirement for reciprocal obligations to help farm families realistically assess their financial position and take steps to become more self-reliant.
The FHA aligns with social security law where possible and will be delivered by the Department of Human Services (DHS). Case managers from DHS will assist people to apply for payment, take action to improve their situation and refer people to other government and non-government services for further assistance.
A separate explanatory memorandum for the FHS Bill 2014 explains in full the effect of the provisions that implement the FHA.