Federal drought announcement: What you need to know

Interest free loans, support for isolated kids, and a surprise water deal form the centrepiece of the Government’s latest drought package, announced this week.

The National Farmers’ Federation has welcomed the step-up in support, but warned the drought is a long way from over.

“As summer looms the situation for many farmers and communities is becoming ever more dire,” National Farmers’ Federation (NFF) President Fiona Simson said.

“While rainfall last weekend provided respite and an uplift in morale in some areas, the reality is that without significant follow-up rainfall, drought will maintain its grip.

Ms Simson said the NFF had continued to ensure the voices of family farmers and rural communities managing drought were heard in Canberra.

“The NFF has called for tangible, immediate assistance for farming families, as well as help for struggling agriculture-dependent towns.

“Today, the Government has listened to some of the recommendations put forward by the NFF and our members – putting more on the table for those managing one of the worst droughts in living memory.

Ms Simson said it was vital that the benefits of today’s announcements flowed as a matter of urgency.

“We can’t afford for support for farmers and the bush to be stalled by red tape and bureaucracy. Time really is of the essence.”

Concessional loans expanded, interest holiday introduced

Prime Minister Scott Morrison and Drought Minister David Littleproud have addressed the NFF’s recommendation to provide an interest-free period for Regional Investment Corporation (RIC) drought loans.

RIC loans will now accrue 0% interest for the first two years (with no repayments due), before entering a 3 year interest-only period, followed by principle and interest for the remainder of the 10-year loan.

These same provisions will apply to a new product announced this week. For the first time, agriculture-dependent small businesses will be able to access a RIC loan of up to $500K – a move welcomed by the NFF.

“We know it’s not just farm businesses hurting, it’s the many small businesses that rely on agriculture – businesses like shearing contractors, rural suppliers and machinery dealerships.”

100GL in new water for fodder

Drought Minister Littleproud surprised many this week, but announcing that the Federal and South Australian Governments had struck a deal to secure up to 100 gigalitres of water for farmers to grow fodder, silage and pasture at a discounted rate.

“100 gigalitres will produce up to 120,000 tonnes of feed for animals on farms in drought,” Minister Littleproud said.

The deal relies on South Australia using Federal funds to increase production at its desalination plant, and in turn lowering its demands on the Murray Darling.

Ms Simson said the commitment to ensure fodder was available to continue to feed livestock through potentially enduring drought conditions was also sound.

“Retaining critical breeding capability for the livestock sector to ensure a swift recovery once this drought breaks is crucial. We are keen to understand more of the detail around exactly how the 100 gigalitres of new water will be allocated and managed for southern basin fodder producers.”

Support for regional kids, new infrastructure

The Government has responded to the NFF’s call to help families who are struggling with education and childcare expenses, with $15 million in new funding.

“The $10 million announced today for schools and $5 million for regional early childhood services will help those families who are struggling to keep their kids in school, and it can’t come fast enough,” Ms Simson said

The Government has also announced a ‘fast-tracking’ of two already-committed federal infrastructure projects in drought affected regions: the Building Better Regions and Roads to Recovery. By bringing this money forward, the Government aims to provide jobs and economic stimulus for drought affected communities.

Ms Simson said the NFF welcomed extended investment in local governments including the addition of another six local governments to the Drought Communities Programme which provides councils up to $1 million each and a further $50 million discretionary fund.

“Councils have their finger on the pulse of their communities, funding for local governments to invest how they see fit is positive.”

The Government dismissed however, NFF’s calls for local government rate relief and payroll tax concessions – saying these were a matter for the states.

“This is an area where we need more commitment and collaboration,” Ms Simson said.

“The NFF has been clear that local government rates are one of the biggest drains on the farm business balance sheet. Discounted or delayed rates would certainly be welcomed – governments at all levels need to do more to make this happen.

“Keeping farm workers employed is also important for workers, their families, their communities and to provide respite for farmers.”

A plan for the future

In addition to support for this drought, the NFF continues to call on the Commonwealth, and state and territory governments to commit to a new national approach to preparing for, managing through and recovering from droughts in the future.

“We need a national approach that includes industry, community groups and all levels of government at the decision-making table; effective review of drought measures; and provides farmers and rural communities with certainty on drought support before we go into drought,” Ms Simson said.

“The NFF has provided Government with its proposed National Drought Policy, which is a direct reflection of what our members believe is required to improve drought management in Australia. We look forward to continuing discussions about the policy’s adoption.”

As part of yesterday’s announcement the Government released the Drought Response, Resilience and Preparedness Plan, outlining its steps to date, in addition to the advice of the Drought Coordinator Major General Stephen Day. These documents can be found in full here.

See the full announcement by the Government here: