MYEFO: Labor cuts farm household allowance
The federal government has swung the budget axe over a crucial farmer hardship payment. See the details.
Victoria
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Cash-strapped farmers will face stricter eligibility requirements to access a popular hardship payment, as the federal government seeks to claw back $9.8 billion to the budget bottom-line.
The government’s mid-year economic and fiscal outlook, released on Wednesday, revealed new rules that mean farmers will not be eligible for the Farm Household Allowance if their minimum gross turnover is under $60,000.
The MYEFO papers show the cut will save the government $65.1 million in FHA-related payments over three years from 2024-25.
FHA recipients will also be forced to provide annual financial declarations to monitor ongoing eligibility, while case management will be strengthened to include annual financial reviews between recipients and case managers.
The FHA is a fortnightly payment in line with other welfare payments, such as Newstart, of about $1000 a fortnight for couples and $600 for singles experiencing hardship, regardless of the reason. It has been most popular during extended dry periods, with recipients able to claim the payments for four years every decade.
Currently, eligibility is approved on turnover, or the estimated value of agricultural operations, of $40,000. Anything below $40,000 is categorised as a hobby farm, according to the Department of Agriculture, Fisheries and Forestry.
More than 2660 farmers and their partners nationwide were receiving FHA assistance as of November 30, including 500 Victorian farming families or individuals, according to DAFF data.
Almost 5000 recipients have currently received their first four years of entitlement. To date, 18,000 producers and their families have received the payment after falling on hard times.
A government spokesperson said the changes were designed to ensure the FHA “goes to those who need it most,”
He said the program “got away from its original intent” under previous governments, with the adjustments aiming to support commercial scale farmers during times of hardship.
“The FHA was originally designed to provide financial support while allowing farmers to make decisions about the future, without creating welfare dependence,” he said.
“Importantly as we head into drier times, those doing it tough will still get that support through FHA or other services like the Rural Financial Counselling Service and Regional Investment Corporation loans.”
The new guidance will consider whether the farm enterprise has consistently operated with a turnover of less than $60,000 per annum for three years.
The government has also allocated more than $20 million over four years from 2023–24, and $2.3 million per year afterwards, to implement the FHA changes and for ongoing administration.
The announcement comes amid long-range predictions of extreme dry weather and the Bureau of Meteorology declaring that Australia had entered an El Nino weather pattern.
It follows an ABARES report released last week that forecast the average broadacre farm could expect a drop in cash income from $311,000 in 2022-23 to $113,000 in 2023-24, and farm business profit to fall from an average of $218,000 in 2022-23 to -$62,000 in 2023-24.
Nationals leader David Littleproud said Labor had made it harder for struggling farmers to access the allowance.
“Labor happily banks the revenue from the regions resources and agriculture industries while cutting regional infrastructure and drought programs to give them a better bottom line,” he said.
“In 18 months this government has done nothing but bleed regional Australia and its industries dry.”
The FHA cut was part of $9.8bn in budget cuts spruiked by Mr Chalmers after releasing the MYEFO.
However, the report shows three-quarters of those savings were made by the government pushing $8bn of previously flagged changes to the nation’s infrastructure program beyond the four-year forecasts.
Infrastructure Minister Catherine King last month culled 50 major projects after an independent 90-day review found a $33 billion cost blowout in the nation’s 10-year infrastructure pipeline.
The Shepparton bypass the biggest Victorian regional road project casualty.
Originally published as MYEFO: Labor cuts farm household allowance
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