More cash for drought relief on the way

A new drought package will be taken to cabinet for approval next week as Scott Morrison steps up efforts to help farmers.

Prime Minister Scott Morrison and Minister for Agriculture and Water Resources David Littleproud during the Prime Minister's drought tour in South West Queensland. Picture: Alex Ellinghausen

A new drought package will be taken to cabinet for approval next week as Scott Morrison steps up efforts to help farmers and rural communities.

A beefed-up relief plan was given the green light by the expenditure review committee on Wednesday, with a final tick-off being sought on Tuesday when the Prime Minister returns from the East Asia Summit in Thailand.

Government sources said the package would include a continuation or expansion of ­existing programs, and some new ones.

The government says its current drought strategy has three arms worth $7bn over time: direct household income relief to struggling farmers, a Future Drought Fund aimed at building long-term resilience, and grants for local council projects under the $123m Drought Communities Program.

Nationals MPs have pushed for an extra $1.3bn in drought stimulus, including a tenfold increase in the DCP, arguing that with minor right-leaning parties such as One Nation and the Shooters, Fishers and Farmers Party appealing to many rural voters, such a commitment was essential to hold seats at the next election.

Sources said Josh Frydenberg’s mention of small business in relation to drought measures indicated one possible category of new initiatives in the package, since there are no big programs directly targeting this sector.

In its recent submission to the government, the National Farmers Federation urged it to consider subsidising the payroll expenses of farming businesses equal to the Newstart Allowance. Given the ­influence of the peak farming body, the government is likely to take up some, if not all, of its recommendations.

Apart from the payroll tax proposal, the NFF has called for relief from local council rates. It suggests farming businesses in severely drought-affected ­regions have the option of deferring local government and pasture lease rates for a defined period without incurring default interest, with the federal government providing funding to the relevant local government area to cover the shortfall in revenue.

The NFF has asked the government to consider providing a top-up payment of at least $2000 per child to the Assistance for Isolated Children allowance, and more funding for rural schools and early learning services.