Morrison’s $5bn fund to survive severe dry spells

A new $5bn future fund will be established to drought-proof the nation and deliver targeted funding to support farmers.

Scott Morrison and Michael McCormack at Mulloon Creek Natural Farms, NSW. Picture: Kym Smith

A new $5 billion future fund will be established to drought-proof the nation and deliver targeted funding to support farmers, ­researchers and financially stressed regional communities.

Ahead of the National Drought Summit in Canberra today, Scott Morrison said the cash injection, raised from raiding Labor’s Building Australia Fund, would put “money aside for non-rainy days in the future”.

Using the same model as the successful Medical Research ­Future Fund, the Morrison government will provide an initial $3.9bn commitment, growing to $5bn by 2028.

The Future Drought Fund will be managed by the Future Fund Board of Guardians, currently chaired by former treasurer Peter Costello.

The Prime Minister said the drought fund, which will require legislation, will unlock $100 million a year from July 1, 2020. Those funds, to be allocated as “part of the annual budget process”, will be aimed at supporting investment in local projects, infrastructure and research to support “long-term sustainability”.

The Australian understands this could include targeted funding for mental health services, schools and irrigation projects.

Mr Morrison, who will attend today’s summit alongside ­Nationals leader Michael McCormack and special drought envoy Barnaby Joyce, said visits to drought-affected areas had shown him the “strength, resilience and hope” of families in country Australia.

“Our response to the drought has to be the same: deal with the here and now, but also make sure we plan for the future,” he said.

“That’s what the Future Drought Fund is all about. Putting money aside for non-rainy days in the future.”

The Prime Minister said the drought fund, the first of its kind in Australia, would be put towards “important water infrastructure and drought resilience projects”. Mr Morrison said part of the earnings from the fund would go towards priority infrastructure projects, with the balance “ploughed back into the fund so it grows to $5bn over the next decade”.

“This funding will support farmers and their local communities when it’s not raining,” he said. “It guarantees drought support for the men and women who drive our nation. The challenges of drought vary from farm to farm, district to district, town to town and we continually need to adapt and build capacity — the Future Drought Fund gives us this opportunity.”

The government said criteria for funding were yet to be determined but would aim to support community services, research and new technology.

The Rudd government established the Building Australia Fund at the start of 2009 to help build transport infrastructure as well as communications, ­energy and water projects.

Today’s summit will include premiers and chief ministers, representatives from the finance sector, regional mayors, peak agri­cultural bodies and senior ­bureaucrats.

Drought Taskforce co-ordinator-general Stephen Day, ­Agriculture Minister David Littleproud, Regional Services Minister Bridget McKenzie and opposition agriculture spokesman Joel Fitzgibbon will also ­attend. National Farmers Federation president Fiona Simson, who will attend the summit, said yesterday: “We can’t afford to continue to be reactive in responding to drought.”

Mr Morrison will outline initiatives as part of the government’s “three-phase response” to ­current and future drought challenges, focusing on relief, recovery and long-term resilience.

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