Federal Government rolls out next phase of drought help

Drought-assistance measures to be announced by Prime Minister Scott Morrison today include help for ag-reliant small businesses and better terms on concessional loans to farmers.

Help needed: Prime Minister Scott Morrison during a visit to drought-affected Briagolong, Gippsland, in February. It’s expected he will announce new drought-assistance measures today. Picture: Ian Currie

SMALL businesses reliant on agriculture will be given access to low interest loans among a suite of new drought assistance measures to be announced by Prime Minister Scott Morrison today.

Funding to support local councils and rural roads projects is also expected to be announced following a Cabinet decision yesterday to step up assistance ahead of another summer with below-average rain forecast.

A request by the National Farmers’ Federation for the Government to provide exit payments to help unviable farmers leave the land will not be part of this new package.

NFF has not seen the specifics of the new drought measures and is reserving any comment until the full details are released.

Last month NFF proposed six emergency drought measures to the Government to help deal with current drought crisis in addition to longer-term drought preparedness measures it has asked the Government to consider.

It’s believed the Government’s announcement today will acknowledge the essential role farm-dependent small businesses play in rural communities and the effect the drought is having on them, recognising the impact drought has on turnover for businesses such as shearing and harvesting contractors, livestock transporters, stock and station agents and agricultural machinery dealerships.

Mr Morrison is expected to announce concessional loans of up to $500,000 will be made available now to small businesses dependent on agriculture with a two-year interest-free period, followed by interest-only payments for years three-five, and interest and principal for years six-10.

New two-year interest-free terms will also be announced for a special drought loans made available through the Regional Investment Corporation.

Following the interest-free period, interest-only terms kick in for years three to five and interest and principal for years six to ten.

The current repayment structure is first five years interest only and principal and interest for the remainder of the 10-year term.

Existing drought community programs will be expanded to more local government areas and more money available to those already receiving support for projects such as local infrastructure and drought relief activities with social support.

A new $50 million discretionary fund will be established to support additional councils when needed.

The PM said $200 million in infrastructure funding will be redirected to special drought projects in regional areas and supplementary payments will be made to 128 local government areas for road upgrades and maintenance.

It’s understood none of the new measures require legislative amendments and can be made available immediately.

MORE: PAY TO WALK AWAY AMONG RAFT OF NFF DROUGHT PROPOSALS

Mr Morrison said the Government would continue to provide support as the drought rolled on.

“We have been back on the ground listening to farmers and their communities, and this package is a direct response to their feedback,” Mr Morrison said.

“We also know the drought has been tough on small businesses that rely on agriculture.

“Rural communities can’t function without these small businesses. That’s why we are stepping in to provide this extra support.

“The Government already provides concessional loans to farmers, but now we’re improving the terms. Interest-free loans will make it cheaper for farmers to buy fodder, transport stock, build water infrastructure, agist cattle, mend fences or refinance existing debt.”