Australian Prime Minister Scott Morrison has announced the details of a new drought stimulus package worth around one billion Australian dollars (US$690 million) centred on zero-interest loans for farmers and small businesses.
“This gives them massive breathing space,” he told reporters in Canberra on Thursday.
The federal government is also releasing 100 gigalitres of water along the Murray River, which will be made available to farmers at discounted rates to grow fodder.
The water is expected to grow up to 120,000 tonnes of fodder for breeding stock in desperate need.
“This is a practical measure which both deals with the hardship along the Murray, but importantly, deals with making available more fodder,” Morrison said.
The Commonwealth will help South Australia turn on a desalination plant in return for the additional flows.
The deal will cost the federal government almost A$100 million and will be reviewed in April next year.
Up to 6000 farmers are expected to access the water originally destined for Adelaide, and it must be used to grow fodder.
Each of the 122 drought-affected councils and shires along the east coast will be given an extra A$1 million if they need it.
At least six new shires and councils will also be offered A$1 million.
A new program will allow small businesses dependent on agriculture to apply for loans of up to A$500,000 that can be used to pay staff, buy equipment and refinance.
There will be A$10 million for schools facing hardship as a result of the ongoing drought, including fee concessions for boarding students.
Another A$5 million will help assist childcare centres experiencing decreased demand.
The government will redirect A$200 million from the Building Better Regions Fund to support drought-stricken communities, and pump an extra A$138.9 million into road projects.
The prime minister has rejected calls from the National Farmers’ Federation to offer exit packages to farmers who want to leave the land, arguing the value of properties has held up strongly over the past five years.
“We’re here to keep farmers on their properties,” Morrison said.
NFF president Fiona Simson said the government had shown it had listened by addressing some of her organisation’s recommendations.
But it was vital that the benefits of the package 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,” she said.
She said other levels of government could help by cutting payroll tax and local government rates, which were “one of the biggest drains on the farm business balance sheet.”
What’s in the Government’s New Drought Plan?
- Small business drought loans of up to A$500,000 for wages, equipment and to refinance.
- Farm drought loans which are interest free for the first two years, before being an interest only payment from years three to five. Repayments from years six to 10 are interest and principal.
- A$10 million for schools in drought-ravaged areas to help with financial hardship, including fee-assistance
- A$5 million towards child care centres struggling because families are unable to afford child care.
- Expanded drought communities program, adding six more council areas, providing A$122 million for local infrastructure and other drought-relief activities.
- New A$50 million discretionary fund to support additional councils when needed.
- Redirecting A$200 million from the Building Better Regions Fund to create a special drought round providing up to $10 million per project.
- Roads to Recovery supplementary payment for 128 local government areas in drought (up to A$138.9 million) for upgrades and maintenance of roads ready to roll out.
- Releasing up to 100 gigalitres down the Murray River to the southern basin by April 30, to grow up to 120,000 tonnes of fodder as well as silage and pasture.
- The federal government will help South Australia turn on a desalination plant in return for a cost of A$88 million, including $10 million for drought measures.
- The government is yet to determine the fine print for the new non-transferable water permits, but expects about 4000 to 6000 farmers to put their hand up for one.