Kedicioglu and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 475

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 475

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0444

GENERAL ADMINISTRATIVE DIVISION		)
Re		MUSLUM KEDICIOGLU

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr S E Frost, Member

Date6 June 2008

PlaceSydney

Decision The decision under review is affirmed.

...............[SGD]....................

Mr S E Frost
  Member

CATCHWORDS

FARM HOUSEHOLD SUPPORT - exceptional circumstances relief payment - Applicant a "farmer" as defined - requirement on the Applicant to contribute a significant part of his labour and capital to the farm enterprise - further requirement that he derive a significant part of his income from the farm enterprise - policy underlying the payment - decision under review affirmed

Farm Household Support Act 1992 - section 8A

REASONS FOR DECISION

6 June 2008 Mr S E Frost, Member        

Introduction

1.      On 9 August 2007 the applicant made a claim for exceptional circumstances relief payment in relation to his olive farm in northern New South Wales.  Centrelink rejected the claim.

2.      The applicant sought a review of that decision by an Authorised Review Officer (ARO) but the original decision was affirmed.  The applicant appealed to the Social Security Appeals Tribunal (SSAT) and on 14 January 2008 the original decision was once again affirmed.  The applicant then applied to this Tribunal for review of the decision.

Issues

3. The issues for determination arise under section 8A of the Farm Household Support Act 1992 (the Act).  They are whether the applicant:

·contributes a significant part of his labour and capital to the farm enterprise; and

·derives a significant part of his income from the farm enterprise.

4.      Those are the questions that arise in terms of paragraphs (b)(i)(B) and (b)(i)(C) of subsection 8A(1) of the Act.

5.      At the hearing today the applicant was assisted by an interpreter in the Turkish language.

The facts

6.      The facts are not in dispute.

7.      The applicant is a bus driver in Sydney.  He has been driving buses for the State Transit Authority since about 1984.

8.      In 2002 he bought a block of land outside Tenterfield in New South Wales for the purpose of establishing an olive farm.  Much of the work that has been undertaken on the farm since 2002 has been undertaken by one of the applicant's neighbours under a management contract that was entered into at around the time the land was purchased.  The applicant lives in Sydney but he has visited the farm on several occasions since its purchase.  The SSAT understood that he had visited the farm about 20 times since 2002, but he said in the hearing before this Tribunal that he has visited the farm more frequently than that.  I accept what he says, although I am not in a position to make a finding as to how many times he has visited the farm during that period.  Nevertheless, for reasons which will become clear, nothing turns on that.

9.      The applicant has spent about $36,000 on the farm since 2002.  There are various documents before me which indicate that he has undertaken significant expenditure on things like irrigation, fertilising, slashing of grass, the planting of olive trees, and fencing.

10.     The issues set out in paragraph 3 of these reasons are not the only criteria that the applicant needs to satisfy in order to qualify for the exceptional circumstances relief payment.  He must also be a farmer (as defined in section 3 of the Act), he must be an Australian resident, and he must be in Australia.  The Secretary accepts that he satisfies each of those three requirements, and so do I.

11.     The only criteria that are in dispute are those set out in paragraph 3 of these reasons. 

The applicant’s arguments

12.     The applicant's fundamental proposition is that this proposed development of an olive farm will eventually be of significant benefit to Australia.  He has plans to plant something like 20,000 olive trees on his landholding.  If it is a successful venture, then it can be expected that the applicant will derive significant income from it, which of course will lead to the payment of tax on that income.  It is not hard to imagine that a successful olive farming venture will provide other benefits to the community, through potential employment opportunities, opportunities for suppliers to the enterprise (transport, property maintenance, equipment supply and repair and so on) and otherwise.  In the applicant’s view, the potential for his eventual contribution to the community in this way should be recognised by way of government assistance, at a time when drought is affecting the Tenterfield area and jeopardising the future of his farm enterprise.

13.     This is especially the case, in his view, because the expenditure that he is incurring at the moment does not entitle him to a tax deduction.  While the farming activity is run at a loss, he accepts – on the basis of the advice of his accountant – that tax deductions are not available, but also acknowledges that when he starts to generate income he will have to pay tax on that income.  In that circumstance, he says, he should receive some assistance.

The policy underlying the exceptional circumstances relief payment

14.     It is clear that the exceptional circumstances relief payment has been designed to assist those whose farming activities are affected by drought.  But it is more targeted than that.  The requirements that a farmer be contributing a “significant” part of his labour and capital to the farm enterprise, and deriving a “significant” part of his income from the farm enterprise, indicate that the Parliament has decided that not all farmers should receive this type of assistance.  It is only those whose involvement in the farming activity is "significant" that the Parliament has decided should warrant assistance.

15.     The appropriateness of a restriction of that kind is a question that does not, and cannot, affect the thinking of a decision maker such as the Secretary or, on review, this Tribunal.  Instead, when a claimant, such as the applicant here, thinks that the law is not targeted correctly, that matter should be taken up through other channels, such as the person's local Member of Parliament.  Only the Parliament can change the law.  The Secretary’s responsibility, and the responsibility of the Tribunal, is to make decisions on the basis of the law as it has been made.

16.     I now turn to the issues raised by this application.

Significant part of labour and capital

17.     In evidence before me at pages 169 to 188 of the T documents is a publication titled "Information Handbook – Exceptional Circumstances Assistance".  That document is described at page 171 as a handbook that seeks to "explain the operation of the exceptional circumstances arrangements to rural industries and communities".  The document appears to have been published by the Commonwealth Department of Agriculture, Fisheries and Forestry, but I take it that the handbook sets out the policy which still guides the administration of the exceptional circumstances relief payment.

18.     At page 183 (page 15 of the handbook) appears the following:

Farmers must demonstrate that under normal circumstances they contribute at least 75% of their labour to the farm enterprise …

19.     I do not consider that I am bound by that policy, but I recognise that the use in the Act of the word "significant" as the qualifier, for the part of a person's labour and capital that must be contributed by a successful claimant, indicates that a very large portion of the person's labour and capital must be contributed.  Whether in a particular case something less than 75% would be sufficient is a question that I do not have to determine.

20.     One problem for the applicant in relation to this particular criterion is that, as a full-time bus driver in Sydney, he cannot possibly contribute the requisite "significant" part of his labour to the farm enterprise in Tenterfield.  I do accept that he has contributed a good deal of labour – both physical and mental – to the development of the farm, but given his occupation of a full-time salaried position with the State Transit Authority in Sydney, he must, on any measure, fall short of the requirement that he contribute a "significant" part of his labour to the farm enterprise.

21.     In addition, while I can readily find that the applicant has contributed $36,000 towards the farm enterprise, I have no way of establishing whether that is a “significant” part of his capital.  In any event, because of what I have found to be the case in relation to his contribution of labour, the applicant fails the requirement in paragraph (b)(i)B) of subsection 8A(1) of the Act.

Significant part of income

22.     The applicant has two sources of income.  The major one is his job as a full-time bus driver in Sydney, from which in the 2006 financial year he earned something over $60,000.  The second source of income is a rental property that he owns with his wife in Sydney (although in the 2006 year he incurred a loss from that activity).

23.     However, the olive farm is not itself a source of income.  That is quite understandable.  The applicant explained that the farm is in its development phase and is not likely to become income producing for at least a few more years.  Of course, the result is that, not only does he not derive a significant part of his income from the farm enterprise, he does not at this stage derive any part of his income from the enterprise.  He may one day derive income from the enterprise, but that possibility does not assist him.  Paragraph (b)(i)(C) of subsection 8A(1) of the Act is not satisfied.

Conclusion

24.     It follows that the applicant is not entitled to an exceptional circumstances relief payment.  The decision under review is affirmed.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S E Frost, Member

Signed:         .....................................................................................
  Associate

Date of Hearing  6 June 2008
Date of Decision  6 June 2008
Counsel for the Applicant         Self-represented   
Solicitor for the Respondent     Ms Phyllis Lee, Centrelink Legal Services Officer