EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Agriculture, Fisheries and Forestry

FARM HELP RE-ESTABLISHMENT GRANT SCHEME AMENDMENT 2007 (No.1)

----------------------------------------

Subsection 52A (1) of the Farm Household Support Act 1992 provides that the Minister may, by written instrument, formulate a scheme to be called the Farm Help Re-establishment Grant Scheme, to grant financial assistance to eligible farmers on the sale of their farm enterprises, or their rights or interests in farm enterprises.  Such a grant is called a re-establishment grant.

This scheme is related to the scheme formulated under section 52A (1) of the Farm Household Support Act 1992 (the Farm Help Re-establishment Grant Scheme). A person who applies for a benefit under the Farm Help Re-establishment Grant Scheme is required to obtain advice under the Farm Help Advice and Training Scheme and will be granted assistance to obtain that advice. The person is required to undertake a financial assessment and develop a pathways plan before qualifying and being eligible to claim a re‑establishment grant.

----------------------------------------

The Farm Help programme was provided with an additional $92.3 million over the next four years in the 2007 Budget.  Amendments to the Farm Household Support Regulations 1993, the Farm Help Advice and Training Scheme 1997 and the Farm Help Re-establishment Grant Scheme 1997 will improve access to the programme by allowing previous Farm Help recipients a second chance to obtain professional advice and training and to access an increased re-establishment grant of $75,000.

The proposed enhancements have emanated from the on‑going monitoring of the programme’s performance and a mid-term review of Farm Help conducted in 2006.

Applications for dairy-type grants under the Farm Help Re-establishment Grant Scheme were intended to be closed from 30 June 2007, in line with the Dairy Industry Adjustment Package ceasing by 30 June 2008.  The amendments to the Farm Help Re-establishment Grant Scheme ensure dairy farmers will have access to a re-establishment grant under this Scheme after dairy-type grants cease.  The amendments also prevent the difference between the two exit programmes as dairy-type grants offered a $50,000 exit payment to dairy farmers compared to the $75,000 re-establishment grant.

Farm Help Re-establishment Grant Scheme Amendment 2007 (No.1)

Section 1 Name of Scheme

This Section states that the instrument is called the Farm Help Re-establishment Grant Scheme Amendment 2007 (No.1).

Section 2 Commencement

This Section provides for the instrument to commence on 1 July 2007.

Section 3 Amendment of Farm Help Re-establishment Grant Scheme 1997

This Section provides that Schedule 1 amends the Farm Help Re-establishment Grant Scheme 1997.

Schedule 1 Amendments

[1] Section 1.3, after definition of Act

This item inserts reference to a dairy-type grant and refers to the meaning of a grant designated as such under subsection 3.2AA (1) immediately before the repeal of that subsection on 1 July 2007.

[2] Section 1.3, after definition of farm owner or operator

This item inserts reference to Farm Help income support and refers to the meaning of Farm Help income support under Division 1B of Part 2 of the Farm Household Support Act 1992.

[3] Section 1.3, after definition of Industry services body

This item inserts reference to a re-entry client and refers to the meaning of a re-entry client given by section 2.3A of the Farm Help Advice and Training Scheme 1997.

[4] Section 1.3, note

This item omits the reference to dairy-type grant.

[5] Section 1.3, note

This item inserts ‘re-establishment grant’ allowing reference to the definition found in section 3 of the Farm Household Support Act 1992.

[6] Section 2.1, heading

This item changes the heading from ‘Who may apply for a grant’ to ‘Eligibility to apply – persons other than re-entry clients’.

[7] Subsection 2.1 (1)

This item amends subsection 2.1 (1) to provide eligibility requirements for persons other than re-entry clients.

[8] Subsection 2.1 (2)

This item omits mention of ‘under Division 1B of Part 2 of the Act’ due to definition mentioned in section 1.3.

[9] Subsection 2.1 (4)

This item amends the subsection to reflect the requirement that the person must have owned the farm enterprise (other than as a sharefarmer or leaseholder) for a continuous period of at least 5 years immediately before the person applies for a re-establishment grant.

[10] Subsection 2.1 (5)

This item omits ‘$50,000’ and inserts ‘$75,000’ to reflect the requirement that during the time the person was a farmer in relation to the farm enterprise they contributed capital to the value of $75,000 or more to the enterprise.

[11] After section 2.1

2.1AA Eligibility to apply – re-entry client

This item inserts a section to refer to re-entry clients and the requirements they must satisfy to be eligible to apply for a re‑establishment grant.

[12] After subsection 2.1A (3), at the foot

This item notes that a sharefarmer or a leaseholder is not eligible to apply for a re‑establishment grant with reference to subsection 2.1 (4).

[13] Section 2.2

This item reflects the day specified in the Farm Household Support Regulations 1993 that an application for a re-establishment grant cannot be made after 30 June 2019.  A note is included stating that no applications for a dairy-type grant can be made after 30 June 2007 as dairy-type grants ceased to exist from July 2007.

[14] Paragraph 3.1 (2) (d)

This item has been amended to remove the reference to section 3.2AA which no longer exists.

[15] Paragraph 3.2 (1) (baa)

This item omits ’30 June 2008’ and inserts ’30 June 2020’ to reflect the day specified in the Farm Household Support Regulations 1993.

[16] Paragraph 3.2 (1) (da)

This item has been amended to reflect that persons applying for a re-establishment grant give a written acknowledgement not to return to farming as an owner, operator or leaseholder within 10 years after the date of the acknowledgement.

[17] Paragraph 3.2 (1) (f)

This item omits ‘$175,000’ and inserts ‘$262,500’ to reflect the maximum net asset level for accessing the grant.

[18] Subparagraphs 3.2 (1) (g) (iv) and (v)

This item allows dairy farmers that have received a payment right under either the Dairy Structural Adjustment Program Scheme 2000 or the Supplementary Dairy Assistance Scheme 2001 access to apply for a Farm Help re-establishment grant as dairy-type grants have ceased to exist.  The insertion of ‘a dairy-type grant’ prevents a person that has received a dairy-type grant from applying for a re‑establishment grant.

[19] Section 3.2AA

This item removes section 3.2AA as dairy-type grants are no longer available.

[20] Section 3.3

This item omits ’30 September 2008’ and inserts ’30 September 2020’ to reflect the new day by which a person who is qualified to receive a re-establishment grant must submit a claim to be paid the grant.

[21] Section 3.5

This item has been amended to set out how the amount payable as a re-establishment grant is worked out.  The section reflects the re-establishment grant increase to $75,000 and provides that until 28 September 2009, 10 years after the date of entitlement, any payments received under the Dairy Structural Adjustment Program Scheme 2000 or the Supplementary Dairy Assistance Scheme 2001 will be deducted.

[22] Section 3.6

This item has been amended to calculate the amount of re-establishment grant payable.  Section 3.6 allows that between 1 July 2007 to 28 September 2009 the formula used to calculate the amount of re-establishment grant incorporate and deduct any payments received by dairy farmers under the Dairy Structural Adjustment Program Scheme 2000 or the Supplementary Dairy Assistance Scheme 2001.

Section 3.6A allows from 29 September 2009 the formula will no longer incorporate or deduct any payments received by dairy farmers under the Dairy Structural Adjustment Program Scheme 2000 or the Supplementary Dairy Assistance Scheme 2001 in the calculation.

[23] Subsection 3.9 (3)

This item has been amended to reflect that the amount paid as a re-establishment grant is forfeited if the person becomes a farm owner, operator or a leaseholder of land used for a farm enterprise within 10 years after the date of the acknowledgement.

[24] Paragraphs 3.9 (4) (a) and (b)

This item clarifies that where amounts are recoverable by the Commonwealth they will either be a debt to the Commonwealth or in the case of a dairy-type grant as a debt due to the industry services body.

[25] Section 4.2A

This item refers to the disclosure of dairy-type grant information and omits ‘who is an applicant for’ and inserts ‘who applied for’ a dairy-type grant as dairy-type grants have ceased to exist.

[26] Subparagraph 4.2A (c) (ii)

This item omits ‘the continuing operation of’ from the subparagraph as dairy-type grants have ceased to exist.

[27] Section 4.5

This item amends section 4.5 and introduces section 4.6 and 4.7.

Section 4.5 relates to transitional arrangements for a person who was eligible between 1 July 2004 and the 2005 commencement day and replaces ‘2005 commencement day’ with the known date of ‘25 March 2005’.

Section 4.6 relates to transitional arrangements for applications by sharefarmers and leaseholders who were accessing Farm Help assistance before 30 June 2007 and may apply for a re-establishment grant subject to eligibility requirements.

Section 4.7 relates to transitional arrangements for certain applications before 1 July 2008 where the person does not meet the 5-year farm ownership and/or the $75,000 capital contribution provision. A failure to meet these requirements will see the person assessed against the previous 2-year farm ownership and $50,000 capital contribution provisions.