Belinda Jones reveals the economic mismanagement behind the Coalition's promised $7 billion drought funding.
AUSTRALIA IS BATTLING through one of the worst droughts in living memory. Barren paddocks have become dustbowls, breeding stocks are dwindling and farming communities are crying out for help. So, what exactly is the Morrison Government doing with drought funding?
Prime Minister Scott Morrison pledged after the May election to make the drought his top priority. Morrison and a coterie of his ministers have been conducting “listening tours” and photo opportunities in some of the worst drought-affected regions in recent weeks.
Shock jock Alan Jones even made an impassioned plea directly to the Prime Minister, live on air, to do more to help our struggling rural communities and farmers. In response, the Prime Minster doubled down on previously announced funding arrangements — Morrison did not make any new announcements of further drought spending. Jones’s pleas fell on deaf ears. This begs the question: why isn’t the Morrison Government doing more? And where has $7 billion gone?
The Morrison Government’s $7 billion in drought funding appears to be drying up quicker than Broken Hill’s water supply. Where has it all gone?
Let’s break it down.
The total $7 billion National Drought Strategy encompasses a range of drought relief strategies and is primarily made up of two main parts: the $5 billion Future Drought Fund plus a further $2 billion.
On 24 July 2019, the Federal Parliament passed legislation to establish the Future Drought Fund:
‘The balance of the Building Australia Fund Special Account is transferred to the Future Drought Fund Special Account.’
With an initial investment of $3.9 billion, the Future Drought Fund is expected to grow to $5 billion by 2028-29, giving the Federal Government the ability to draw down $100 million per year for drought assistance.
Almost immediately, as if a decade had already passed, Morrison and Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management David Littleproud began referring to the Future Drought Fund in terms of it already being $5 billion.
Both the Prime Minister and Minister Littleproud quickly began referring to a $7 billion National Drought Strategy, saying that $5 billion of that was the Future Drought Fund, even though those unavailable funds won’t reach the magic $5 billion until 2028-29.
The Prime Minister and his ministers soon set about spending the remaining $2 billion of the National Drought Strategy funding.
Throughout 2019, Morrison announced a range of water infrastructure projects and commitments totalling almost $1.5 billion to ‘fast track water infrastructure construction in partnership with state and territory governments’, yet very few of these projects are shovel ready; some are years away from commencing.
The balance of the original $7 billion in the National Drought Strategy was then reduced to $507,869,760.
Each “listening tour” and photo opportunity brought yet more announcements that dipped further into the remaining funds.
The Drought Communities Programme Extension promised $123 million to councils, predominantly in Federal Coalition-held seats, bringing the balance of the National Drought Strategy down to $384,869,760.
Early in October, the Prime Minister attended the Burnie Show in Tasmania with Minister for Agriculture Senator Bridget McKenzie, announcing a further $20 million in funding for rural shows, reducing the remaining National Drought Strategy funding to $364,869,760.
Treasurer Josh Frydenberg, Minister Littleproud and MP for New England Barnaby Joyce conducted a “listening tour” of drought-affected areas in NSW and Queensland in early October to discuss the Government’s drought strategy, including the Farm Household Allowance.
According to a September article from ABC Rural News:
‘If all those who are eligible were to take up the payment, it could cost taxpayers about $1.5 billion per decade.’
Averaging the Farm Household Allowance out to $150 million per year, this reduces the current National Drought Strategy funding total to $214,869,760.
ABC Rural also reported, ‘there are cheap loans available for the drought-affected, and in the 14 months to August this year the Government had provided 211 loans to the value of $200 million’, reducing the National Drought Strategy funding to $14,869,760.
Minister Littleproud spoke at length on his “listening tour” about the $77 million Rural Financial Counselling Service program, the cost of this program taking the National Drought Strategy into negative territory — $-62,130,240.
On his return from a state visit to the USA, the Prime Minister visited Dalby, Queensland, where he announced that the mothballed $33 million Drought Community Support Initiative would recommence, ratcheting the National Drought Strategy balance down to $-95,130,240.
Morrison, giving the first indication that the federal drought funding had dried up, explained that of the $100 million in funding he announced that day, only $40 million would be rolled out this financial year. The remaining $60 million will become available in the 2020-21 fiscal year, effectively robbing Peter to pay Paul by dipping into the yearly $100 million in interest from the Future Drought Fund.
Despite the National Drought Strategy being in the red by early October 2019, Morrison and his ministers continued to announce more drought assistance in the form of mental health support services, $7 million in support for businesses in drought-affected regions and the $2.7 million Regional Weather and Climate Guides project. Clearly, Morrison had abandoned the mantra he espoused as Treasurer in 2018 of “the Government living within its means”.
Minister Littleproud reiterated the same pleas for assistance from state governments he made on his “listening tour” at the Despatch Box in the House of Representatives on October 15, 2019.
Minister Littleproud explained to the Parliament that states are broadly responsible for helping farmers with animal welfare, freight and fodder, while it is the Federal Government’s responsibility to ‘look after farmer welfare’.
The Drought Minister explained to the House the escalating need to step up the drought response — an indication to astute observers that, despite the broad-ranging National Drought Strategy, the Federal Government needed help.
Minister Littleproud accused the states of not pulling their weight in relation to drought relief on ABC’s Insiders, when, in fact, the worst drought-affected states were matching or exceeding the Federal Government’s financial handouts and meeting their commitments.
As the drought continues to worsen, it has become clear that the Federal Government’s National Drought Strategy has depleted all available funding, with the lion’s share of that funding going to future drought-proofing water infrastructure. Emotional pleas from Alan Jones and ministers have not convinced the Prime Minister to open up any further avenues of financial funding for drought relief.
The National Drought Strategy has exceeded the Federal Government’s means, going into the red; funding for councils appears to have been pork-barrelled into Coalition seats and there appears to have been an over-commitment on future drought-proofing water infrastructure projects, while farmers are in dire straits just trying to survive the current drought.
Labor’s Shadow Minister for Agriculture and Resources, MP for Hunter, Joel Fitzgibbon wrote to the Auditor-General on 1 October 2019 to request an examination of the Morrison Government’s handling of the National Drought Strategy funding and the ‘inexplicable claim the Government has committed $7 billion in “drought support funding”’. Mr Fitzgibbon has not indicated whether the Auditor-General has responded yet.
Meanwhile, the drought worsens while the dams, rivers – and now the funding, too – has dried up.
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