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Supporting farmers and rural communities

​Department of Agriculture and Water Resources, November 2016

This fact sheet encourages Australian farmers experience drought and other financial hardship to seek expert advice rather than self-assess their individual situation, and outlines the Australian Government assistance available to farmers and rural communities.

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The Australian Government supports farmers to manage their business risks and to prepare for, manage through and recover from drought and other hardship.

Key points

  • Support measures are in place to help farmers manage their business risks, including drought—as well as support to help farmers meet their basic household expenses when times are tough.
  • Farmers are encouraged not to self-assess their individual situation, but to seek advice from an expert.
  • In addition to Australian Government assistance, there may also be state or territory government assistance available. Further information is available from your state or territory government.​

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Farm Business Concessional Loans Scheme

The government is providing up to $250 million through the Farm Business Concessional Loans Scheme in 2016–17. The scheme provides Drought Assistance Concessional Loans and Dairy Recovery Concessional Loans, with applications open to 30 June 2017. Loans are available to a maximum of $1 million in total. Loans are for a maximum term of ten years, with interest only repayments for the first five years and principal and interest repayments for years six to ten. Further information on both these schemes can be found at Farm Business Concessional Loans Scheme.

Farm Household Allowance

Farm Household Allowance (FHA) provides up to three years of income support for eligible farmers and their partners experiencing financial hardship. The allowance is equivalent to the Newstart Allowance and is designed to help recipients meet basic household needs. The programme is uncapped and demand-driven, so no one who is eligible will miss out. There is a net farm asset limit of $2.55 million so payments reach those most in need and increased support is available for farmers accessing a third (and final) year of the FHA. For more information visit Farm Household Allowance or call the Farmer Assistance Hotline on 132 316.

Managing Farm Risk Programme

The Managing Farm Risk Programme encourages farm businesses to consider insurance options to cover against drought and other production risks. The programme provides one-off rebates for advice and assessments to help farmers prepare and apply for a new insurance policy. Rebates will be for half of the costs incurred by eligible farm businesses up to $2 500 (GST exclusive). Further information can be found at Managing Farm Risk Programme.

Managing weeds and pest animals

The Australian Government is providing $25.8 million over four years to help manage the effects of pest animals and weeds in drought-affected areas. The funding supports projects to:

  • lessen the impact of pest species, such as foxes and wild dogs
  • manage existing weed incursions
  • reduce the risk of future invasions
  • improve groundcover, water quality and critical stock forage.

Rural Financial Counselling Service

The Rural Financial Counselling Service (RFCS) provides free financial counselling to farmers, fishers, forest growers and harvesters and small related businesses who are suffering financial hardship and have no alternative sources of impartial support. For more information on the RFCS programme, call 1800 686 175 or visit Rural Financial Counselling Service.

Drought Communities Programme

The Australian Government is investing $35 million over four years in local infrastructure projects in targeted drought-affected local government areas to provide employment options for people whose work opportunities have been reduced by drought. These projects aim to stimulate local community spending, use local resources, and provide long-lasting benefits to communities and agricultural industries. This programme is being run by the Department of Infrastructure and Regional Development. More information is available at Drought Communities Programme.

Taxation measures

Accelerated depreciation to encourage investment in drought preparedness

Accelerated depreciation arrangements for new water and fodder infrastructure and fencing are available to help farmers prepare for drought, assist with their cash flow and encourage on-farm investment. These measures include:

  • depreciation of water facilities over 1 year (previously 3 years)
  • depreciation of fodder infrastructure storage over 3 years (previously up to 50 years)
  • depreciation of fencing over 1 year (previously up to 30 years).

Farm Management Deposits Scheme

The Farm Management Deposits (FMD) Scheme allows eligible primary producers to set aside pre-tax income from primary production in years of high income, which can be drawn on in years of low income.

Primary producers can:

  • deposit up to $800 000 in FMDs
  • access their FMD early without losing their claimed taxation concessions if they are affected by drought
  • offset the interest costs on primary production business debt (subject to banks offering FMD loan offset accounts).

Income tax averaging

Income tax averaging enables farmers to even out their high and low income years and the tax payable over a maximum of five years, ensuring that they do not pay more tax over a number of years than taxpayers on comparable but steady incomes.

Recognising that business circumstances change over time, farmers will be able to resume income tax averaging 10 years after they opted out. For example, farmers who opted out of income tax averaging in 2006–07 can resume income tax averaging for the 2017–18 financial year if their 2017–18 taxable primary production income is greater than the previous year.

Australian Taxation Office advice

Drought-affected taxpayers who need support with tax debts can ring 131 142 to talk about options to help manage their tax obligations. For more information visit Assistance for drought-affected taxpayers.

Further information

  • Assistance measures
  • Farmer Assistance Hotline
    (information on FHA from the
    Department of Human Services)
    — 132 316
  • ATO Drought Tax Hotline — 131 142
    (select Option 3)
  • RFCS advice and assistance —
    1800 686 175