Supporting farmers and rural communities

​​​​Department of Agriculture and Water Resources, August 2017

This fact sheet encourages Australian farmers experiencing 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.
  • The Regional Investment Corporation will deliver Commonwealth farm business loans and the National Water Infrastructure Loan Facility from July 2018.

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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 2017–18. The scheme provides Drought Assistance Concessional Loans, Dairy Recovery Concessional Loans and Business Improvement Concessional Loans, with applications open to 30 June 2018. 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 these schemes can be found at Farm Business Concessional Loans Scheme.

Farm Household Allowance

Farm Household Allowance (FHA) provides up to three cumulative years of support for eligible farmers and farmer’s partners experiencing financial hardship. The allowance is equivalent to the Newstart Allowance and is designed to help recipients meet basic household needs. FHA provides recipients the opportunity to take steps to improve their circumstances and self-reliance through a Farm Financial Assessment, Financial Improvement Agreement and additional activity supplements of up to $4,000. 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. 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 $2500 (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. There are currently approximately 130 rural financial counsellors across the country. For more information on the RFCS programme, call 1800 686 175 or visit Rural Financial Counselling Service.

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 future years.

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.

Regional Investment Corporation

The Regional Investment Corporation (RIC) will deliver $2 billion in Commonwealth farm business concessional loans and the $2 billion National Water Infrastructure Loan Facility.

The RIC will be operational by July 2018.

RIC farm business loans will support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets they supply, so they can take advantage of new and emerging opportunities across Australia and overseas.

The RIC will also provide concessional loans to help farm businesses prepare for, manage through and recover from periods of drought.

Once the RIC is operational, it will also deliver the National Water Infrastructure Loan Facility which provides concessional loans to the states and territories to help fast-track the construction of dams and priority water infrastructure projects.

Further information can be found at Regional Investment Corporation.

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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