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Prime Minister - Step up in drought budget support

  • Written by Scott Morrison

Drought-hit farmers, small businesses and rural towns are set for an immediate cash injection to keep stock fed and watered, keep businesses open, keep locals in work and pump funds into local economies.


The Prime Minister said the Coalition Government’s next step of measures to combat the drought’s impact was ready to flow.


“We are stepping up our drought response once again to meet the increasing needs as the drought’s effects also step up,” the Prime Minister said.


“Since the budget we have already committed an additional $355 million to step up our drought response. Today’s announcement triples this to more than $1 billion since the election, as well as more than $1 billion in new interest free loans, to see people through.


“This is money into the pockets of all those farmers and graziers who know they have a future, but are currently struggling to keep their operations running as the crippling effects of this drought continue to bite that we’ve heard from out on the ground. They are backing themselves and we are backing them to make it through to the better days that will be ahead.


“It’s not only farmers doing it tough in drought. Our next step in drought support also has an eye squarely on those communities feeling the strain as work dries up and spending in local stores slows down.


“There is no silver bullet to this drought. Each time we introduce further help we listen, we learn and we adjust our response because we know each community has different needs and priorities that need the resources and cooperation of every level of government.”


Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the Government’s latest initiatives would deliver an extra $709 million worth of direct support.  


“Communities across Australia are suffering the effects of the prolonged dry spell and today’s announcement is the next step in the measures to help ease the burden of the drought,” the Deputy Prime Minister said.


“This suite of measures go to the heart of what matters to these communities. From small businesses to primary producers, we are working with communities to take the pressure off one of the worst droughts in history.


“Not only is the Government continuing to respond as the drought progresses, but we are working on measures to assist in the recovery when the rains come, which includes the Government’s billion dollar investment in water infrastructure.


“By redirecting $200 million from the Building Better Regions Fund into drought communities and an extra $138.9 million into our Roads to Recovery initiative, we’re getting local projects and infrastructure work underway to keep finance flowing, trades in work and money rolling through local stores.”


Minister for Agriculture Bridget McKenzie said a new loans program for small businesses and making existing drought loans interest free for two years would deliver immediate support for everything from buying fodder to transporting stock and agisting cattle through to paying staff and purchasing new equipment. The Regional Investment Corporation’s mandate sets its interest rate just to cover administration and borrowing costs. 


“These loans mean farmers and small business owners can do what they need to, right now at zero cost,” Minister McKenzie said.


“Farmers will not have to pay a cent for the next two years and we’ll keep assessing the program if the drought runs longer than that to ensure repayments are affordable.


“With $200 million worth of loans committed already, we estimate the new small business program and the changes to the Drought Loans for farms will see around $1.2 billion issued over the next three years that they can put to their priorities.”


Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management David Littleproud said as the drought escalates, so does the government’s response.


“The package will boost local jobs and respond to individual community needs,” Minister Littleproud said.


“We’ve had strong demand on the Drought Communities Extension Programme and we’re extending it to six new areas.


“On top of the $1 million we’ve delivered to 122 councils we’ll make another $1 million available for those still in need. 


“We’ve also set up a $50 million fund for council projects in drought-hit communities for things like community hall renovations and playground upgrades.


“This will boost rural economies with more jobs and more business for regional suppliers like the local hardware store.”


Minister Littleproud said the Federal and South Australian Governments had also struck a deal to secure up to 100 gigalitres of water for farmers to grow fodder, silage and pasture at a discounted rate.


“100 gigalitres will produce up to 120,000 tonnes of feed for animals on farms in drought,” Minister Littleproud said.


“This will help farmers maintain their breeding stock during the drought so when it breaks farmers can recover faster.”


Minister Littleproud said the Government had also released the Drought Response, Resilience and Preparedness Plan.  The plan draws on the Drought Co-ordinator Major General Stephen Day’s report and the Government’s response, which was also released today. The Plan, Report and the Government’s response are available at


The Government will continue to listen to drought-affected Australia, respond and step up.


Further information on the support available for drought-affected farms and communities and how to access it is available at


Summary of Federal Government support


Existing support

New support

Looking after our farming families here and now

·         Simplified and expanded access to the Farm Household Allowance and extended it to a 4 in 10 year payment. Households are eligible for around $105,000 as well as an additional payment of $13,000 for couples

·         $3,000 cash payments for families under the Drought Communities Support Initiative

·         Built the National Drought Map so all data and support services are in one place

·         Invested $25 million to help our farmers combat pests and weeds; $2.7 million to improve regional weather and climate guides; and $77.2 million for Bureau of Meteorology radars

·         $2 billion available in concessional loans through the Regional Investment Corporation to help farmers and small businesses prepare for, manage through and recover from drought

·         $5 million for the Rural Financial Counselling Service

·         Making new and existing drought loans for farmers interest free for two years so they purchase fodder, pay for freight and pay their farm hands. Years three to five will be interest only payment and years six to 10 will be interest and principal. Current scheme is the first five years are interest only payments, and interest and principal payments for the balance of the loan term

·         A new program for small businesses dependent on agriculture with loans worth up to $500,000 that can be used to pay staff, buy equipment and refinance. It follows the same new payment scheme as the Drought Loans for farmers

·         $10 million to support schools facing financial hardship as a result of ongoing drought conditions, including fee concessions for boarding students

·         $5 million from the Community Child Care Fund will help assist centres that are experiencing decreased demand and financial pressure due to families from drought-affected areas being unable to pay for child care

Supporting jobs and investment in local communities

·         $1 million for 122 councils and shires in drought-affected areas to invest in projects that support jobs and business income

·         $30 million for targeted mental health support

·         $50 million funding for major charities to assist rural Australians in desperate need with up to $3,000 in individual support payments

·         An additional $1 million for each of the 122 drought-affected councils and shires if they need it

·         $1 million each for new drought-affected councils and shires including Greater Hume, Hilltops, Lockhart and Upper Lachlan in NSW, and Kangaroo Island and Tatiara in SA

·         $50 million discretionary fund to support projects in Local Government Areas impacted by the drought

·         Redirecting $200 million into a Building Better Regions Fund drought round to support new projects that deliver social and economic benefits to drought-affected communities

·         $138.9 million additional Roads to Recovery funding in calendar year 2020 for the 128 Local Government Areas eligible for the Drought Communities Programme Extension

Long term resilience

·         Future Drought Fund worth $5 billion to be a  sustainable source of funding to improve drought resilience and preparedness

·         $1.5 billion for 21 dams, irrigation projects and pipelines across Australia

·         100 gigalitres of water that will be used to grow up to 120,000 tonnes of fodder as well as silage and pasture to secure supplies for the months ahead.



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