PM in Gippsland
PM in Gippsland

PM’s next move against drought scourge

BIG-spending, practical infrastructure projects that lure workers to town - and spark them to open their wallets - will be thrashed out in a crucial meeting today as the Federal Government moves to unveil its next drought package.

The Government's expenditure review committee will thrash out a number of drought proposals in Sydney today, but any major announcement is not expected to be detailed until next week. 

It is understood the submission to ERC contains a large number of drought proposals, some unlikely to have broad support by senior members of Cabinet.

More money is expected to be given to councils for projects that not only improve a town - like widening roads and putting down more bitumen, but also draws in cash from outside of the community, like workers drawn to the area for the project.

The Government views this as one way to encourage more money into communities that are languishing because of broke farmers.

The Courier-Mail exclusively revealed last week that Treasury had been asked to model a tax holiday/rebate for businesses that turn a profit, in a bid to help them keep on staff.

However there has been some internal resistance to the proposal, with some in Government fearing it would open them up to zonal taxation, a proposition some in the Nationals have been advocating for, but generally dismissed by Liberals.

It comes as Labor's agriculture spokesman Joel Fitzgibbon accused the Government of delaying decisions on more Farm Household Allowance payments to prop up its "trophy Budget surplus".

Drought Minister David Littleproud told the ABC's Q&A program on Monday night the Farm Household Allowance Bill, yet to be voted on in the Senate, allowed for supplementary payments once recipients had reached the time threshold of four years.

"They will still get a supplementary payment," Mr Littleproud said.

"We will continue to make the supplementary payments up until June next year, and in May we'll have to make another decision if it hasn't rained."

Agriculture Minister Bridget McKenzie initially sold the lump sum payments of up to $13,000 for those coming off the FHA as a one-off payment, saying it would not be indefinite.

While the draft legislation allows the Government to grant further lump sum payments to farmers who come off the FHA, it has failed to sell that message.

A spokesman for Mr Littleproud told The Courier-Mail yesterday the Government would adjust its policies as required.

"In the current legislation, there is a clear rule in place for the Minister to deliver further lump-sum payments if there is a need," he said.