What's Frydenberg's end goal this drought?

Drought support - the dry argument that needs answers fast

Opinion
Federal Treasurer Josh Frydenberg on last week's drought tour.

Federal Treasurer Josh Frydenberg on last week's drought tour.

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The federal government needs to step up its drought support, for the sake of rural communities.

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With no sign, still, of a decent break, even those farmers who have significantly adapted their business and management structures can only go so far.

Spending has been cut further and further and is having a compounding effect on communities.

As one person said: "It makes a massive difference to small communities, you take one family out of a small town and the knock-on effects for the schools, grocery shops etcetera, are huge".

It's also frustrating that in our larger cities, the consequences are barley acknowledged.

It was therefore interesting to see this week a statement released by Regional Development Australia, Northern Inland, that attempts a different way of making this issue relateable.

RDA uses a program which it says it usually would use to measure positive effects of proposed investments.

However, in this case, it has used it to simulate the negative effects of the drought and has applied that to scale across Sydney.

The RDA said in its Northern Inland region, 4178 jobs (5.8pc of its workforce) had been lost, which when scaled up for Sydney equated to 130,000 job losses.

We also saw signs this week that political leaders are beginning to grasp the escalating scale of this issue.

Agriculture Minister David Littleproud said he had asked the state governments to consider covering local government rates for small business and farmers.

"They could look at payroll tax too because businesses are hurting," he said.

In that report, Treasurer Josh Frydenburg (pictured left) said "this is the community's GFC (global financial crisis)".

As people call for immediate support, a range of things have been asked for - a cash injection, subsidies, tax cuts, rate cuts - so where does the government start?

A few points should probably be considered.

  • Will that money be recycled through the local economy, at least initially, and contribute to local cash flow?
  • Will it help position farms and rural businesses to quickly recover profitability when the season breaks?
  • Will the measure cost us, or make us more than the initial spend in the long run?

It's a tough commitment for a government that knows as much about when the drought might end as farmers, but its a commitment it needs to make.

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