Wednesday, December 20, 2006

How much longer can we keep handing farmers money?

Unless you are a farmer, the budget cupboard is bare.

That was the Treasurer’s message delivered to the nation and to his colleagues yesterday along with the mid-year economic and fiscal review.

That review forecasts of a budget surplus this and next financial year of a round 11 billion dollars – one per cent of GDP.

Asked how much of it could be carved off for election promises next year Peter Costello implied that the answer was none: “We have got a surplus of one percent, I think it is prudent to have surplus budgeting.”

Unless you dig into that surplus to hand money to farmers suffering from the drought.

After the latest extra drought relief measures the Government is set to spend $2 billion a year on drought assistance - $38 million each week...

Roughly half of Australian farming land in now drought-declared.

If our climate returns to what it used to be that spending should shrivel to zero.

But if Australia’s climate continues to change for the worse, either Mr Costello or one of his successors is going to have to make a tough decision.

Just as there will be no point in expecting Pacific Islanders to continue to live on islands that have become submerged as a result of climate change, there will be no point in continuing to pay Australian farmers to work land that can no longer be worked.

Drought support payments are meant to assist people facing exceptional circumstances.

The Treasurer yesterday gave no sign that he had even thought about biting the bullet. He said he would stand by people who loved the land, and if the drought got worse, he would spend more in what will be an election year. $7 million of the extra drought assistance spending has been set aside to advertise the extra spending.