Interview with Laura Jayes, Sky News Live

Laura Jayes: The Prime Minister will also unveil more funding for regional communities and road upgrades. Scott Morrison will stand with senior Nationals to unveil the stimulus package in Canberra today.

[Excerpt]

Eliza Edwards: Heading in to a critical Cabinet meeting in Sydney to sign off on a new economic stimulus package.

David Littleproud: Tackling this drought as the drought continues.

Eliza Edwards: It will include an extra $178 million through the Drought Communities Program; $200 million redirected to a special drought round of the Building Better Regions Fund; and another $138 million to double funding through the Roads to Recovery Program.

David Littleproud: We’re going to cut the cheque. We’re going to cut the cheque and we’re going to get the money out.

Eliza Edwards: The full package of measures will be unveiled by the Prime Minister, who will be flanked by senior Nationals at a press conference on Thursday. A deliberate display of unity amid concerns from the junior coalition partner that they’re being sidelined in an area of policy priority. And while the package will be welcomed internally, the Government’s opponents have already branded it a failure. Shadow Agriculture Minister Joel Fitzgibbon tweeting the Government must restore Farm Household Allowance payments for 600 families, release the Drought Coordinator’s report, and devise a  national drought strategy.

There are murmurs the responsibility for drought policy could be shifted to the Department of Prime Minister and Cabinet, with David Littleproud confirming all options are on the table to improve the whole-of-government response, but insisting the Nationals will retain control of the portfolio.

David Littleproud: I’m the Minister responsible for drought.

Eliza Edwards: While the Minister stakes his claim, Pauline Hanson is happily sharing the limelight with her new political partner Bob Katter, also striking up an unlikely alliance with Labor to bring on debate on a politically sensitive dairy bill in the Senate on Monday.

Pauline Hanson:  I’ve spoken to Albanese, he said yes, Labor will support the dairy industry. So now it’s up to the National Party and the Libs to come on board with this.Eliza Edwards:

It will force National’s Senators to decide whether to cross the floor to support Senator Hanson’s push for a regulated minimum price for milk.

Tony Pasin: If we were to re-regulate, that would affect our trading position.

Eliza Edwards: Or stand by their government’s own legislation. Eliza Edwards, SKY News Canberra. [End of excerpt]

Laura Jayes: And let’s go live now to the Nationals leader Michael McCormack. He joins us live from Canberra. Thank you for your time. What are you delivering for farmers today?

Michael McCormack: Well there’s a range of measures, Laura. There’s- as you’ve said in the intro, there’s $200 million more for the Building Better Regions Fund. So a dedicated round for those drought stricken communities. So the councils within those communities will be able to apply for that funding; it will be dedicated to those areas stricken by the drought. Of course, there’s around $140 million for Roads to Recovery funding additional to what those councils would have already been receiving. Of course, there are 537 councils throughout Australia but 128 of them – six up on previously – have received a million dollars. So 128 councils will be receiving an additional $1 million plus additional Roads to Recovery funding. And that’s to keep those road [inaudible] council-related in the communities. So many of them, of course, have taken on farm hands to help with the additional maintenance works. But also when road [inaudible] come into drought stricken communities, they of course need to be accommodated, they of course need to be fed. So it’s a stimulus all-round.

So look, it’s a good package of measures. Of course, the concessional loans through the Regional Investment Corporation should those ag-related businesses- should farmers wish to avail themselves of those loans interest free for two years. Well that option is there too and we encourage, of course, farmers not to self-assess, to look at what range of options are available, to look at what assistance  is available and then to make sure that they discuss it with their family, with their bank, with their accountant, with their financial counsellor.

Laura Jayes: Okay. Let’s go through some of the detail. We’ll start with the concessional loans. What makes you think that these farmers who are already mortgaged to the hilt in many cases will be able to pay back these loans after two years?

Michael McCormack: Well we’re hoping it's going to rain. We're hoping that it's going to, of course, the good times will eventually come. We all know that Australia has rains followed by droughts followed by rains. That's the cycle of Australia. That's the cycle of agriculture. Agriculture has a very, very promising story to tell. We've got, of course, the world's best food and fibre. The good times will eventually return and when they do, the farmers will be able to, of course, should they avail themselves of these loans and should agribusinesses, ag-related small businesses, should they feel the need to take out a loan, of course they will recover too.

We know that our farmers are a resilient bunch. We know that those ag-related businesses are also very, very resilient. So we're offering it to them. They, of course, don't have to make that available to themselves but should they, having had the proper discussion with their financial experts, with their counsellors, with their banks and accountants, should they see the need that they can think that they can then of course pay it back, then that option is there for them.

Laura Jayes: What's the bond rate? What's this really costing the Government? The headline’s a billion dollars today.

Michael McCormack: Well the interest rate will be 3.11 per cent after the tax free- after the interest free two years. But you know, the fact is it's- that's what farmers have asked us to provide. That's what- when we’ve gone out to these drought-stricken communities and talked to ag-related- talked to seed merchants, talked to those sorts of small businesses, fertilizers, spray businesses, agronomists, that's what they've told us that they want. You know, a fellow went on a- one of the talkback shows and said: if only we could get some concessional loans for 12 months.

Well you know what? We're doing an interest free for two years. So we're doing it for that two-year period. Hopefully, you know, in that two years the rains will come, the fodder will return, the crops will be able to be grown. We'll be able to, of course, over a period of time restock much of the breeding cattle and sheep et cetera that we've had to send off to processing. That's also going to of course be an issue. At the moment, the tipping rate is now about 55 per cent heifers and cows, taking cattle of course to the processing. Normally, it's about 40 to 45 per cent. So that’s a concern, and of course we know that it takes years to recover breeding stock.

Laura Jayes: So what's the real cost to the Government then?

Michael McCormack: Well the cost is immaterial. We need to do this. Scott Morrison knows that we need to do this …

Laura Jayes: [Interrupts] Not really. Not when you’re pursing a surplus like you are.

Michael McCormack: Well we’re- and we’re going to produce the surplus. The first surplus for 12 years. But this is a necessary cost of doing government. This a necessary cost of being a right and responsible government that is actually reaching out to our drought-stricken communities not just our farmers.

Laura Jayes: [Talks over] But what is the cost of these concessional loans then?

Michael McCormack: Well that depends on how many of course concessional loans are taken, Laura. Of course if the take up rate …

Laura Jayes: [Interrupts] Have you done modelling on who might- how many farmers might take this up?

Michael McCormack: Well of course- of course we have and that modelling of course is based on making sure that those loans are available and as a responsible government, which knows how to manage the books, we're in a position where we're able to provide these incentives. Whether it's roads funding, whether it's maintenance funding for much-needed roads, councils, the concessional loans, we're able to do that because we've got a budget which is in a good position. Far better position than what we were left. Imagine this drought if Labor were in government? I mean they didn't want to support the Future Drought Fund at any rate.

Laura Jayes: Okay. Let's look at the other parts of this package. The Nationals, just two weeks ago, wanted $10 million to be given to each shire affected by the drought. What you've got today is $1 million for an extra six shires.

Michael McCormack: Well the drought package that was put up by a member of the National Party was around $650 million but contingent on the states kicking the till. This package that we're announcing today is not contingent on the states stumping up money. This is real money, real cash, for our farming communities, for our rural and regional communities hardest hit by the drought.

Laura Jayes: [Talks over] Aren’t you raiding $200 million out of some of your own funds, the Building Better Regions Fund, to pay for it?

Michael McCormack: Well that's just part of the package. It’s been redirected and it's a drought fund. It's a drought round; a dedicated drought round. You might recall that the last Building Better Regions round had a dedicated tourism component which worked very, very well and I know that given the fact that as the 128 councils announced today, each and every state and the Northern Territory have councils in drought areas which can then apply for that funding and so that …

Laura Jayes: [Interrupts] But Michael McCormack, just two weeks ago, you wanted an extra $1.3 billion in funding for these regions and for these council areas that are affected by the drought. What happened?

Michael McCormack: That was – that was one measure put forward by one member of the National Party. Yes, he took it to the National Party room but it wasn't a full National Party room. You might recall, Laura, that the senators were not in our National Party room and there was one member away for personal reasons and so it wasn't endorsed by the National Party as such. It was a member's proposal. And look, I always welcome any National Party member bringing forward these proposals, bringing forward suggestions that are going to help our drought-stricken communities. That was one- that was one policy position that particular member thought might help the situation and indeed, of course, we know that councils need help. We know that agribusinesses need help and farmers need additional help and that's what we're providing today.

Laura Jayes: In the end, are you satisfied or did you get rolled in Cabinet?

Michael McCormack: No, no, I didn't get rolled in Cabinet at all. In fact, the package of measures very much had a very much a National Party decision making on this. Scott Morrison and I work very, very well. I'm not going to go on what happens in Cabinet, that happens in Cabinet. Fact is, Scott Morrison understands, as all the Liberals do, how important the drought is and the fact that we address it of course. Many regional Liberals are feeling this just as much as National Party. They live it every day.

Laura Jayes: So are you restoring- are you restoring the funding- restoring that money to the Farm Household Allowance component and the people that have already been kicked off that this year?

Michael McCormack: Well, as I've said to you previously, we've got legislation to ensure that when passed, that we will make sure that there are additional top up payments for those farmers and that's very, very important to know that our farmers won't be left behind by this Government. We are very much, as Liberals and Nationals, dedicated to making sure that we address the drought, that we continue to monitor the situation and address it as it's needed.

And of course, we've had patchy rain over the weekend. Some areas got very good rain but much more is required, much more rain is required. This is going to take many more months, indeed years, for these drought stricken communities to recover. But recover they will. And when they do, agriculture is going to be booming again as if- it's not broken at the moment but it certainly needs help. We're providing that today, Laura.

Laura Jayes: And did you try to bury that Auditor General's report on Tuesday?

Michael McCormack: I don't try and- no, that wasn’t a decision of government, when it when it came out. That was not decision by government at all; that was made by others. Fact is, I'm very proud of what we've done in the regional space and the fact is, when it's funding for regional communities under a regional package that is provided by the Liberals and Nationals, it actually goes to the regions unlike Labor who provide that sort of funding for metropolitan seats, we provide it for the regions. That's the difference. It's good funding, it's going to create jobs, it's going to create a lot more opportunities in those regional areas where it's most needed.

Laura Jayes: Michael McCormack, thank you.

Michael McCormack: Thank you very much, Laura.