Dissenting Report by Senator Xenophon

1.1        The Bankruptcy Amendment (Exceptional Circumstances Exit Package) Bill 2011 was introduced following reports that drought-affected farmers who had qualified to receive the Exceptional Circumstances Exit Package were being threatened with bankruptcy by creditors seeking to capitalise on the Government grant they had received.

1.2        The Exceptional Circumstances Exit Package (EC Exit Package) was introduced in 2007 by the Howard Government as part of a suite of drought assistance measures, to "assist farmers who have a significant long-term personal and financial attachment to their property and choose to leave their long-term family farm"[1].

1.3        As Carol Vincent, Chief Executive of the South Australian Farmers Federation (SAFF), said in a submission to the Inquiry:

The Exit Grant provides [such] farmers the opportunity to leave with some dignity and some funding so that they and their families can start life after farming. It is unconscionable that financial institutions and other creditors, who may have been involved in putting pressure on such farmers to sell, are able to threaten bankruptcy so that they can get access to this government funding.[2]

1.4        Under this Bill, the EC Exit Package will be exempt from bankruptcy proceedings, so long as the final orders have not been made, to ensure that the very intention of the scheme is upheld – that farmers will be able to have access to funds to assist them to leave their family properties, to relocate and to train in new employment.

1.5        In the Queensland Government's submission to the Inquiry, Minister for Agriculture, Food and Regional Economics, The Hon Tim Mulherin MP, wrote:

I note the EC Exit Package is a taxpayer funded assistance measure specifically targeting low income and low asset farm owners. I consider it negates the purpose of the scheme and is therefore unacceptable for creditors to force farm families to hand over re-establishment assistance to offset any remaining debt once the sale of property and farm assets has been completed and proceeds have been disbursed.[3]

1.6        Furthermore, there is precedent for Government rural support schemes to be exempt from the Bankruptcy Act – the Dairy Exit Program Scheme 2000, the Farm Help Re-establishment Gran Scheme, the Sugar Industry Reform Program, the Rural Adjustment Scheme, to name a few.

1.7        While these schemes are now all closed, it should be noted that the Department of Agriculture, Fisheries and Forestry referred to the Farm Help Re-establishment Grant which was exempt from bankruptcy proceedings in its submission. It stated that:

The Farm Help Re-establishment Grant was intended to provide a head start to help farmers in financial difficulty successfully establish a life after farming. The grant was exempt from bankruptcy proceedings under the bankruptcy legislation. This recognised the intent of the re-establishment grant to assist farmers to re-establish outside of farming and the decision to exempt the grant from bankruptcy was to guarantee some financial security for the farm family after exiting.[4]

1.8        On the very same premise, the Exceptional Circumstances Exit Grant should also be exempt from bankruptcy proceedings.

Recommendation 1

1.9        That the Bill be passed.

 

Nick Xenophon

Independent Senator for South Australia

Navigation: Previous Page | Contents | Next Page