Fed: Thousands expected to apply for flood funding

AAP General News (Australia)
12-05-2000
Fed: Thousands expected to apply for flood funding

By Jordan Baker

CANBERRA, Dec 5 AAP - The federal government today threw flood-stricken farmers a $216
million lifeline and warned the nation's banks they also had to pull their weight.

Under the two-year package, farmers can apply for money to help replant crops, repay
loans, support their income and help businesses back to their feet.

The funding came as the nation's peak commodities forecaster predicted this season's
projected winter crop harvest would be the smallest in five years.

Deputy Prime Minister John Anderson said fast assistance was essential to make sure
the crop-dependent areas of New South Wales and southern Queensland weathered the crisis.

"For many people this is literally economic survival or not," Mr Anderson told journalists.

Mr Anderson said the crop replanting grants of up to $60,000 from the Commonwealth
for badly-affected farms were the first in recorded history and could cost up to $24 million.

The package also included income-support payments, expected to cost $46 million, and
$10,000 grants to affected small and medium-sized businesses, he said.

But the bulk of the spending would fund a non-repayable interest rate subsidy of up
to 70 per cent or seven percentage points, at a cost of about $71 million.

The National Farmers' Federation praised the package, calling it generous and saying
it should pressure the banks to come to the party.

The opposition also welcomed it, but said more money needed to go to contractors who
had lost income and suffered damage to expensive equipment.

The only critic was the NSW Farmers' Association, which said half of the state's 4,000
flood-affected farms would miss out because the help was directed at those who had lost
crops over consecutive years.

Mr Anderson, who launched the package with Agriculture Minister Warren Truss, said
the government had helped out and it was time for the banks to pull their weight.

"There is anecdotal evidence that one of the things that the banks have been doing
is waiting to see what the government's response is," he said.

"Here is the government's response. It is very substantial.

"I make it plain that I believe, and I'm sure shareholders would agree with me, that
banks now must do everything they can to pull their weight in helping people restructure
and help themselves get into as strong a financial position as possible."

He said some banks had already indicated they would go outside their normal risk parameters
to help people restructure and refinance.

"They have also indicated a willingness to, through their various agencies and entities,
allow people up to 12 months' relief on things like lease payments on machinery," he said.

Mr Anderson urged those eligible to apply soon, saying he expected applications from
about half to three-quarters of the estimated 7,700 farmers eligible.

Centrelink would have information available next week, he said.

AAP jb/daw/was/de

KEYWORD: FLOODS NIGHTLEAD

2000 AAP Information Services Pty Limited (AAP) or its Licensors.