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Concern over future of Farm Household Allowance

Lucy Barbour, Thursday June 19, 2014 - 13:40 EST
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The Rural Financial Counselling Service is concerned that the Federal Governments draft protocol for the Farm Household Allowance require human services officers to provide financial advice to farmers. - ABC

There are concerns farmers may recieve mediocre financial advice under changes to the Federal Government's Farm Household Allowance scheme, which will see case officers from the Department of Human Services providing advice to farmers.

From July, farmers facing financial hardship can apply for payments to help improve their businesses and reduce dependence on government assistance.

The Interim Farm Household Allowance was introduced under the former Labor government to replace the Transitional Farm Family Payment.

Under the previous scheme, financial advice was provided by rural financial counsellors and private practitioners.

Chair of the Rural Financial Counselling Service for Western Australia, Julian Krieg says human services case officers don't have the experience to provide financial advice.

"We don't have a problem with the case manager ensuring farmers comply with the agreement they have but we do have problems with them giving advice and they don't have the experience needed to do that particular task.

"It's like going to the doctor's surgery and asking the receptionist, 'what's wrong with me?

The Government's draft protocol states that case officers will assist recipients to meet their activity requirements by helping them make decisions and take actions to improve their financial situation.

Part of their role will be to ensure recipients undertake training or development courses, make appointments with counsellors and other professional advisers, and seek alternative income sources. They would also 'encourage recipients' to continue working with their rural financial counsellor and can refer their client onto a counsellor at any time.

But Mr Krieg says there would be an unnecessary duplication of services, and qualified financial practitioners and counsellors could end up being 'sidelined' by case workers.

"[The protocol] also says that the case officers' terms of engagement will take precedence over any of [their compliance duties]," he said.

"That's where the problem comes. The case officer should make sure that the farming business is engaged with financial counselling services. It should not take precedent over the professional advice they get from other sources."

Mr Krieg says the Federal Government must also consider the legal ramifications of its new protocol.

"By default, because [human services case officers] are employees of the Commonwealth Government, if they give that advice, then they can make the Government liable to litigation for any losses the farmer may experience and there's some really serious issues around that," he said.

The Farm Household case officer role was trialled in the pilot of drought reform measures in Western Australia from 2010-2012.

Mr Krieg says in some cases, where there was 'strong negotiation' between the case manager and the financial counselling service, the system worked well.

"But there were a number of cases where the case manager said, 'well I have precedence here' and refused to refer on to appropriate financial counselling service people," he said.

"And so very inappropriate things happened, and there was more of that than the good stuff.

"Setting very low benchmarks for things that farmers like getting some more education or doing more soil testing doesn't actually help a farmer to realise where his business may be failing and what he may need to do to actually put it back on track.

"So those low-level things, given by inexperienced people, don't actually help a farmer return to profitability."

Mr Krieg is concerned that some farmers might end up being 'excluded' from getting financial advice from counsellors.

The Federal Department of Agriculture says it holds the Rural Financial Counselling Service in 'high regard' and is amending the protocol, but hasn't explained how.

A spokesman for Agriculture Minister Barnaby Joyce said, "Under the legislation, farmers receiving the Farm Household Allowance from 1 July will be required to seek professional financial advice from a prescribed adviser; a farm consultant or an accountant."


© ABC 2014

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