Explanatory Memorandum
(Circulated by authority of the Minister for Agriculture, the Hon. Barnaby Joyce MP)Financial impact statement
It is estimated that the FHA will cost the Australian Government $99.4 million in the first three years of the program. This includes $62.1 million in administered costs (for payments to recipients) which will be paid through the Consolidated Revenue Fund. This estimate is based on expected demand for the program in its first three years of operation. However, FHA is uncapped and demand-driven, which means funding will increase in times of higher demand. Modelling by the Australian Bureau of Agricultural Resource Economics and Sciences shows that drought is likely to be the primary driver of increased demand.
The estimated cost of FHA includes program administration, case management and ongoing IT maintenance. It also includes a significant once-off significant investment to develop a fit-for-purpose IT system in 2013-14 to deliver the FHA.
Estimated financial impact:
| 2013/14 | 2014/15 | 2015/16 | 2016/17 |
| $14.3m | $17.1m | $26.8m | $41.2m |