Financial Planning

By Gordon Hall - Hills and Plains Rural Counselling Service

FINANCIAL problems encountered by primary producers are best addressed if they are recognised at the earliest possible stage.

Early problem recognition expands the range of options which may assist recovery, provide time to plan for adequate cash flow requirements and greatly minimise the stress on primary producer families.

Look ahead - at least four to six months - and consider what your situation will be like.

Then start putting strategies in place to deal with it.

PLAN: It is preferable that financial planning and analysis are part of the daily management of primary production.  Ultimately, the responsibility for improving technical and business management skills rests with the individual primary producer.

But professional advice is available if required.  Primary producers are encouraged to prepare farm business plans and undertake further education and training in business management.

COMMUNICATE: Maintaining an open relationship with financial institutions during times of difficulty is essential.

If you are in financial trouble, please talk to the people/institution you owe money to, whether they are a creditor or a bank.

If you find it difficult to discuss your finances with your bank, use a rural counsellor to discuss your issues confidentially.

Mediation should be considered when a financial institution and the primary producer cannot resolve the financial problem by negotiation, and the parties agree that the mediation may assist them in reaching agreement.

The South Australian Farmers' Federation Farm Finance Strategy details a mediation process.

USE EXPERTS: Independent professional advice minimises the risks in lending and borrowing decisions, and provides an opportunity for early recognition of a primary producer's potential financial problems.

Well meaning advice from friends can often increase financial difficulty rather than ease the burden.

Primary producers are encouraged to consult independent professional advisers, including agricultural consultants, rural counsellors, legal advisers and accountants to discuss their financial and business issues.

Use existing primary producer assistance programs

FARM HELP: This is a program owned by the Federal Department for Agriculture, Food, Fisheries and Forestry and administered by Centrelink.

It has three components:

* Income support for up to 12 months at the job search rate (all farm assets are ignored in this scheme).
* A $3000 grant for getting consultancy advice.
* A $45,000 grant for people looking to get out of farming (less any amount received as part of income support).

The Farm Help scheme runs until November 2003.  Contact Centrelink Rural Call Centres on 131021 or 1800 050 585 to find out more.

Practical help for Drought affected taxpayers

The Tax Office recognises that drought has directly affected the income of many farmers and farm workers and many businesses that rely on the farming sector.

The Tax Office encourages drought affected farmers, businesses and community members in regional and rural communities experiencing difficulty lodging tax returns or paying money they owe, to call us to find out how we can help.

Further information on drought assistance including farm management deposits, forced disposal of livestock and the purchase of water facilities is available on the Tax Office website www.ato.gov.au or by calling the Tax Office on 1300 720 092.

If you are experiencing any difficulties in meeting your tax obligations due to the drought, give the Tax Office a call on 13 11 42 to discuss your circumstances. Your tax agent can also talk to the Tax Office on your behalf by calling 13 72 86.