Commonwealth Numbered Acts

STATES AND NORTHERN TERRITORY GRANTS (RURAL ADJUSTMENT) ACT 1985 No. 75, 1985 - SCHEDULE

                                    SCHEDULE                          Section 4

  AN AGREEMENT made the                           day of
one thousand nine hundred and eighty five between -
THE COMMONWEALTH OF AUSTRALIA (in this agreement called "the Commonwealth") of
the first part,
THE STATE OF NEW SOUTH WALES of the second part,
THE STATE OF VICTORIA of the third part,
THE STATE OF QUEENSLAND of the fourth part,
THE STATE OF WESTERN AUSTRALIA of the fifth part,
THE STATE OF SOUTH AUSTRALIA of the sixth part,
THE STATE OF TASMANIA of the seventh part, and
THE NORTHERN TERRITORY OF AUSTRALIA of the eighth part.
WHEREAS -

                (A)  the Commonwealth, the States and the Northern Territory
                     of Australia recognize
that there is need for assistance to be provided to persons engaged in rural
industries throughout Australia in the interest of those industries and of
Australia generally;

                (B)  Ministers of the Commonwealth, of the States and of the
                     Northern Territory
of Australia have agreed upon the Outline of Scheme for Rural Adjustment set
out in the Schedule to this agreement as constituting a Scheme under which
assistance of various kinds could be provided;

                (C)  the carrying out of the said Scheme involves financial
                     assistance in
different forms being granted by the Commonwealth to the States and the
Northern
Territory of Australia for that purpose; and

                (D)  the Parliament of the Commonwealth has authorized the
                     execution of this
agreement by and on behalf of the Commonwealth and the provision of financial
assistance to the States and the Northern Territory of Australia as provided
in this agreement.
NOW IT IS HEREBY AGREED as follows:
I - INTRODUCTION Operation of Agreement
1. (1) In this agreement, each State and the Northern Territory of Australia
in respect of which the agreement has come into force is referred to as a
"State", and the expression "the States" means, except where the context
otherwise requires, all of the States and the Northern Territory of Australia
in respect of which for the time being the agreement is in force.

(2) This agreement shall, as between the Commonwealth and a State, come into
force when it has been entered into by the Commonwealth and that State.

(3) Notwithstanding that in this agreement all the States of New South Wales,
Victoria, Queensland, South Australia, Western Australia and Tasmania and the
Northern Territory of Australia are named as parties, this agreement shall
operate as an agreement between the Commonwealth and the party or parties in
respect of which it comes into force as fully and effectually as if the party
or parties in respect of which it comes into force were the only party or
parties so named other than the Commonwealth.

(4) In the event that a State ceases to be a party this agreement shall
nevertheless continue in force with respect to the Commonwealth and the States
which are parties when the cessation takes effect. Performance of Agreement
2. The Commonwealth will provide for or secure the performance by it and its
authorities of the obligations of the Commonwealth under this agreement and
each of the States will provide for or secure the performance by the State and
its authorities and instrumentalities of the obligations of the State under
this agreement. Interpretation
3. (1) In this agreement, unless the contrary intention appears -

"aquaculture" means industries which conduct systematic farming of plants and
animals in water involving the use of man-made infrastructure on or adjacent
to
land, but excludes harvesting-type industries where farming or cultivating is
not an
integral part of the operation;

"average outstanding loans" means half the total indebtedness of a State at
the end of
each successive period of six months of a financial year under its borrowings,
whether from the Commonwealth or otherwise, for the purposes of the Scheme,
and half the outstanding borrowings otherwise than by the State at the end
of each such successive period for the purposes of the Scheme;

"financial year" means a period of twelve months ending on the thirtieth day
of june;

"the Minister" means the Minister for Primary Industry;

"rural industries" mean all agricultural, horticultural, pastoral,
apicultural and aquacultural industries;

"the Scheme" means the scheme of assistance to be established and operated by
a State in accordance with clause 4.

(2) A reference in this agreement to a Minister of the Commonwealth or of a
State shall include a reference to a Minister for the time being acting for or
on behalf of the Minister referred to or to a Minister who has taken over the
responsibilities of the Minister under this agreement.

(3) A reference in this agreement to a State shall include a reference to an
authority or authorities of a State that has or have the administration of the
Scheme on behalf of the State.

(4) In this agreement, except where the context otherwise requires -

   (a)  a reference to a clause refers to the relevant clause of this
        agreement;

   (b)  a reference to a sub-clause refers to the relevant sub-clause of the
clause in which the reference appears; and

   (c)  the Schedule to this agreement shall be deemed to be an integral part
        of
this agreement.
II - ADMINISTRATION OF SCHEME State to operate Scheme
4. (1) Each State will, by using, whether or not with funds borrowed by a
State, the financial assistance provided by the Commonwealth in accordance
with this agreement, establish and operate a scheme of assistance to persons
engaged in rural industries in that State.

(2) Borrowings referred to in sub-paragraphs 6 (a) (i) and (ii) and 6 (b) (i)
and (ii) of the agreement shall be at a rate or rates of interest which,
together with any other borrowing charges, is or are no greater than that or
those set by a lender or lenders nominated from time to time for the purpose
by the Minister and agreed to by State Ministers.

(3) The Scheme shall consist of the forms of assistance referred to in Clause
5 and shall be operated in conformity and in accordance with the general
principles and the provisions set out in the Outline of Scheme for Rural
Adjustment contained in the Schedule to this agreement, as amended at any time
in pursuance of sub-clause 11 (1).

(4) Unless the Commonwealth and a State at the time of entering into this
agreement agree otherwise the Scheme shall be deemed to have commenced
operation as between the Commonwealth and that State on the first day of July
1985. Forms of Assistance
5. For the purposes of this agreement the various forms of assistance under
the Scheme are referred to as follows: PART A assistance

   (a)  the assistance provided for in Part 2 of the Schedule - as debt
        reconstruction;

   (b)  the assistance provided for in Part 3 of the Schedule - as farm
        build-up;

   (c)  the assistance provided for in Part 4 of the Schedule - as farm
        improvement; PART B assistance

   (d)  the assistance provided for in Part 5 of the Schedule - as carry-on
        finance; PART C assistance

   (e)  the assistance provided for in Part 6 of the Schedule - as household
        support;

   (f)  the assistance provided for in Part 7 of the Schedule - as
        rehabilitation. Financial Assistance to be Provided
6. Subject to this agreement, the financial assistance that is to be provided
by the Commonwealth to a State under this agreement shall be as follows:

   (a)  Part A assistance - an interest subsidy equal to 50% both of the
        interest
payable on, and of associated costs of,

        (i)    borrowings by the State for the purpose of Part A assistance;
               and

        (ii)   borrowings, otherwise than from the State under the Scheme, by
               a
        person         eligible under the Scheme for Part A assistance,

limited to the first seven years of each borrowing or if there are successive
borrowings the first seven years of the total number of years of those
borrowings.

   (b)  Part B assistance - in the absence of any other arrangements being in
        force or
agreed at the time an interest subsidy equal to 25% both of the interest
payable on, and of associated costs of,

        (i)    borrowings by the State for the purpose of Part B assistance;
               and

        (ii)   borrowings, otherwise than from the State under the Scheme, by
               a person
eligible under the Scheme for Part B assistance,
limited to the first seven years of each borrowing or if there are successive
borrowings the first seven years of the total number of years of those
borrowings,
provided that the State contribution to the interest subsidy is at least 25%
of the said interest and costs over the same period; and

   (c)  Part C assistance - payments by the Commonwealth of an amount equal to
        the
expenditure by the State in the provision of those forms of assistance.
Allocation of Borrowings by a State and Amounts of Interest Subsidy Provided
by the Commonwealth
7. (1) Subject to the provisions expressly made by this agreement, both the
funds borrowed by the State and the amounts of interest subsidy provided by
the Commonwealth for the forms of assistance referred to in paragraphs (a),
(b) and (c) for Part A assistance in Clause 5 shall be allocated between those
forms of assistance in such proportions as the Commonwealth determines after
consultation with the State.

(2) A determination by the Commonwealth for the purposes of sub-clause (1)
shall specify a target percentage for commitments on farm build-up and on farm
improvement which the State shall endeavour to achieve and a maximum
percentage for commitments on debt reconstruction which the State shall not
exceed without the prior approval of the Commonwealth.

(3) If during a financial year either the Commonwealth or a State informs the
other that it considers the allocation of the borrowings by the State or
amounts of interest subsidy provided by the Commonwealth in respect of the
year should be varied, further consultations will be held between the
Commonwealth and the State with a view to varying the determination by the
Commonwealth for the purposes of this clause should the Commonwealth see fit
to do so. Terms of Loans by a State
8. (1) The rates of interest at which money is lent by the State under the
Scheme in providing Part A, Part B and Part C assistance shall, subject to
Part 5 of the Schedule, be as determined by the State.

(2) The length of loans and the period during which an interest subsidy
applies in respect of loans shall, subject to Part 5 of the Schedule, be as
determined by the State.

(3) The State shall have the right to review the terms of repayment, including
interest rates of individual accounts, at any time and shall exercise this
right at regular intervals with the objective of the borrower being encouraged
to transfer to commercial credit as soon as circumstances permit.

(4) The State shall have the right at any time to convert any loans made by it
by way of Part C assistance into grants. Payment by State of Interest Only
9. (1) Subject to sub-clause (2), where an amount of interest subsidy is paid
to the State by the Commonwealth in respect of a borrowing referred to in
sub-paragraphs 6 (a) (ii) and 6 (b) (ii) that amount shall be paid by the
State either to the lender in satisfaction of interest payable on that
borrowing or to the borrower in reimbursement of interest paid by that
borrower to that lender.

(2) The amount paid by the State referred to in sub-clause (1) shall be, in
relation to each individual borrowing, determined by the State having regard
to the terms of the borrowing. Administration Expenses
10. The Commonwealth will pay a State at the end of each successive period of
six months of a financial year towards administration expenses of the State in
providing assistance under the scheme

   (a)  under Parts A and B - an amount equal to 1 per cent of so much of the
        amount of
average outstanding loans as relates to assistance under those Parts;

   (b)  under Part C - an amount equal to 2 per cent of assistance provided
        under that
Part for that period. Amendment of Schedule
11. (1) The provisions of the Schedule to this agreement may be amended from
time to time by agreement between the Ministers of the Commonwealth and of the
States for the time being responsible for the administration of the Scheme.

(2) Where so agreed between the Commonwealth Minister and the Minister or
Ministers of the relevant State or States, any amendments to the provisions of
the Schedule to this agreement may be made and take effect as between the
Commonwealth and one or more of the States without affecting the operation of
this agreement as between the Commonwealth and a State the Minister of which
has not so agreed.
III - FINANCIAL ASSISTANCE Provision of Financial Assistance
12. Subject to, and to the performance by a State of, the provisions of this
agreement, the Commonwealth will make financial assistance available to the
States for the purposes of the Scheme. Amount of Financial Assistance
13. (1) The amount of financial assistance to be made available by the
Commonwealth to each State for Parts A and C assistance during a financial
year shall be determined by the Commonwealth after consultation with the
States and on a basis of a total amount of borrowing which the Commonwealth
considers feasible to subsidise. Before the commencement of the financial year
Commonwealth and State Ministers will consult taking into account such matters
as the state of rural industries, size and importance of rural industries,
short and long-term industry trends and priorities for rural adjustment
financial assistance and will give due consideration to submissions made by
the States not later than the end of February last preceding the financial
year and will have regard to such other criteria as the Commonwealth and
States consider appropriate.

(2) The amount to be made available to a State during a financial year
determined under sub-clause (1) may, at any time the Commonwealth so considers
fit, after consultation with the other States, be increased by the addition of
a supplementary amount determined by the Commonwealth at that time.

(3) The amount of financial assistance to be made available by the
Commonwealth to a State for Part B assistance shall be determined at the time
the Commonwealth and the State agree that the provisions of such assistance is
warranted.

(4) When an amount of financial assistance determined in respect of a State
under the preceding sub-clauses will not be required by the State during the
period for which the amount is determined, the amount, or such part of that
amount as the Commonwealth determines, may, with the consent of that State, be
allocated by the Commonwealth to another State and the respective amounts of
financial assistance to which those States are entitled under this clause
during the relevant period shall be adjusted accordingly.

(5) Should a State certify that, taking into account any money earned referred
to in sub-clause 15 (3) but not its administration expenses, it is incurring
losses under the Scheme in meeting payments of interest on its borrowings in
respect of Parts A and B assistance from circumstances beyond its control, the
Commonwealth is to review the position with the State and make supplementary
payments to the extent of such losses.

(6) Should a State certify that, taking into account matters referred to in
sub-clause (5), it is incurring any other losses under the Scheme from
circumstances beyond its control, the Commonwealth may review the position
with the State and give consideration to making supplementary payments in
respect of such other losses.

(7) Where repayments of, or payments of interest on, any borrowings in respect
of Part A and Part B assistance cannot be recovered by a State from persons
who have received assistance under those Parts of the Scheme the Commonwealth
and the State shall contribute towards the amount not so recovered as follows:

   (a)  up to a total amount equal to 10 per cent of borrowings and interest
        owing by the
State at the end of the financial year in which the contribution is sought,
in equal shares;

   (b)  for amounts in excess of that total amount, the Commonwealth shall
        contribute
that excess. Advances
14. (1) The Commonwealth may, at such time and in such amounts as the Minister
thinks fit, make advances on account of the payment that may be made by the
Commonwealth under clause 17.

(2) An amount or part of an amount advanced by the Commonwealth under this
clause may be deducted by the Commonwealth from an amount that subsequently
becomes payable under clause 17 or, if no further amounts will become payable
under that clause, shall be refunded by the State to the Commonwealth at the
request of the Minister. Use of Advances and Other Moneys
15. (1) A State shall ensure that an amount or any part of an amount advanced
to the State and not refunded under the last preceding clause is used or
applied for the operation of the Scheme.

(2) A State shall ensure that any financial assistance paid by the
Commonwealth under the Scheme is either used or applied for the operation of
the Scheme or is refunded to the Commonwealth.

(3) A State shall ensure that any money earned by it under the Scheme on
financial assistance provided by the Commonwealth to the State under this
agreement is either used or applied for the operation of the Scheme or is
refunded to the Commonwealth.

(4) A State, on being requested by the Minister to do so, shall pay to the
Commonwealth any amount which is held by it under this agreement and which the
Minister, after consultation with the State, determines in writing to be in
excess of the amount the State needs in the operation of the Scheme.

(5) For the purposes of this clause the reimbursement by a State of the part
of its administration expenses to be borne by it shall be taken not to be done
in the operation of the Scheme. Pre-commitment of Assistance
16. (1) Where the Minister has, upon the State establishing to the Minister's
satisfaction that the circumstances so warrant, authorized the State during a
financial year to commit to the Scheme financial assistance to be received
under this agreement during the next succeeding financial year, the State may
approve the provision of assistance under the Scheme to the extent of the
amount or amounts that have been so authorized by the Minister.

(2) Any amounts that are approved by the State under sub-clause (1) shall be
included in the amount of financial assistance to be made available by the
Commonwealth to the State for the purposes of the Scheme as determined under
clause 13 in respect of the financial year for which the amounts have been
approved. Payments of Financial Assistance
17. (1) The Commonwealth shall, from time to time, at the request of a State
and subject to the provisions of this agreement make payments to the State of
the financial assistance to be provided to the State under this agreement -

   (a)  in respect of Parts A and B assistance - in amounts equal to the
        interest subsidy
payable by the Commonwealth in respect of a borrowing referred to in
sub-paragraphs 6 (a) (i) and (ii) and 6 (b) (i) and (ii) of this agreement;
and

   (b)  in respect of Part C assistance - in amounts equal to the expenditure
        by the State
(other than administration expenses) in the provision of those forms of
assistance.

(2) The payments of interest subsidy by the Commonwealth in respect of a
borrowing referred to in -

   (a)  sub-paragraphs 6 (a) (i) and 6 (b) (i) of this agreement shall be paid
        to the State at
least seven days before the date on which the State is liable to pay interest
on such
borrowings; and

   (b)  sub-paragraphs 6 (a) (ii) and 6 (b) (ii) of this agreement shall be
        paid to the State
at such times as will facilitate the discharge of the liability of the person
referred to
in those sub-paragraphs to pay the relevant amount of interest.

(3) The payments of financial assistance by the Commonwealth in respect of
Part C assistance to the State shall be made quarterly in advance on receipt
of estimates from the State setting out the amount which the State expects to
expend in the quarter and an appropriate adjustment shall be made in the
succeeding or subsequent quarters when the actual amount expended by the State
on those forms of assistance is ascertained. Supporting Financial Evidence
18. (1) A State shall furnish to the Minister such documents and other
evidence to justify payment of any moneys to the State under the Scheme as the
Minister may from time to time reasonably request, whether the request by the
Minister is made before or after the Commonwealth has made the advance or a
payment pursuant to the request by the State.

(2) Information furnished by a State pursuant to Clause 18 (1) shall include
details of accounts of borrowers from the State or otherwise under the Scheme
in a format agreed from time to time by Commonwealth and State Ministers.
Repayments of Part C Assistance
19. Each State shall, by way of repayment of the form of assistance referred
to in Part C of clause 5, pay to the Commonwealth so much of that assistance
and interest thereon as is recouped by the State in any year from the
recipients of that assistance, such payments to be made on each 15th day of
January and July next succeeding the receipt of those moneys by the State.
Audit
20. (1) The accounts, books, vouchers, documents and other records of a State
relating to the operation of the Scheme shall be subject to audit by the
Auditor-General of the State.

(2) A report on the audits in respect of each financial year shall be
furnished by the Auditor-General of the State to the Minister in a form
approved by the Minister as soon as possible after the completion of the
financial year and no later than 31 December of the succeeding financial year.
Other Financial Arrangements
21. Financial arrangements in connection with the Scheme, other than those
provided for in this agreement, shall be carried out as agreed from time to
time between the relevant Commonwealth and State Ministers responsible for
such financial arrangements.
IV-GENERAL Review
22. (1) The operation of the Scheme in relation to all of the States will be
reviewed from time to time as appropriate by the Commonwealth and the States
in the light of experience in its administration.

(2) Where on a review of the operation of the Scheme the Ministers of the
Commonwealth and of the States consider an amendment to the Agreement should
be made the Commonwealth Minister will seek to have the Agreement so amended.
Exchange of Information
23. State and Commonwealth Officers associated with the Scheme will meet
together as appropriate and at least once in each year and exchange
information on any matters pertinent to the Scheme, including trends in
adjustment assistance being provided to persons in rural industries having
regard to the outlook for the rural industries. Provision of Information and
Review
24. The State will supply to the Commonwealth from time to time such
information regarding the operation of the Scheme by the State for purposes of
monitoring and accountability as agreed by the Commonwealth and the States at
review meetings. Report to Parliament
25. The Minister shall on the basis of the information supplied by the States
no later than 31 December of each financial year submit an annual report to
the Parliament of the Commonwealth relating to the operation and effectiveness
of the Scheme. Loan Council
26. In the event that the Loan Council decides to include borrowings by the
State for the purposes of Parts A and B assistance in borrowings subject to
Loan Council control or oversight on terms which a State considered
unacceptable, the Commonwealth and the States shall consult to determine
whether any amendments should be made to this agreement. Cessation of
Agreement by a State
27. A State may, on giving at least a period of sixty days notice in writing
to the Commonwealth, cease, subject to its performance thereafter of any
outstanding obligation, to be a party to this agreement at the expiry of that
period of notice.
THE SCHEDULE
RURAL ADJUSTMENT-OUTLINE OF SCHEME
Part 1 - General Principles

   (a)  All agricultural, horticultural, pastoral, apicultural and
        aquacultural
industries are
included in the Scheme. It is recognised that in particular circumstances some
industries may need additional special consideration.

   (b)  The general principle to be applied is to distribute the available
        resources as widely
as practicable. Applicants must be primary producers relying primarily on
income
from primary production who are unable to obtain funds on reasonable terms and
conditions from normal commercial sources.

   (c)  The over-riding objective is to assist rural industry structural
        adjustment and to
ease adjustment pressures through the provision of adjustment assistance to
individual farmers who are considered to have the capacity to achieve and
maintain
a commercially viable farm business enterprise.

   (d)  The State will avail itself of the best available advice on the
        technology and market
prospects of all the industries included in the Scheme.

   (e)  Companies will not be eligible for assistance unless the State, having
        considered the
shareholdings and being satisfied that the shareholders are primary producers
relying primarily on the income of the company for their livelihood, considers
it
appropriate to provide assistance.

   (f)  In cases of Parts A and B assistance it is an essential part of the
        Scheme that
adequate supervision of property management and the financial affairs of the
assisted farmer is maintained. If the State deems it necessary, it may require
in
respect of loans made by the State under the Scheme that moneys receivable on
account of the property will be received by the State or its agent or a body
nominated by the State, payments within the approved budgets being made
through
normal channels.

   (g)  Repayment of advances made by the State and interest due thereon will
        be secured
by the best and most appropriate security available, recognising that this may
involve ranking after existing securities.

   (h)  A transfer of the property or any interest therein before advances
        made by the
State are repaid will be permitted only with the consent of the State which
will
upon transfer, or upon succession on the death of the borrower, have the right
to
review its arrangements in respect of the property.

   (i)  The arrangements with the assisted farmer will be subject to regular
        review by the
State. They may be terminated if the farmer ceases to work the property
personally,
fails to observe the obligations and undertakings under the arrangements or if
the
State decides that for any reason the farmer lacks reasonable prospects of
successful economic operation. Otherwise the arrangements shall be terminable
when the
State decides that the farmer's prospects of successful economic operation are
no
longer dependent on the extension of concessional interest rates.

   (j)  The eligibility of an applicant for one form of assistance under this
        Scheme will not
necessarily be affected by the applicant having applied for or receiving
another
form of assistance under the Scheme.

   (k)  The rate of interest payable on advances by the State and the amount
        of interest
subsidy payable in respect of borrowings, otherwise than from the State, under
the
Scheme will be decided by the State in the circumstances of the particular
case. The State will have the right to review

        (i)    in respect of advances by the State, the interest rates and
               terms of
repayment on individual accounts

        (ii)   in respect of borrowings, otherwise than from the State, under
               the Scheme,
the amount of interest subsidy payable
with the objective of the borrower being brought up to commercial interest
rates as soon as circumstances permit.
Part 2 - Debt Reconstruction

(1) Purpose
To assist an applicant who, although having sound prospects of long term
commercial
viability, has used all the applicant's cash and credit resources and cannot
meet the applicant's financial commitments.

(2) Tests of Eligibility

   (a)  The applicant is unable to obtain finance on reasonable terms to carry
        on from
normal commercial sources and is thus in danger of losing property or
other assets if not assisted under the Scheme.

   (b)  There is a reasonable prospect of successful operation possible with
        assistance
under the Scheme, the prime requirements being ability to service commitments
and to reach the stage of commercial viability within a reasonable time.

   (c)  Assistance is merited and the applicant's difficulties are not
        substantially due to
circumstances within the applicant's control.

(3) Nature of Assistance The assistance to be provided may include where
necessary:

   (a)  A re-arrangement and/or a composition of debts to allow more time for
payment.

   (b)  The negotiation of a concessional rate of interest for existing
rates.

   (c)  Advances of additional funds for carry-on expenses, livestock and
further
property development.

   (d)  Where the State legislation so provides, a protection order against
        any
creditor who has threatened action for debt, to apply while the application is
under consideration and subject to such extensions as the State may from time
to
time determine.

(4) Method of Operation

   (a)  A re-arrangement and/or composition may take the form of the State
        advancing
money or arranging for an offer of an advance of money to pay off in whole or
part
the creditors (whether or not the debts have been written down by the
creditors
under (b) below), excluding the Crown or providing interest subsidy in respect
of
borrowings otherwise than from the State under the Scheme. There may be an
arrangement by the secured or unsecured creditors to postpone repayments of
principal and to refrain from taking action against the debtor for a specified
time.
Composition arrangements require the agreement in writing of creditors.

   (b)  The possibility of creditors, including the Crown, local authorities
        and public
utilities being asked to defer or write off part of their debts should be
considered.
Creditors should not be pressed to the extent that the availability of credit
to rural
industries is damaged.

   (c)  Additional funds advanced or the interest subsidy previously referred
        to to assist
with carry-on expenses, livestock purchase and further property development
will
be strictly limited to the minimum which the State considers is required to
enable
the applicant to carry on and free the applicant from dependence on the
assistance
within the term of the advances or the interest subsidy.

   (d)  In exceptional cases, advances or an interest subsidy to assist with
        carry-on
expenses and livestock purchase may be made to an applicant who is not yet in
immediate danger of losing property or other assets but who, in the opinion of
the
State, is likely to reach that position without such assistance, such cases
being
tested strictly against the remaining eligibility criteria.

   (e)  Where protection orders apply it is desirable to establish a
        relationship with
creditors such that the State is acting in combined interests of applicant and
creditors, secured and unsecured.

(5) Limits
The State shall have discretion to determine:

   (a)  The terms and conditions of any loan made by the State under the
        Scheme.
An initial period of freedom from repayments of principal may be allowed
depending on the circumstances of the case and the interest rate to be
charged.

   (b)  The proportion of debts paid off by advances in any one case.

   (c)  The total advances which may be made by the State in any one case.

   (d)  The level of interest subsidy in respect of borrowings otherwise than
        from the
State under the Scheme.
Part 3 - Farm Build-up

(1) Purpose
To supplement, without discouraging, the normal processes under which
properties
which do not have reasonable prospects of long term viability under existing
and
prospective circumstances are amalgamated with an adjoining holding or are
subdivided and the subdivided proportions are added to adjoining holdings,
or to assist a farmer with a property too small to be economic to purchase
additional
land to build up his property to at least economic size.

(2) Tests of Eligibility

   (a)  The owner of the property to be purchased wishes to sell or accepts
        that the owner
is obliged to sell.

   (b)  The purchaser is unable to obtain the finance applied for on
        reasonable terms
from normal commercial sources.

   (c)  The State is satisfied that the built up property will be of
        sufficient size to offer
sound prospects of long term commercial viability.

   (d)  Where an application is made by an adjoining owner for assistance
        under the
Scheme to purchase an uneconomic property, but there is a possibility of sale
of
the property to another adjoining owner who does not require assistance under
the
Scheme, assistance will be provided only if the applicant's property is not of
sufficient size to offer sound prospects of long term commercial viability.

   (e)  The term "adjoining holding" includes land which is within a
        reasonable working
distance of the farm under consideration where there is no impediment to the
two
or more farms being worked as a single unit.

(3) Nature of Assistance
The provision to the purchaser of finance or an interest subsidy in respect of
borrowings otherwise than from the State under the Scheme

   (a)  to assist the purchase of an adjoining holding or part of an adjoining
holding;

   (b)  to assist with carry-on expenses, plant, stock and property
        development
in respect of the additional land where not available from normal commercial
sources.

(4) Method of Operation

   (a)  The provision of advances or the interest subsidy referred to above
        will only be
made where arrangements have been made for an adjoining owner to take over the
property or for the property to be subdivided and the subdivided parts added
to
adjoining properties. The State may purchase such properties in advance of
arrangements having been made for the property to be added to an adjoining
property or properties where the program of farm adjustment could not
otherwise
be achieved. The State may dispose of such a property on commercial terms
where
the purchaser does not require or is not eligible for assistance under
this Part.

   (b)  Where appropriate, the State could take the initiative to encourage an
        adjoining
owner to purchase additional land where the State is aware that the owner of
such
land wished to leave the industry or accepts that the owner is obliged to
leave the
industry; this applies particularly where it is unlikely that the appropriate
purchaser or purchasers will be able to purchase the additional land unless
the
State provides assistance for the purchase.

   (c)  Since it is required that there must be reasonable prospects of
        successful operation
of the built up property, the State, in considering the transfer price of
land, will
have regard to its productivity value.

   (d)  Where advances or an interest subsidy are made to assist with carry-on
        expenses,
plant, stock and property development, the assistance will be strictly limited
to the
minimum which the State considers is required to enable the applicant to carry
on
and develop the built up property.

   (e)  While any advances by the State in respect of built up property remain
        unpaid,
the transfer of part of the built up property will not be permitted if this
would
result in a property of a size too small to be commercially viable.

(5) Limits
The State shall have discretion to determine

   (a)  The term and conditions of any loan made by the State under the
        Scheme. An
initial period of freedom from repayments of principal may be allowed
depending
on the circumstances of the case and the interest rate to be charged.

   (b)  The total of advances which may be made by the State in any one case.

   (c)  The level of interest subsidy in respect of borrowings, otherwise than
        from the
State, under the Scheme.
Part 4-Farm Improvement

(1) Purpose
To assist the attainment of commercial viability of a farm by providing
financial
assistance to the applicant to improve the effective use of the existing farm
without
adding to its area.

(2) Test of Eligibility

   (a)  The existing farm is not now viable but is of sufficient area and the
        proposed
improvements are of a king as to offer sound prospects of long term commercial
viability if assistance under the Scheme were provided.

   (b)  The applicant is unable to obtain finance on reasonable terms from
        normal
commercial sources.

(3) Nature of Assistance
Advances or an interest subsidy in respect of borrowings, otherwise than from
the
State, under the Scheme to assist with plant and livestock purchases, carry-on
expenses
and further property development intended to restore the economic viability of
the
farm either in the existing form of production or in another form of
production which
may be undertaken in combination with, or completely replace, the existing
form of
production.

(4) Method of Operation

   (a)  Advances or the interest subsidy referred to above made for the
        purposes of this
Part will be limited to the minimum which the State considers is required to
enable
the farmer to achieve the objective of the improvement program.

   (b)  While any advances by the State in respect of improvement for which
        finance is
provided under this Part remain unpaid or during the period that the interest
subsidy is provided, the transfer of part of the improved property will not be
permitted if this would result in a property of a size too small to be
economic.

(5) Limits
The State shall have the discretion to determine

   (a)  The term and conditions of any loan made by the State under the
        Scheme. An
initial period of freedom from repayments of principal may be allowed where
circumstances warrant this concession.

   (b)  The total of advances which may be made by the State in any one case.

   (c)  The level of interest subsidy in respect of borrowings otherwise than
        from the
State under the Scheme.
Part 5-Carry-on Finance

(1) Purpose
To provide assistance for essential carry-on purposes in rural industries
which it is
agreed from time to time between the Commonwealth and a State or States are
suffering a severe market downturn or similar situation (but excluding drought
or other
natural disasters).

(2) Tests of Eligibility

   (a)  The applicant has sound prospects of long term commercial viability
        having
regard to the applicant's asset structure, on the assumption of a market
recovery
to the long term trend.

   (b)  The applicant is unable to obtain carry-on finance on reasonable terms
        from
normal commercial sources.

   (c)  Assistance is merited and the applicant's difficulties are not
        substantially due to
circumstances within the applicant's control.

(3) Nature of Assistance
Advances for essential carry-on expenses or an interest subsidy in respect of
borrowings, otherwise than from the State, under the Scheme for the same
purpose.

(4) Method of Operation

   (a)  In relation to the rural industries referred to in Clause (1) of this
        Part, the
Commonwealth and the State will agree upon the terms and conditions upon
which assistance is to be given to applicants within those rural industries
and the
Commonwealth will thereupon publish a notice to that effect in the Australian
Government Gazette.

   (b)  Applicants within those rural industries who fulfil the eligibility
        requirements set
out above will then apply to the State in their own State for carry-on
assistance.

   (c)  Assistance will be made available at the discretion of the State and
        will be limited
to the minimum which the State considers is required to enable the farmer to
carry
on.
Part 6-Household Support

(1) Purpose
To provide limited assistance to applicants facing conditions of financial
hardship and
who are considering whether to adjust out of farming.

(2) Conditions of Eligibility

   (a)  The applicant must be ineligible for Parts A and/or B assistance.

   (b)  The applicant does not have sound prospects of long term commercial
viability.

   (c)  The applicant will suffer financial hardships which will be alleviated
by assistance under these provisions.

   (d)  The applicant must not at the time of application or whilst in receipt
of household support be also in receipt of unemployment benefits.

(3) Nature of Assistance

   (a)  An advance provided for one year sufficient to raise the applicant's
        estimated
future income from all sources to the level of payment which would be
applicable
to the applicant if the applicant were eligible for unemployment benefits. An
extension for a further two years may be allowed in those cases where the
applicant has made a genuine effort to dispose of the applicant's productive
assets
at a market value acceptable to the State.

   (b)  Where it would take some time to assess an applicant's entitlement,
        interim
assistance may be granted by the State as a loan at a level of payment which
would
be applicable to the applicant if the applicant were eligible for unemployment
benefits, provided there is a prima facie evidence of urgent need and
unavailability
of alternative sources of finance.

   (c)  If the State subsequently determines that the applicant has a viable
        enterprise, the
interim assistance will be regarded as carry-on finance.

   (d)  The carry-on finance would represent part or all of the finance to be
        provided
under a Scheme operative at the time and would be repaid under the conditions
pertaining to that Scheme.

   (e)  If the State determines that an applicant does not have a viable
        enterprise, the
applicant will be eligible for household support assistance, and any interim
assistance the applicant may have received will be regarded as part of
household
support assistance.

   (f)  Advances of household support assistance are to be paid to the
        applicant at
intervals not exceeding three monthly. Prospective income for each period will
be
assessed by the State on the basis of declarations made by the applicant. Each
applicant's income situation is to be reviewed by the State, on the basis of
declarations made by the applicant, when further advances are to be made to
the
applicant.

   (g)  Where an applicant obtains employment or the applicant's income is
        higher than
allowed for by the State when making an advance, the applicant shall notify
the
State and repay any excess household support assistance the applicant may have
received.

   (h)  In the event of the State becoming aware that an applicant has
        received more
than the applicant was entitled to, it may exercise its discretion in seeking
repayment of the excess.

        (i)    At the end of the first period of twelve months for which an
               applicant receives
household support assistance the advances made to the applicant may be
automatically converted to a grant.

   (j)  If the applicant adjusts out of farming within three years of the time
        the applicant
first received household support, any advances made to the applicant and not
already converted to a grant may be so converted by the State.

   (k)  If an applicant does not adjust out of farming within three years
        after first
receiving household support assistance any advances made to the applicant and
not converted to a grant will be repayable to the State, together with
interest
accruing from the commencement of the advance, within a further period of
seven
years.

(1) An applicant who is eligible for household support and who is prepared to
adjust
out of farming may receive in lieu of household support assistance a lump sum
payment to bring total payments received under the household support to
$8,000.

   (m)  For the purpose of these provisions an applicant is regarded as having
        adjusted
out of farming when, in the judgement of the State, the applicant has
effectively
disposed of the applicant's productive resources.

(4) Method of Operation
The assistance will be provided at the discretion of the State.
Part 7-Rehabilitation

(1) Purpose
To provide limited assistance to applicants facing conditions of financial
hardship who
are obliged to adjust out of farming.

(2) Conditions of Eligibility

   (a)  The applicant must be ineligible for Parts A and/or B assistance.

   (b)  The applicant does not have sound prospects of long term commercial
viability.

   (c)  Taking into account the financial position of the applicant after the
        applicant's
property has been sold, the applicant will suffer financial hardship which
will be
alleviated by assistance under these provisions.

(3) Nature of Assistance
An advance of $8,000 indexed to movements in the Consumer Price Index from 1
July
1985. The loan may be converted to a grant at any time by the State.

(4) Method of Operation
The assistance and conditions, if any, will be provided at the discretion of
the State to
applicants who comply with the conditions of eligibility.