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| Exceptional Circumstances Interest Rate Subsidy (ECIRS)
To apply for the third round (Year 2 Tranche 3) of applications (from 1 April 2009 to 24 September 2009) and the fourth round (Year 3 Tranche 4 from 25 September 2009 to 30 April 2010) go to Submitting an Application.
*The Federal Minister for Agriculture, fisheries and Forestry, Tony Burke announced on 12 February 2009 an extension of the Exceptional Circumstance (EC) declared areas of Tasmania to 30 April, 2010. This includes Flinders Island and the previous EC declared area of the Central Midlands and the East Coast but excludes the North East area of mainland Tasmania and Clarke and Cape Barren Islands which expired on 31 March 2009. Eligible primary producers and small businesses in the extended areas will continue to receive EC Relief Payments and be able to apply for interest rate subsidies for the extended term.
Purpose of ECIRS Support
Who Can Apply?
Duration of the Support
What is the Closing Date for Applications?
Is there an Assets Test?
How much is the Subsidy?
What if the EC Declaration is Extended?
Other Conditions
Submitting an Application
The ECIRS scheme provides interest subsidies to eligible Tasmanian farmers and small businesses severely affected by drought. The scheme is funded by the Australian and Tasmanian Governments and administered by Tasmania’s Department of Primary Industries, Parks, Water and Environment (DPIPWE). To receive support, applicants must meet criteria determined by the Australian Government.
The purpose of the support is to assist eligible farm businesses and agriculture-dependent small businesses (including small businesses reliant on farmers as clients) that are considered viable in the long term and are in financial difficulty due to the drought. The support will facilitate one or more of the following strategies:
| Eligible farm businesses | Eligible small businesses | | | - The provision of carry-on finance
| | - Improvements in productivity including for recovery purposes
| - Improvements in business viability
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The ECIRS scheme is open to any farmer whose farm business is located in an Exceptional Circumstances (EC) Declared Area of Tasmania, ORany small business that derives at least 70% of its normal total business turnover from supplying goods or services for farming activities in EC declared areas of Tasmania, OR
any small business operating in a town or locality located in an EC declared area of Tasmania with a population of 10,000 or less, able to demonstrate a significant downturn in income due to the business’ reliance on farmers as clients.
To be eligible, an applicant must satisfy DPIPWE that under normal circumstances he/she has a viable business and: - contributes at least 75% of his/her labour to the farm business, derives at least 50% of his/her income from farming, and has been a farmer for at least two years; OR
- contributes at least 75% of his/her labour to the small business (or the small business and a farm business), derives at least 50% of total business turnover from the small business, and has operated the small business for at least two years.
To receive support, eligible applicants must also satisfy a set of Assessment Criteria.
ECIRS support is available for the duration of the EC declaration. However, eligibility must be assessed for each consecutive twelve-month period of the declaration (EC Year), or part thereof, and the support is only available for up to twelve months in respect of each application. Support in one EC Year does not guarantee support in a subsequent EC Year, and an applicant who did not receive support in one EC Year may be eligible for support in a subsequent EC Year.
The closing dates for applications are:
Round 1 (First year Tranche 1) – Closed 22 October 2008
Round 2 (Second Year Tranche 2) – Closed 28 April 2009
Round 3 (Second Year Tranche 3) – Closes 22 October 2009 (includes 28 day grace period)
Round 4 (Third Year Tranche 4) – Closes 28 May 2010 (includes 28 day grace period)
Yes. The applicant must have disposed of all non-essential farm/small business assets on commercial terms and applied the proceeds to the business, except where this would result in extreme financial hardship to the applicant. The net value of the applicant’s non-farm/small business assets must not exceed $750,0001 , excluding bona fide insurance and superannuation investments.
1 Valid to 30/06/2010
The maximum subsidy is 50% of the interest payable on eligible farm/small business debt in the first EC Year (Round 1), and 80% of the interest payable for each subsequent round on a pro-rata basis. The subsidy shall not exceed $100,000 per eligible farm/small business in any EC Year. Subject to these limits, an applicant who has successfully applied for an interest rate subsidy may, within the final three months of the same EC Year, apply for a further ‘top-up’ interest rate subsidy on additional debt incurred since the date of the previous application to finance carry-on expenses during the remainder of the EC Year.
The actual amount of support will be determined by DPIPWE from budgets that make due allowance for financial demands on the business appropriate to the exceptional circumstance. The support may be made to the lender, or to the farm/small business.
Applicants should note the following additional conditions of ECIRS support:- Loans supplied by a commercial institution, vendor or by private arrangements, must be provided on commercial terms at arms length, and the interest rate charged by the lender must be appropriate to the type of loan(s) being subsidised.
- Any commercial borrowings already subsidised by the Australian or Tasmanian Governments will not be considered for support.
- Where a farm business has purchased a property since the EC declaration, the purchase price will be deducted from the level of commercial borrowings to be supported in an initial application, unless the purchase was made more than 12 months prior to the date of the application.
- Where a small business that derives at least 70% of its income from supplying goods and services to farm enterprises has purchased capital since 7 November 2006, or any other eligible small business has purchased capital since 25 September 2007, DPIPWE may deduct the purchase price from the level of commercial borrowings to be supported in an application.
- Applicants receiving other support under the Commonwealth Rural Adjustment Act 1992 may also be eligible for ECIRS support. DPIPWE will take this into account in determining the amount of ECIRS support.
- An applicant who owns, leases or operates more than one eligible business (be they farm businesses or small businesses) is eligible for not more than one interest subsidy on the commercial debts associated with the applicant’s businesses.
Round 3 (Second Year Tranche 3) – Opens 1 April 2009 and Closes 22 October 2009 (includes 28 day grace period)
Applicants who applied for the Round 2 (Second Year Tranche 2) of assistance covering 25 September 2008 to 28 April 2009 will need to complete one of the following forms in order to reapply for the Tranche 3 of assistance:
Round 4 (Third Year Tranche 4) – Opens 25 September 2009 and Closes 28 May 2010 (includes 28 day grace period)
Applicants who applied for Tranche 2 and 3 of assistance covering the period 25 September 2008 to 24 September 2009 will need to complete one of the following application forms to reapply for Tranche 4 of assistance:
All applications must include updated Lender Certificates (as necessary) and be forwarded to:
ECIRS Applications
Department of Primary Industries, Parks, Water and Environment
GPO Box 44
HOBART TAS 7001
If you require further assistance, or a printed application form, please contact the Department of Primary Industries, Parks, Water and Environment on 1300 368 550 (local call cost) or email drought@dpipwe.tas.gov.au
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