Drought support for communities is up to state government

Earlier this month the federal government unveiled a new drought assistance package with new loan products for farmers and agricultural-reliant small business, as well as hundreds of millions of dollars in direct investments for local government initiatives and infrastructure.

Yet mayor Donald said it's now up to the state governments to do their part, including covering the cost of local government rates and payroll tax for small businesses and farmers.

"What in my opinion is needed, is as things progress and get worse is not loans but grants so that people have money to use to continue to operate their properties and don't incur extra debt by using that money," he said.

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"The whole thrust of the federal government has been loans, and loans are a revenue neutral as far as a budget is concerned because they know that they will get them back in.

"Whereas grants when they're paid out, they don't get them directly back in."

Councillor Donald said the previous interest rate subsidies for exceptional circumstances was a way to help people pay their interest or continue their operations, and said rate relief was a "straightforward" method to free cash for those already doing it tough.

"I think as far as rate relief to councils is concerned, it's a very easy straightforward way to give people some cash to use if they don't have to pay a rate instalment," he said.

"They immediately have that money freed up to use for other things and if the state government or the federal government provide that money to the council to supplement that rate payment, the councils aren't out of pocket and the ratepayer has that money freed up to use for other things.

"Cash is whats needed in these situations, the same with the bushfires, cash is what's needed for people to spend on the essentials and not incur extra debt.

"A lot of that money then flowed back through the small businesses anyway."

In 2018 the NSW government announced a NSW Emergency Drought Relief Package to help farmers manage the effects of the current drought.

The package includes $100 million for cutting the cost of farming fees and charges including the waiving of Local Land Services (LLS) rates for 2019.

"The state government have paid that money to Local Land Services to free property owners from LLS rates. So it can be done, but its only at this stage been done for LLS rates," councillor Donald said.

Federal Drought Minister David Littleproud has written to state governments asking the premiers to cover the cost of local government rates and payroll tax for small business and for farmers.

"(States) own those responsibilities at a state level. And we're saying there's an opportunity for them to step up with us and make big and significant contributions to these local economies, and particularly when you look at the meat processing sector," Mr Littleproud said.