As the federal government seeks to tighten spending, there is pressure from Labor and the Nationals to shore up jobs in regional areas.
Treasurer Joe Hockey is resisting pressure from the Nationals and Labor to provide extra help to rural and regional industry.
As Victorian Labor turned up the heat on the federal government on Monday by pledging $30 million for fruit processor SPC Ardmona if it wins the November state election, Agriculture Minister Barnaby Joyce urged Mr Hockey to consider the plight of farmers facing prolonged drought.
Seventy per cent of Queensland is in drought and much of central northern NSW has had well-below average rainfall for the past two years.
Mr Joyce is preparing a plan for cabinet to overhaul drought assistance, which some rural lobbyists say should include a new rural development bank.
He said the coalition’s budget constraints made it extremely difficult to secure a scheme as generous as previous packages.
Mr Hockey said Mr Joyce was appropriately looking at assistance programs and cabinet would discuss his findings.
Opposition Leader Bill Shorten, who visited SPC Ardmona in the Victorian town of Shepparton on Monday, said the government was showing every sign of giving up on regional areas.
But the treasurer said the issues of drought assistance and funding for industry should not be conflated.
“The difference between a drought and what’s happened at SPC Ardmona or any one-off grant is the fact that a drought, at its worst, is a complete natural disaster,” Mr Hockey said.
Appropriately, state and commonwealth governments worked together to help those affected by natural disasters.
Mr Shorten, who stood with Victorian opposition leader Daniel Andrews as he made his $30 million pledge, said the Abbott government was showing a lack of leadership.
“Tony Abbott needs to start fighting for Australian jobs,” he said.
The Australian Chamber of Commerce and Industry said it was not the role of government to prop up private industry.
The chamber’s chief economist Burchell Wilson says the government was right to refuse to subsidise struggling businesses.
“The onus should be on those businesses to restructure and improve their profitability.”