IN response to a broad-ranging review of the Rural Financial Counselling Service (RFCS), the federal government has decided against making recommended funding cuts.

A report on the National Rural Advisory Council’s (NRAC) review was tabled last November with its top recommendation saying the government should continue funding rural financial counselling services.

However, the review also said RFCS program funding – $73 million for the 2011-15 grants funding period – should be reduced by approximately 20 per cent.

Today, Agriculture Minister Barnaby Joyce said the government supported NRAC’s recommendation to continue the free service but would not support the 20pc funding cut.

“The RFCS provides a critical service to our farming communities, especially during tough times like periods of drought”“The RFCS provides a critical service to our farming communities, especially during tough times like periods of drought,” he said.

“This is why the Coalition government will maintain budgeted levels for the service.

“We have listened to feedback from current RFCS service providers and other stakeholders on the NRAC review and it’s very clear there are different requirements for this service across regional Australia.

“The Coalition therefore does not support a mandated single service provider model for each State.

“I felt it was particularly important that the different needs of different regions continue to be reflected in the future program.”

“It’s important the different needs of different regions continue to be reflected in the future program”Mr Joyce said the government would also support NRAC’s recommendation that small forestry businesses have access to the RFCS. He said they would now be included as part of the service under the next funding round on the same basis as other rural businesses.

Mr Joyce said the government would also offer the 14 current service providers an extension of their current contracts to December 31, 2015 to allow the government time to implement some changes recommended by the NRAC, “in a considered manner ahead of the next funding round”.

“The RFCS has been a vital part of the rural landscape for the past 30 years and during that period the service has evolved and changed to reflect the times,” he said.

“The government is committed to supporting the service well into the future so that it can continue its important work.”

The RFCS program provides grants to state and regional organisations to provide free rural financial counselling to primary producers, fishers and small rural businesses suffering financial hardship but have no alternative sources of impartial support.

The review announced in May last year considered the program’s effectiveness, current structure and future role, eventually making 41 key findings and 33 recommendations.

In response to the report, the government said it had accepted 26 of NRAC’s 33 recommendations in full and another four, in part.

The report showed NSW had the most (3181) RFCS clients for 2013-14, followed by Victoria (1654), Queensland (1338), SA (710), WA (597) and Tasmania (151).

“NRAC believes there has not been adequate adjustment in RFCS program funding to reflect changes in localised or regional need for the service,” the report said.

“Throughout consultations, NRAC observed that some services had excess capacity of resources at present. There is an element of ‘mission creep’ that has occurred over time.

“This has seen the types and level of assistance provided by some service providers, generally when seasonal conditions are good, become more in-depth, time consuming, less related to issues of hardship and, in some cases, provided to clients not experiencing financial hardship.

“In addition to excess capacity, NRAC has made a series of recommendations that should result in considerable gains in service efficiency.”

The executive summary said it was difficult to quantify the efficiency gains achievable and the level of under-use of the service, but NRAC “general observations” suggested savings could be in the order of 20pc of total program funding.

“However, NRAC acknowledges it may take time to realise efficiency gains and there must be no significant, short-term impact on service delivery,” the report said.

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