Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Hansard source

I say to the member for Riverina: I am very confident I will get it back. If the member for Corio is borrowing some money off me and the interest rate is two per cent, the cost is the interest rate, not the value of the loan. It is not the $100. The government is including in its white paper the total value of all these loans—hundreds of millions of dollars. That is if they are ever lent out, and, given what I have just said, they are not going to be lent out—and we hope the drought recovery loans are not going to be lent out, because it would mean that our people are going to be in drought for another 10 years. That is what it would indicate. But the government has taken the total value of the loan, rather than the cost of delivering the loan, over a 10-year period, and it ends up with a very big number—very, very clever.

But, to make it worse, the bond rate now is still just over two per cent, so the government is borrowing money at just over two per cent and it is lending money out, depending on which concessional loan scheme we are talking about, at somewhere between three and four per cent. You do not have to be a mathematician to work out that this is a win situation for the government. That is a little bit cute of me, because there are other costs. There are provisions for doubtful loans—obviously the government might not get some of this money back—and there are also administrative costs. But the cost of delivering these loans for government is very, very low.

To further exacerbate the problem, the last tranche of loans has still not been rolled out in some states. Why? Because the Commonwealth are insisting that the states pay for the administrative costs of the loans, at least in part. Have a think about that. Different state governments invest varying amounts of money in their own drought assistance programs. The Commonwealth are coming along and inflating this big figure, saying, 'We've got $720 million we're going to give away to farmers,' basically, but they do not tell us that they are borrowing at two per cent and lending at three per cent. Then they impose the administrative costs of delivering the loans—that is, those which are taken up—onto the state governments.

I struck this same problem in the period I was Minister for Agriculture, Fisheries and Forestry. We were still then trying to implement the farm financing loans, and I struck the same thing. A number of states had not been signed up. With the stroke of a pen, I said: 'This is ridiculous. Let's just pay the admin costs for the states and get this money out into the pockets of the farmers, where it is needed.' Now people have been suffering three years of drought, but, no, that is not what is happening, particularly in Queensland—

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