Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Hansard source

I rise to speak on the Regional Investment Corporation Bill 2017. The Labor Party opposes this bill to establish another boondoggle, a pork barrel, by the Deputy Prime Minister and minister for agriculture. The purpose of this bill is to establish an organisation to do something the states and the Northern Territory are already doing. The RIC will administer farm business loans and, on behalf of the Commonwealth, administer grants of financial assistance to the states and the Northern Territory for water infrastructure projects and concessional loans from 1 July 2018. But the loans that have already been delivered by the state and Northern Territory governments will continue to be administered by the states and the Northern Territory. The government is claiming that establishing the RIC will put competition on the banks to provide better support to farmers doing it tough. But this is already happening by the delivery of concessional loans by the state and Northern Territory governments.

The government is claiming that establishing the RIC is a logical step in meeting the government's commitment to agriculture, which, as set out in the landmark agricultural competition white paper, is in excess of $4 billion. This statement is exaggerated and gives the impression that the government has provided meaningful investments to agriculture. The bulk of the $4 billion is made up of concessional loans that farmers were not taking up. It is important to note what the government's failed white paper stated about its new drought concessional loans scheme:

The Government recognises the need to provide in-drought business support that is also fiscally responsible. That is why we will implement a new drought concessional loans scheme with a loan fund of up to $250 million per year over the next 10 years starting in 2016-17.

The new drought concessional loan scheme has been poorly taken up. This is because of the design of the program. The government failed to properly consult or to understand if their new drought loans would be attractive to drought affected farmers. They weren't.

The RIC will face the same difficulties. Its role will be to provide loans to farm businesses subject to the applicant meeting certain criteria. The 'subject to the applicant meeting certain criteria' will be centred on the viability of the farm business. It is important to understand that the RIC—the so-called 'Barnaby's Bank'—will be the bank of last resort, but the farm business will need to be assessed as being viable. Whether a farm business is deemed or determined as being viable has been a major issue for the states when developing the guidelines for concessional loans, and this will continue under the RIC.

Further, the concessional loans are only for a period of 10 years. Post the 10 years, the farm business will need their bank to agree to take them back on their books. The bill states that the RIC can consult with commercial lenders and other bodies representing loan applicants. It can determine the terms and conditions for the farm business loans in accordance with the strategies and policy determined by the board and take security of the loans. But the security will only be for 10 years, and the commercial lenders will have to agree to take back the farm business before the RIC will be able to take security of the loan.

It is difficult to see how the commercial lenders will be satisfied by the government's proposal to broaden the loans to draw on constitutional authority that includes the Commonwealth's trade, commerce and external affairs powers. The government is claiming that the RIC loans will not be the same as those currently offered through the states. One could also draw the conclusion that the new loans are also no longer going to be fiscally responsible, as was stated in the government's failed ag white paper.

The government has not undertaken any genuine consultation about the functions and responsibilities of the RIC. The government is establishing the RIC in Orange with no cost-benefit analysis about the ongoing costs. It has again chosen to establish the RIC in Orange using the same type of government policy order used to relocate the Australian Pesticides and Veterinary Medicines Authority to Armidale, in the Deputy Prime Minister's own electorate. The GPO, the government policy order, used to give effect to the minister's APVMA pork-barrelling to his electorate of New England has been investigated by the Senate Finance and Public Administration References Committee. It found that the GPO used to relocate the APVMA to Armidale is flawed and should be revoked.

The committee also recommended that the finance minister should apply greater scrutiny to future requests for orders to be made under the Public Governance, Performance and Accountability Act 2013, with specific focus on consideration being given to the following: the financial and governance implications on an agency from an order under the Public Governance, Performance and Accountability Act 2013; and a cost-benefit analysis. In the event that the cost-benefit analysis does not identify a net benefit from the proposed order, the finance minister should require the relevant minister to explain the grounds on which the order should be made.

The Senate committee's report into relocation of APVMA also heard evidence provided by key scientific, industry and agricultural stakeholders about their real concerns about the loss of expert regulatory scientists, but their voices have been totally ignored by the Deputy Prime Minister, Mr Barnaby Joyce. This shows the government either doesn't get it or doesn't care. The Deputy Prime Minister has continually declined to say what degree of declining agricultural productivity he would be prepared to accept in exchange for moving the agency to his northern New South Wales electorate. Apparently the RIC will be the panacea for the agricultural sector, with the Deputy Prime Minister claiming:

The RIC will also help fast-track the construction of dams and priority water infrastructure projects needed to stimulate investment, economic growth and increased agricultural productivity in rural and regional communities.

This is a ridiculous statement, and anyone who believes this statement is living in the twilight zone.

As stated earlier, Labor is opposed to the bill. Labor will put forward a number of amendments to strengthen the bill. In the House of Representatives the government acknowledged that their bill was lacking in scrutiny and put forward amendments to increase the size of the RIC board. The government and the Senate should further strengthen the bill by supporting Labor amendments.