Cory Bernardi (SA, Australian Conservatives) Share this | Hansard source

By way of preliminary observation, I take note that the Select Committee on Lending to Primary Production Customers is due to report on 29 November. This is an inquiry that was initiated by Pauline Hanson's One Nation. It was supported by me, representing Australian Conservatives; the coalition; the ALP; and the Nick Xenophon Team. I note that the Greens and Senator Hinch opposed that inquiry, but here we are, weeks before the scheduled reporting date, discussing the Regional Investment Corporation Bill 2017.

By way of acknowledgment, too, I must say that there's no doubt the major banks struggle to understand farmers. I think they struggle to understand the stress they come under during periods of drought and other unforeseen climatic events that affect our agricultural production. The big banks struggle to extend the grace to farmers that they need due to the sporadic nature of their cash flow. There may be one or two exceptions to this rule, but I think it's the stuff of rural legend that farmers always find a way to make themselves scarce when the bank manager comes to visit and that bank managers find their way to make themselves scarce when farmers actually need some money.

But you've got two choices when it comes to markets not working well for everyone. Australian Conservatives support more competition. We believe it's the way to provide the solution to problems such as the one we're confronting. Successive reviews support that aim. We have new banks popping up all the time; they specialise in particular areas and in particular areas of financing, and this is extended into the regions of agricultural production as well. In fact, in the era of the internet there are probably more opportunities to access a variety of loan sources than ever before. If you don't like the service you're getting—I know it's difficult and that it's not as easy as some will make out—there are plenty of alternatives available.

But, of course, there is another alternative solution proffered by many in this place—and I say by too many in this place. When confronted with every single market problem, even if government created the problem in the first place, the answer for these people is to expand the role of government to fix the problem that the government created originally. And so it goes. It was Ronald Reagan, I think, who said that there is nothing as like perpetual life as a government program because they're constantly trying to fix their previous mistakes rather than admit it was a complete disaster, move along and start something else.

This Regional Investment Corporation Bill is no different to that. This is effectively a federal takeover of the distribution of drought relief and financing. In some respects it is back to the future, because we're going back 43 years and reinstating what is in effect the Commonwealth Development Bank. This is not a small-government measure. This is not a measure that is designed to reduce the size, scope and reach of government. In fact, it's quite the opposite. It's engorging government. It's providing even greater authority to the Commonwealth government at the expense of the principle of federation and also at the expense of this whole notion that those closer to the action are better placed to make decisions on that. So it's not a decentralisation measure; it's a centralisation measure. It has all the hallmarks of socialist politics and Keynesian economics. It is, perhaps, also a potential breach of our Constitution, which is something that I will, and do intend to, return to later.

But by way of acknowledgment I have to recognise that some states, like South Australia, which is the state that I represent, have done an appalling job of managing Commonwealth farm assistance. Our farmers there have been crying out for help, but the state government has been too slow, too greedy and too inept to distribute the funding appropriately, and it's been too strict in applying the program—principally I think because it doesn't want to. SA's performance under this regime has been totally appalling.

But the real question I'm going to be interested in seeing the answer to when this bill comes to a vote is the response of the Xenophon team, because the Xenophon team have been pushing for a centralisation of this sort of funding for a very, very long time. He had a private member's bill on this topic, and it was all about the Commonwealth parliament becoming the solution, because that was how he could get a headline down in South Australia. But, now he's recognised his inability to enact this sort of behaviour, Senator Xenophon is ditching the Commonwealth and going back to the South Australian parliament, or intends to do so, because he's got all the solutions there. If Senator Xenophon at one time supported this bill and the centralisation of funding because that was where the Commonwealth could do the most good, my question is: why is he going back to the South Australian parliament and how will he vote on this, given that it is a South Australian responsibility currently?

That brings me to the point which I may share with Senator Xenophon, which is that the government in South Australia is truly hopeless. I actually believe the opposition is truly hopeless too. Minister, that may hurt a little bit, but they are hopeless. The government deserves to lose office, and the alternative government doesn't really deserve to be elected. So I think there is a better way, but the ultimate criterion here is that, if the states are failing at something, it's not for the Commonwealth to step in and pick it up and try to be all things to all people; it's up to the Australian people to get rid of the incompetent state governments, and that takes a strong state opposition to highlight the flaws and the failings of this sort of stuff. If people want a government in South Australia that believes there is prosperity and people outside of Gepps Cross, as the colloquial saying goes, they need to install a government that actually cares—not one that's just going to go through the machinations of getting re-election but one that wants to get proper beneficial outcomes.

So that's my concern. We're being asked to abrogate a number of key principles in this. One is that the Commonwealth government should be limited in its size and scope and growth and reach. Secondly, we are asked to abrogate the principle of federation, that states have particular responsibilities and, whilst the Commonwealth can advance moneys to them, the acquittal of those funds lies with them. If they fail in that, replace the government and get someone worthwhile that can do it.

I also have to be reasonable and say that the intent is to have the Regional Investment Corporation also responsible for $2 billion worth of loans to build water infrastructure, in effect, in the Murray-Darling Basin. At present, the department administers those loans. I know a selling point in some of the lobbying efforts here has been that there would be no additional cost to the Commonwealth; there would be no growth in the administrative capacity of it. But I note the department has already struggled to identify some of those worthy projects that were able to deliver the water savings necessary to attract the funding.

There is a huge question mark, I have to say, about the conduct of some of the responsible entities in regard to the Murray-Darling Basin system. I have repeatedly called for a judicial investigation into it, based on the allegations. I don't believe the states have been honest in this respect. In one in particular, New South Wales, we've seen some preliminary findings, essentially, of corruption and cover-ups. I think there's a whole lot more to come, and it concerns me greatly that some of the people pushing hardest for this legislation are linked to, or have their roots and influence in, New South Wales. I can't put it any other way.

I do not trust the New South Wales government to get it right in water policy, and I don't trust the South Australian government to get it right in the distribution of these loans, but I don't have any more faith in the Commonwealth to be able to do it either. Without knowing what I don't know, I'm not prepared to suspend my principles and the important values that I think have built the differentiation of powers in order to satisfy the demands of a few.

Finally, I want to put into context the constitutional approach that this may raise. The Australian National Audit Office observed in April last year that, on the constitutional basis of this corporation, there was an:

… absence of specific legislative powers to enable the Commonwealth to deliver concessional loans directly to farming businesses …

So:

… under each concessional loans program funds were loaned to the states and the Northern Territory … to establish schemes to provide loans to eligible farming businesses …

I believe that that is the appropriate mechanism and should continue. I'm concerned that this regime may be setting up a constitutional challenge, despite relying on the broadly interpreted corporations power, and ultimately may cause more problems than it purports to solve.

This regime may indeed get through. I, and on behalf of the Australian Conservatives, have severe concerns about it. I'm not convinced it is the right approach to the age-old challenge of farm financing.