Nick Xenophon (SA, Nick Xenophon Team) Share this | Hansard source

In broad terms, the Nick Xenophon Team supports the second reading stage of the Regional Investment Corporation Bill 2017. We believe that there is real scope and real benefit in having a regional investment corporation. I have long advocated that we ought to have a revival of the Commonwealth Development Bank, something that was established in 1960 by the Menzies government. It was a mechanism to prevent the feast-and-famine cycle for farmers that Senator Reynolds referred to, the boom-bust cycle of agricultural communities where a drought, adverse crop conditions or adverse weather could hit the cash flow of a farmer. The Commonwealth Development Bank was there for a number of years to actually provide some certainty and stability for rural communities.

I'm looking at an article headed 'The role of the Development Bank in rural credit' by Warren D McDonald. It was from a talk given to the Victorian branch of the Australian Agricultural Economics Society in July 1960, when the Commonwealth Development Bank had just been established. The sorts of things that Mr McDonald discusses in that article are very much the sorts of issues that are being raised here. There are agricultural businesses that can't get finance through conventional means but can still turn a profit and be a good investment, but commercial banks, for whatever reason, won't provide finance because of the boom-bust nature of regional businesses of agricultural endeavour. That bank was wound down—I think by the Keating government in the early 1990s—which was a mistake.

This bill establishes the Regional Investment Corporation, which has many shades of the Commonwealth Development Bank. It will deliver up to $2 billion of Commonwealth farm business concessional loans and the $2 billion National Water Infrastructure Loan Facility. It will streamline the administration of farm business loans and deliver national consistency in ensuring that loans prudently and speedily assist farmers in need.

The benefit of this, given the difficulty that agriculture businesses have in getting finance, will be considerable. There obviously need to be appropriate transparency and accountability mechanisms within this bill—that is important. As my colleague in the House of Representatives, the member for Mayo, Rebekha Sharkie, touched on during the second reading debate, we are supportive of the measures in this bill to give control of the Farm Business Concessional Loans Scheme to the Regional Investment Corporation. This could have been done without legislation, but it is much better that it have a legislative framework: it is something we can build from. The Australian Labor Party under the Rudd-Gillard governments had legislation for the Clean Energy Finance Corporation and for ARENA. They were about providing support for clean energy on the basis that conventional finance might not be supportive or give that certainty of investment but clean energy would still make money in the long term, so it would not cost taxpayers any money. The CEFC and ARENA would provide that finance. I see the Regional Investment Corporation as being consistent with the principles of the Clean Energy Finance Corporation and, before that, the Commonwealth Development Bank.

I will touch on an issue that I have been discussing with the government. I support water infrastructure projects, providing, of course, they do not in any way impact on the Water Act, on the sustainable diversion limits or on the framework of the Water Act. That is something that is quite axiomatic. I don't think there's any disagreement from the government. We have a Water Act. It's very important that there be consistency of purpose and that any water infrastructure projects do not in any way impact adversely on the Murray-Darling Basin Plan. It's something that was fought hard for, that has been dealt with through COAG and that basin states have signed up to. I'm having discussions with the government to ensure that there are appropriate and clear safeguards to make it abundantly clear that the Water Act has a paramount role. The government's argument might be that it would in any event, because it can't be trammelled by this legislation, but it would give me and, maybe, many others comfort that we have consistency of purpose, so that any water infrastructure projects do not in any way impact on the Water Act. I think that's something that Senator Ruston and the government generally do not take issue with. There is some scope for some greater clarity in relation to that.

So in those terms I indicate that I and my colleagues are supportive of the second reading of this bill being passed. We believe that this will do a lot of good in regional communities around the nation. It will mean that farmers who couldn't get loans from the big four banks or other banks can get loans. The loans will still be paid back. They won't cost taxpayers any money but will kickstart regional communities, which will mean that rural communities will be able to thrive and be more viable. There are committee stage amendments from the Labor Party that will make all these measures disallowable instruments. I have serious concerns about that but will talk about that later. My colleagues and I support the second reading stage of this bill.

Debate interrupted.