Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to 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.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Regional Investment Corporation Bill 2017. I'd like to start with the bits of the proposed legislation that sound, on face value, to be what the Greens should be able to support. The primary function of the proposed Regional Investment Corporation is to administer business loans to farms and to finance water infrastructure projects. In and of themselves, these sound like two decent propositions. But, when you look closely and read the fine print of what's included in this legislation, it is clear that the bill isn't anything so simple. It's very clear that this bill shouldn't be supported—that it would be setting up, basically, another dodgy slush fund for the corporate mates of the government.

With regard to loans to farmers, there's a long history of government lending to farmers, supporting them in times of financial distress, and, in some cases, providing an alternative to the predatory behaviour of the big banks. Most importantly, the government has the ability to step in in times of drought, which is an absolutely critical role in an age where we can see droughts becoming more prevalent and harsh and affecting more of the country. Given the impacts of climate change, with global warming affecting our country, and given the lack of action by this government on addressing global warming, it is to be expected that, very sadly, we will continue to see more extreme and more frequent droughts.

So, with the power to administer business loans, the Regional Investment Corporation looks, at first glance, to be set up to facilitate these loans to farmers in a timely manner. However, first glances can be very deceiving, and I'll come to these deceptions later.

It is clear that, with regard to lending by banks, there is a political appetite for reform. The 2016 inquiry into the failure of loans provided by banks uncovered yet more dubious conduct by the banks, including banks not providing property evaluation documents to farmers, and banks charging unreasonable fees for compulsory property valuations, re-evaluating farms to engineer mortgage defaults and using single organisations that are known to undervalue properties.

The Greens agree with both the government and the Australian National Audit Office that there have been problems with the existing arrangements for the government's concessional loans programs and that farmers haven't been able to access the loans as easily as would be preferred. We also acknowledge the submission of the National Farmers' Federation during the committee inquiry into this proposed bill, which was supportive of the bill, stating that there is hope in the farming community that the lag between political announcements about farm business loan programs and the actual delivery will be significantly shortened. Thus, during tough seasons, a streamlined and centrally-administered farm business loan program could prove vital to farmers across the nation.

However, the bill being proposed by the government is far from the solution. On the one hand, yes, we've got a problem. But it's a very different question as to whether the proposed solution is the best thing to meet that problem. The answer to this egregious, predatory behaviour by the banks is not to give unfettered power to a minister without parliamentary or even cabinet oversight.

The Greens are concerned that, in setting up this Regional Investment Corporation as proposed, the minister has complete discretion as to the creation of the operating mandate and the classes of loans that the Regional Investment Corporation will supply to farm businesses. And there is very little in the legislation to guide or to limit these decisions. We are also seriously concerned about the ability of the Regional Investment Corporation, through a disallowable instrument, to create totally new classes of loans, not currently contained within the legislation. This is a radically new and dangerous idea—that the minister responsible for a government corporation should have such a wide-ranging ability to change its operational objectives, the very objectives of the corporation, with very limited parliamentary or cabinet oversight. It is putting far too much power in the hands of one minister.

A second function of the Regional Investment Corporation is to administer, on behalf of the Commonwealth, financial assistance for water infrastructure projects that are granted to the states and territories prior to the enactment of the Regional Investment Corporation Act. Alarmingly, this bill would also allow the minister to have the power to direct the board to fund specific water infrastructure projects without any requirement for a cost-benefit analysis, without any environmental impact statement and without any conflict-of-interest considerations for the minister. This is an obscenely unaccountable way to do infrastructure development, and it would put both the financial solvency of the Regional Investment Corporation and the health of our waterways seriously at risk.

We have already seen, as we have evidence of it from this government, what happens when too much power is held by a few select ministers when it comes to the water of the Murray-Darling. In the light of this, we would be going completely in the wrong direction if we were to give a partisan person like Minister Joyce further power to administer something as critical as water infrastructure and to direct investment in water infrastructure. He is a minister who has seemingly been incapable of tackling issues such as the proven water theft from the Murray-Darling Basin.

We also understand that the bill would allow the minister to propose the preferred location for the corporation. Minister Joyce stated in May that he intends to locate the Regional Investment Corporation in Orange, which is, of course, bang in the middle of the seat that the New South Wales Nationals lost to the Shooters, Fishers and Farmers Party at the 2016 by-election. We believe that this, in itself, is an indication of how the minister intends to use this corporation—as a facility to pork-barrel resources to the electorates that suit the political objectives of the Nationals rather than the policy needs of farmers. We cannot support this, and any parliament or government that is concerned about having an objective assessment of such critical decisions, including where a corporation should be situated, should not support the minister having the unfettered ability to direct where the location of the corporation is going to be.

But this is par for the course. We've already seen Minister Joyce, in the case of the Australian Pesticides and Veterinary Medicines Authority, disregarding a negative cost-benefit analysis and deciding to go ahead and shift the APVMA to Armidale, in his electorate. He has shown how comfortable he is with pork-barrelling, moving an entire agency into his own seat to shore up support in that seat. We have seen what the result of that has been. We have seen the decay in the institutional capacity of the APVMA. There has been an absolutely dreadful decline in the approval of new pesticides, animal medicines and other agricultural chemicals. That's what happens when you give such unfettered power to a minister—the minister has the power to make decisions that aren't in the national interest; they are in the political interest of that minister. Giving further unfettered power to any minister, let alone the current minister, will essentially allow him to direct financial spending wherever he thinks it's most needed and to serve his political agenda rather than the needs of farmers doing it tough. Not only that; given that the operating mandate is not disallowable, relevant ministers will be able to change the corporation's direction without parliamentary agreement. That's not democratic; that's not transparent. That is giving ministers a mandate to do backroom deals that serve their political agendas at the expense of farmers who need help. But, 'Oh well, sorry. You don't live in an area that is going to serve a minister's politically expedient needs.'

The Australia Institute has rightly expressed its concern about the explicit power that the bill provides to the responsible ministers over the recipients and the terms of the loans. Very substantial aspects of the corporation's lending activities would be at ministerial discretion. This creates serious risks of politically directed spending without rigorous oversight or analysis. Of course, this is familiar too. This is exactly the criticism—quite justified and serious criticism—of the government's proposed Northern Australia Infrastructure Facility. The government has form in setting up these financial institutions to fund projects that are going to serve their political interests and serve the interests of their corporate mates. We see it across the board from this government. They create unaccountable entities which are stacked with ex-lobbyists and industry interests and they avoid any trace of transparency and accountability.

We expect that the government, in their contribution to this debate, will raise the Clean Energy Finance Corporation as a reference point. Because, yes, the CEFC creates its investment mandate by legislative instrument. But it's really important to note that the CEFC has much clearer parameters in its policy objective, on the classes of investments that it's eligible to fund and, unlike this proposed Regional Investment Corporation, there is absolutely no ability for the minister to direct resources to a specific project. As written, the Regional Investment Corporation would be legislated almost entirely by non-disallowable delegated instruments.

Finally, the Greens are still unclear on exactly what policy objective the minister is trying to meet with the creation of this corporation. We would welcome further measures to streamline the existing farm business concessional loans programs. There is a problem there and it does need to be solved, but the powers of this proposed Regional Investment Corporation are far too wide ranging and much too compromised by the heavy touch of the minister for us to be able to support this bill. So, given all of these programs, the Greens will not be supporting this bill and we'll be encouraging the government to return to the drafting table to create something that will actually help our farmers who are doing it tough, rather than the political objectives of the government.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

The Greens and Labor are opposing this bill. What a surprise! Senator Rice said that we've got to act on climate change. It's amazing that when Senator Macdonald asked Dr Alan Finkel, 'If we stop all our emissions in Australia, at a huge cost and a huge sacrifice for business, what difference will we make to the world?' The answer was: virtually nothing. So we go down this road that Australia's going to change the world with our CO2 emissions—no, we're not. We're going to have virtually no effect whatsoever.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Talk to your farmers.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I talk to our farmers every week, Senator Rice. I talk to farmers a lot more that you do; I can assure you. You're the people who want to ban live exports; let's take away the income of the farmers. Look what happened under Senator Ludwig, the then minister, and Prime Minister Gillard when they banned live exports. What effect did that have on the beef industry? It was a devastating effect. That's why they need to be able to access cheap loans, and that's what this is about. When you get into government, you destroy the viability of the beef industry. That's something you should be totally ashamed of. Then you wonder why you have to have some sort of loan structure to keep these people on their properties, feeding Australians and feeding millions of people around the world.

The Regional Investment Corporation is a good plan. It will administer the $2 billion farm business loans program, and the $2 billion National Water Infrastructure Loan Facility. We know the Greens will oppose any dams, because there might be a frog habitat there. To say that a minister with the stroke of a pen can say, 'This is where we're going to build a dam' is absolute rubbish. You have state EPAs. Environmental protection plans must be put in place. There is the whole green tape. You just can't say, 'We're going to build a dam there tomorrow.' You know it doesn't work like that, Senator Rice. That's just crazy to say that here in the Senate.

The Regional Investment Corporation will be governed by an independent board and a CEO with relevant commercial experience to effectively manage public funds, and it will be fully funded from the interest payments on Commonwealth loan schemes. The board will comprise a chair and two members. Members will appointed based on their appropriate qualifications, skills or experience in a range of fields, including agribusiness; banking and finance; water infrastructure planning and financing; rural industries and regional communities; economics; financial accounting and auditing; government funding programs; and law. It will be located in Orange and will be fully operational by July next year.

What a good thing it will be to have it in Orange, in the central west of New South Wales, close to most of the western area. The National Party's Ian Armstrong, as agriculture minister, shifted the New South Wales department of agriculture from Sydney to Orange. Why would have you 400 people working in Sydney in the department of agriculture? You should move it out to an agricultural area. Since then, the city of Orange has never looked back. No longer will the Commonwealth have to barter with the state government to process drought and dairy concessional loans to help farmers. This will be a one-stop shop. With the Regional Investment Corporation, the Australian government will be able to deliver the support to farmers in need and cut out the middleman.

The government has a 10-year commitment to farm business concessional loans. It offers access to the time limited farm household allowance during periods of financial hardship, and an increased deposit cap of $800,000 for the Farm Management Deposits scheme—and I'll come back to that later. Since 2013, $764 million in farm concessional loans have been approved for over 1,400 farm businesses. Not only that, because the interest rate is very low on these loans, the government has kept the banks honest and provided some good, honest competition in offering cheaper loans to farmers. Offering loans through the states lacks consistency because the government has to negotiate separately with each state government to change an existing arrangement or roll out a new program to farmers. The loans offered through the Regional Investment Corporation will boost productivity and cash flow and provide lasting benefits for rural and regional Australia, something those opposite simply do not care about.

Water and water infrastructure are vital for the regions. I look at dams up my way, like Pindari dam, just east of Ashford, and Copeton dam, not far from Inverell, which were built for irrigation and farmers downstream. The gross value of farm production is estimated by ABARES to have reached a record $62.8 billion in 2016-17. And what's more, it's sustainable. It's not like mining where you take the resource out of the ground, clean it back up and put it back to agricultural land. Agriculture goes on forever. Agriculture is now the largest contributor to GDP growth and is a fast-growing economic sector. It contributes 0.5 percentage points to the national total of 1.9 per cent growth. It grew the fastest of the all the 19 industries in 2016-17, increasing by 23 per cent. That's how good agriculture is going.

Agriculture contributed over $50 billion in exports last financial year, just under 14 per cent of our total goods and services exports. That's an increase of $9 billion from the five years previous. This government, and in particular Minister Joyce and former Minister Robb, worked hard to develop markets overseas to give our producers new avenues to sell their produce. Free trade agreements with China, Japan and Korea are working well.

We can see the benefits now flowing into rural areas, like the record wool prices. Why? We used to have 180 million sheep in the late eighties and early nineties. We have now gone from 180 million sheep back to about 70 million sheep. We have picked up the markets for our beef, and the beef price is showing that, likewise with our mutton and lamb. Take the wine industry, for another example. Australian wine exports are forecast to top 800 megalitres with a value of more than $2.5 billion in 2017-18, with strong demand in China and the United States. Australian wine producers have enjoyed excellent outcomes under the China-Australia Free Trade Agreement, with exports to China increasing from $364 million in 2015 to $516 million in 2016.

I make a point about Landcare here. Landcare is a real winner. This government has invested more than $1 billion for phase 2 of the National Landcare Program, which is being delivered from July this year to July 2023. One of its key outcomes is funding for the establishment of the $20 million Centre for Invasive Species Solutions to drive research, development and extension activities to protect native ecosystems and habitats from pest animals and weeds.

With regard to rural financial counselling, in May this year Minister for Agriculture and Water Resources Barnaby Joyce announced an additional $1.6 million for the Rural Financial Counselling Service. This is a free service that will assist farmers by giving them free access to professionals to work through their financial situation and build financial self-sufficiency. As I said, it'll be set up in Orange. Orange, which is already the home of the New South Wales Department of Primary Industries, will be the home of the Regional Investment Corporation. It is a good choice. In 2014-15 the gross value of agricultural production in the New South Wales Central West region alone was $1.7 billion, 14 per cent of the total gross value of agricultural production in New South Wales of $12.1 billion. The move to Orange continues the decentralisation focus of the Nationals in government. The APVMA is established in Armidale, in the Northern Tablelands of New South Wales, near where I live. It was reported in The Armidale Express on 27 September that more than 450 applications have been received for APVMA positions. Dr Chris Parker said that around 100 to 150 people will be based in Armidale once the agency's move from Canberra is complete in July 2019. Dr Parker said:

With the strength of having one of Australia's premier agricultural universities here, having the CSIRO service station here, having a number of farms and trial sites here that companies are already using … I think anything is possible in the future.

I agree with you, Dr Chris Parker.

Of course, Labor oppose the move, but they're no friends of the regions. Their history is all there for everyone to see. That's why they're so despised in the regional areas. The Rural and Regional Affairs and Transport Legislation Committee conducted an inquiry into this bill, and I will quote from part of its report:

The committee recognises that the establishment of the RIC, underpinned by a streamline nationally consistent concessional loans scheme, would assist struggling rural communities to build the resilience, capabilities and financial viability required to sustain profitable farming and withstand the effects of natural disasters, market failures and inadequate commercial arrangements.

We have strengthened the farm management deposits scheme, doubling the deposit cap from $400,000 to $800,000, restoring the ability of farmers to withdraw without penalty within the first 12 months in the case of drought. We have introduced the ability for financial institutions to offer FMDs as offset accounts for the home loans. At the end of June we had record farm management deposit holdings of $6.09 billion. This is an increase of $1.03 billion, 20.26 per cent, from 30 June 2016. This investment reflects our efforts to make FMDs more attractive to farmers. The coalition government has restored the ability of farmers to return to income tax averaging, also a benefit to them.

We need a rural investment bank, if you want to call it that. If you think you can go on without building more dams, you have it very wrong. One of the essential items for human survival is water. In this land, we know it is life. Dorothea Mackellar wrote of the land of 'drought and flooding rains'. We need to harvest more water in times of floods and see that it's there for the tough, dry times ahead. Irrigation is essential for consistent watering of the crops, more yield, more production, more exports and more money in the regions. I don't know why people in this place oppose that. Why have you got such a set on the regions? A one-stop shop avoiding so much of the red tape, rules and regulations from the states is where farmers in tough times can seek a cheap loan to keep them going. We need finance to build dams. Minister Joyce has made it quite clear: the coalition make no apology that we are determined to build dams. Of course, hydro schemes follow dams. Perhaps the Greens might support that. They're very proud of their hydro schemes in Tasmania. Well, you've got to have dams to do it, so why are you so against building dams? We must store water, we must harvest water and we must manage it correctly to see that the whole nation benefits. I recommend the bill to the chamber.

Murray Watt (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a fairly short contribution to the debate on the Regional Investment Corporation Bill 2017. Labor will be opposing this bill. I'm very happy to speak against the bill as it currently stands. I listened to most of what Senator Williams had to say, and I've got no doubt that he and many of his National Party colleagues are very sincere in their support for regional Australia, but I have to say that this bill and the entity that it proposes to create are, unfortunately, just another white elephant that we see from this government when it comes to providing for regional Australia.

Day in and day out, we hear—particularly from representatives of the National Party but also from the Liberals—that they are the friends and supporters of regional Australia. What they don't want to tell you is that, for decades now, they have consistently failed to deliver prosperity and growth to their supporters in regional Australia. To this day, nine out of 10 of the poorest electorates in this country are represented by the National Party. If the National Party were serious about delivering to the bush and delivering to the regions, do you think that they would accept that as the outcome for the people that they represent? It is hardly something to be proud of that, after decades of service to electorates in regional and rural Australia, they are still condemned to some of the highest rates of poverty in this country. That is failure. That is not success. Unfortunately, this is just another example of the false hope that is held out to regional Australia by the National Party.

It is not even the first example that we've seen from this government in this term of government alone. Over many months now, the Labor Party has pursued this government over the gross failure of its Northern Australia Infrastructure Facility. This was held up by the government about two years ago, when it was announced—it was going to be the saviour of northern Australia. It was going to create jobs and wealth and prosperity right across northern Australia. To this day, it has not funded a single project and it has not created a single job. We know for a fact that the only money that has been spent, to this day, relating to the Northern Australia Infrastructure Facility is about $2½ million to pay the fees of its directors, travel for its directors, functions for its directors and its stakeholders, and salaries for its highly paid senior executives. Not one thing has come out of that fund for people in northern Australia, who are desperately crying out for jobs.

Labor, more than any party, is the party of jobs. It doesn't matter to us where you live. It doesn't matter whether you live in Western Sydney, in northern Melbourne, in central Brisbane or out west or up north in Queensland. We are the party of jobs. We want to get behind initiatives that offer real prospects to regional Australians and real jobs that will last into the future. That's why you will never find a Labor senator or a Labor member of this parliament who has criticised the concept of the Northern Australia Infrastructure Facility. But you will find many of us who have been highly critical of the implementation of it and the way it has delivered—or failed to deliver—to a point where most Labor members of parliament and many people in regional Australia have now rebadged it the 'no actual infrastructure fund'. It is $5 billion of taxpayers' money, which is supposed to be out there right now creating jobs in northern Australia—North Queensland, the Northern Territory and the northern part of Western Australia. These are areas that desperately need jobs. They were given hope by this government through the creation of the Northern Australia Infrastructure Facility, but, to this day, nothing has come from it other than largesse for directors and senior executives. That is one of the key reasons Labor is opposing this bill.

We all know that this Regional Investment Corporation was only coined after the disastrous Orange by-election result in New South Wales, where the National Party copped an absolute hammering. It's no surprise that the head office of this corporation is proposed to be in Orange, because this is what the National Party do: every time they get into trouble they offer a little bit of pork here and there to their trouble spots and then neglect them for the next three years. As Bill Shorten, our Leader of the Opposition, said at the national Country Labor forum in Rockhampton only a week or so ago, the National Party are the party of 'pork and poverty'. Every time there is an election or some little political problem somewhere in regional Australia, they'll dole out a little bit of pork—a bridge here, a road there, a new white elephant, a new government structure created offering apparently thousands of jobs—but it never materialises, they walk away from it, and people in the electorate are left condemned to poverty, as they have been for decade upon decade with the National Party.

This Regional Investment Corporation is just more false hope from this government. It's the latest white elephant being put up by this government to disguise its lack of success in delivering for regional Australia. If this government had been able to manage one project through the Northern Australia Infrastructure Fund, if they had been able to deliver one job out of that fund, then we might have taken this proposal seriously. But we know that all this is is another structure that is being created to disguise the lack of success this government has when it comes to regional Australia. This government is always saying it stands for regional Australia and for jobs in agriculture. Well, in Central Queensland, an area that I have come to know very well with my responsibilities as a senator, this government is so in favour of the cattle industry and agriculture that it wanted to go out and compulsorily acquire prime agricultural land to expand a Defence base—without telling anyone about it. They went out during the election—in typical National Party style, with lots of pork—and talked about how they had signed a deal with the Singaporean government to expand the Shoalwater Bay Defence base.

There is nothing wrong with that in itself; it actually does offer some opportunity to Central Queensland. But what they didn't tell people before the election was it would only be able to go ahead if they could compulsorily acquire prime agricultural land that services tens of thousands of cattle. It is no surprise that Rockhampton is known as the beef capital of Australia; it's because it has so much high-quality agricultural land near it and has thousands of people employed in the meat processing industry. This project from the government was going to go ahead until it was blocked by the actions of Labor and many powerful and loud voices in the community. It was going to take tens of thousands of head of cattle out of the supply chain, meaning a massive loss of income for rural producers; and thousands of jobs in meat processing were going to be jeopardised as well. That's how much a friend of the bush this National Party government is in regional Queensland.

And they consistently turn a blind eye to the abuses of mining companies that replace their permanent work force with labour hire, casual positions and contract positions. Even in question time today we had Minister Cash give another spray against the CFMEU. But you never hear one word from anyone in this government taking on the mining companies about the hundreds of thousands of permanent workers they continue to put off the job on the very same day they bring in people on insecure labour hire arrangements. Let's not have any more rubbish from this government about how they're the friends of regional Australia and that this Regional Investment Corporation will deliver prosperity to the bush. It's nothing more than false hope; it's nothing more than 'pork followed by poverty', for which the National Party has become famous.

If the government were serious about developing regional Australia and providing jobs to keep our regional communities strong, they would get projects out the door from the Northern Australia Infrastructure Fund. They would get some of the beef roads funded that they announced at the same time, which are still waiting to be built. They would get the Northern Australia roads program up and running—and spending money like they promised to do two years ago but have failed to do. At last year's election they committed to jobs growth funds in all the different regions of Queensland. There was going to be a Bowen Basin jobs fund. There was going to be one up around Cairns and in other parts of regional Queensland as well. But they have been flat out even getting a steering committee appointed to start talking about proposals for what jobs might be created in regional Australia. They can't deliver on the promises they have already made. But here we are listening to them bang on about another white elephant that will sit out in Orange probably do nothing. Labor is serious about getting behind regional Australia and wants to see jobs created in regional Australia. But all this government can do is construct white elephants that disappoint people.

Why not get projects out the door from structures that have already been created rather than creating a new one? Why not take up Labor's lead and put some money into the tourism industry, which we know creates hundreds of thousands of jobs in regional Australia?

Why not get the NBN working properly, which is what so many regional businesses are tearing their hair out about to this day? I was in Rockhampton last week, meeting with regional businesses who are suffering greatly from the shoddy rollout of this government's NBN. Fixing those kinds of things may be a better way to deliver jobs rather than ramming new bills in to create mythical corporations that will sit on the shelves and do nothing at all, just like the northern Australia fund.

It's time this government became serious about delivering to regional Australia. It is time to stop ramming bills through parliament that try to create structures that actually never deliver. Let's get the ones that have been created already working before we start wasting more time on new corporations that are just to satisfy a headline for Barnaby Joyce, the Deputy Prime Minister. Let's get jobs into regional Australia by doing things that will work rather than create new structures that will fail.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

This bill, the Regional Investment Corporation Bill 2017, establishes a regional investment corporation to provide and administer up to $4 billion in concessional loans under a farm business loan program and water infrastructure loan program and to provide loans to the states and territories for infrastructure projects. The bill empowers the relevant minister to issue an operating mandate and regulations for the corporation, including to make directions regarding specific water infrastructure projects and classes of farm owners. The minister wouldn't be able to make directions regarding specific farm loans.

The Liberal Democrats oppose this bill because its main purpose is the establishment of another government bank, this time to consolidate the provision of loans to struggling farmers. We would all be better off without government banks. Without government banks, taxpayers would not have to pay the administration costs of government banks and would not have to fund loans that generate less of a return and have a higher risk of default. And, without government banks, Australian businesses and workers wouldn't be diverted from the task of pursuing strong business prospects that a commercial bank would be willing to underwrite. This would help boost profits and wages. This is of particular relevance to agriculture.

Agriculture is one of Australia's finest industries, but it could be even better if the bleating no-hopers in it were allowed to go broke. Good Australian farmers know who the bleaters are. They are the ones who remember one year of green pastures back when John Farnham was topping the charts and consider every year since to be drought rather than normal. They are the ones who hold out their hands for drought relief every decade or so. They are the ones who think they have a God-given right to be always paid the best prices they've ever received for their produce with a government guarantee, and they are the ones who think you've insulted their mother if you suggest their individual survival is neither critical to the economy nor critical to our food security. The bleaters in Australian agriculture are the ones who complain to The Nationals about everything but their own incompetence. And The Nationals respond by providing handouts, concessional loans and government interference in commercial negotiations to keep the bleaters on the land. If the bleaters were left to themselves, they would ultimately have no option but to change their ways or sell up, which would allow neighbouring farmers to expand and apply their more entrepreneurial, innovative spirit to the new acreage. Australian agriculture would benefit. Where Australian agriculture goes, so goes the nation. I love Australian agriculture, and that is why I condemn this bill.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

I rise to speak on the Regional Investment Corporation Bill 2017. As I make a contribution, I think I should reflect on some of the contributions by Senator Leyonhjelm, to come to the defence of the 'bleaters', if that's the term. We've had fairly unique circumstances around agricultural conditions both in my home state of Queensland, where some 93 per cent of the landmass is devoted to agricultural production, and in large tracts of the western part of New South Wales and the northern parts of South Australia, due to weather conditions. Of course, the struggles and the challenges in the dairy industry, for example in Victoria and Tasmania, are well known in this place.

I don't agree with Senator Leyonhjelm that these people—and there are tens of thousands of them—have engineered their own circumstances, as opposed to having been subject to the insidious encroachment of periods of drought, some of which are now the longest in recorded history. In fact, 78 per cent of my home state remains droughted at the moment, and most of this is impacting on broadacre beef production, on pastoralists.

So we have the dingoes, the kangaroos and the drought, and we have the suspension of the live cattle trade in 2011—and I know that some listening will roll their eyes and wonder when we're going to put that chestnut to bed. Well, the fact is that it affected tens of thousands of very viable generational producers in my home state, particularly in the northern areas of Queensland and into the Northern Territory. Those who are not students of the world of agriculture, particularly broadacre pastoralism, wouldn't remember that the live cattle trade suspension impacted for two to three years on the balance sheets of producers. We had massive numbers of cattle that had been particularly bred for export but then, because of the suspension of live exports, found their way onto the domestic market, competing with cattle produced for domestic purposes, which put downward pressure on the price that pastoralists could get for their product. I remember—and I have cited it in this place before—standing beside a neighbour who got 58c a kilogram for store heifers; if that neighbour went back into the marketplace today to replace their female seed stock, they would pay well above $3 at certain times.

So I've always been fascinated by this attitude, as expressed by Senator Leyonhjelm, that farmers are whingers and that all they want to do is to reach out to the federal government to support them. Nothing could be further from the truth. These are very proud people who find themselves in difficult circumstances beyond their control.

If we have a cyclone go through Fiji, 20 minutes later we will have a Hercules flying over, dumping out millions worth of aid and support. If we have a cyclone go through our coastal areas, we spend hundreds of millions of dollars, as a federal government, subsidising the re-establishment of those communities and the businesses that support those communities and support employment—hundreds of millions of dollars. And we do so without pause; we mobilise immediately to provide them with support the following day. There have been some great bushfire tragedies in this country, in South Australia and Victoria in particular. Massive bushfires have wiped out entire regions and districts and taken away people's livelihoods and homes. And, in those cases of natural disaster, we, as a generous nation, immediately mobilise to support these people. But, because we're dealing with a more insidious, slow and creeping form of natural disaster in the form of drought, somehow these people become whingeing 'bleaters', when nothing could be further from the truth.

I can name for you hundreds upon hundreds of pastoralists in the beef industry in my home state—I can tell you the names of their parents and in some instances their grandparents—who have been on properties for up to 100 years, dealing with all the elements and with the challenges that exist when producing beef, in this case, in otherwise arid conditions. They are the best in the world at this. Sometimes remarks about these pastoralists show a great deal of ignorance on the part of the people who express them. Sixty-six per cent of the production of beef in the entire country happens in my home state of Queensland and, of that, over 70 per cent—some 72 per cent—is exported. We are a trade-exposed nation. We are not a volume exporter of beef. We can't compete with the Brazils, Argentinas and others, and so we have to produce quality product if we are to get our share of the marketplace. You can't produce a quality product unless the producers—these farmers, these 'bleaters' that Senator Leyonhjelm referred to—apply the very best practices they can to the operation of their properties, to everything that is within their control.

Those of us who have been around these industries—for the last three or four decades in my case—have watched these people adopt technologies. I've watched them improve their properties, living hand to mouth, effectively, while they reinvest in the properties to create the best pastoral arrangements, to bring into play the best genetics that exist, so that their production rates go up. My grandfather and great-grandfather would produce bullocks—aged male beasts which might be five or six years of age before they were sold off the properties. In place of that we produce and sell an article—a fattened steer or a steer in forward condition—each year. Over the last 30 years, these pastoralists have improved production levels to such an extent that the volumes they produce per hectare on their properties as a result of some of the changes I've mentioned and others—better water reticulation; better water management; the capping of bores with literally millions of kilometres of poly pipe to introduce water points at particular intervals, which science has told us will attract cattle walking a particular distance each day—maximise the grazing of these properties. We're a country that doesn't subsidise the production of beef as happens in many of the nations that we compete with.

I reject absolutely any sort of blanket assumption that a large number of the people in this industry or these industries are bleaters, that they're not efficient, that they're not amongst the most efficient producers in the world. Like everything, there are some who don't do it as well as they could or as well as they should. There are some who, from a financial point of view, have found themselves, starting from a very difficult base, not having or ever achieving the economic capacity to grow their property and improve their business to a standard that would improve productivity and would mean they could operate in a more self-sufficient manner. But the largest volume of them are very, very efficient operators.

I can tell you this as a word of warning: if we create an environment where we start to get mass consolidation of properties and lose what's known as the family farm or the living property—that is, a property that's probably operated by mum and dad with one or two adult children, or certainly the support of their children as they grow up if they happen to remain in the district for their schooling—we're going to change the face of agriculture in our more regional, rural and remote areas to a point that is not in the national interest. We've seen this happen with corporatisation. I am not against corporatisation; I think there's a place for it. Foreign ownership and corporatisation have changed the face of rural Australia by the way that they behave in their interaction with these lifeblood communities, which are out there to support these pastoralists, who, in turn, support our economy. Agriculture's one of the second pillars in our economy. It's been number one before and it will be number one again—without it nothing else matters. You can turn your iPad on, but without agriculture you'll have nothing to eat, no shirt to put on, no trousers to pull on and no shoes or socks to put on. They are things that are produced by these farmers in agriculture. Unless we support them in much the same way that we do with so many other sectors when there are natural disasters, then, I say to you: we will pay a price in the fullness of time—we're already paying a price.

The Regional Investment Corporation, from a legislative point of view, is simply a consolidation of what has been going on for decades with federal government support to agriculture. Currently, where you are drought affected, you are entitled to certain support from the federal government through concessional loans, and there are other measures that the government implements from time to time to support these people to put bread on the table while they survive these drier conditions. At the moment, these loans are administered by the states. One of the driving forces behind this was that we've found—certainly in the near term, in the last four or five years—that some of the states have not administered these loans properly. You can have a property in Queensland and go across the border into New South Wales and be confronted with different loan conditions set down by the states. This inconsistency has caused a great deal of difficulty for many producers around the country. This bill is about consolidating this work into one central point where we'll have a national body that administers these loans.

The modelling has been done. The cost to administer the loans at a federal level is almost netted off by the costs that currently exist, where the states are paid to administer these loans in what, I would argue, is a most inefficient fashion. The loans are paid and they get 2.5 per cent of the gross value of the loan to administer it at state level. Mind you, I think—and I'll stand corrected; I don't mean to do anything to mislead the Senate—that Victoria and Western Australia have put the Commonwealth on notice that they intend to increase that management fee to about five per cent. If you want to talk about an abnormal cost to administer the loans, that's the way to do it. Leave it until these states, one by one, increase their share of these loans that they administer to a point of around five per cent and then we will start to deal with the ratio of the cost to administer to the cost of the loans and we'll be in a fairly inefficient space. This bill will provide a body that will consolidate and manage these loans across the country in a fair and equitable fashion.

The corporation will also administer the government's water infrastructure promises: the $2 billion in the National Water Infrastructure Loan Facility. It is a facility that will allow states to make applications to put much-needed water infrastructure into our various states. It provides the states with concessional loans over a period of time. In both of these instances the money doesn't leave the balance sheet. The money remains on the balance sheet of the Commonwealth. It's not as it was once, where grants were made to people that offset their interest costs. That money never came back. This money will never leave the balance sheet of the Commonwealth, apart from the administration costs, which, I understand, will be offset against the slight uplift in the loans between the Commonwealth and particular producers.

I do share Senator Leyonhjelm's concern about some producers who get access to these concessional loans. There's quite a bit of work being done that will set some of the guidelines into the future—certainly it's a policy position that I've been pursuing—that will tighten up and incentivise these producers to make themselves more resilient in certain circumstances, such as these dry conditions. I mean, it is an arid nation. As sure as night follows day, dry periods are going to follow more prosperous periods. These people are the subject of market conditions. Consequently, when it gets particularly dry, they're forced to sell their commodity—in this case, livestock. You can watch the marketplace over the last 30 or 40 years. I've studied it. Study the graph. When they most need a form of income, this natural disaster causes them to have to sell their livestock at a much reduced price, as is the case now. If we had drought-breaking rains right through the west of Queensland, you would find these producers—as I said in the earlier part of my presentation—having to pay 400 or 500 per cent more than the sale price of their old stock for breeding stock to replace their stock.

This is not legislation that's come into this chamber or anywhere else for an appropriation of money. This money exists. This money sits in the budget, and this money is administered as has been directed by this place and the other place with the governing legislation to date over time. It's not looking for additional funds; it is about managing the existing funds much more efficiently than we have seen in the past. By consolidating it under one Commonwealth roof, the Commonwealth will have the ability to move nimbly across the nation. In this case, it will make us nimble enough to intervene in the lives of producers and people in agricultural pursuits by supporting them at a much earlier stage; therefore offsetting some of the critical issues that occur when they get into such distraught financial circumstances that there's no recovery.

I've met with the banks over a long period of time, and the banks are anxious to ensure that they too support their customers in this space. They get it. They have been very tolerant. This is the private sector. Senator Leyonhjelm suggested it doesn't have a tolerance. Well, it does have a tolerance. Many of the banks or most of the banks, despite some of the publicity that's directed at them, have dealt with these producers in a very even-handed way. They've stood with them for many years, understanding that the cycles in the bush are more like the cycle of a decade than a cycle we might have in parts of the country where things are more predictable in terms of the weather conditions for producers of agricultural commodities.

I really do commend this legislation to the Senate. I think everyone in this place knows I have a serious place in my heart for people in agriculture and people who live in provincial Australia. I can tell you: I've looked at this legislation very thoroughly, and there is no aspect of it that I fear for our government either from a financial point of view or in creating artificial structures or architecture around primary production in this country. I do accept Senator Leyonhjelm's reference, though we disagree on volume.

I think by centralising this we will be able—I understand there's a mood for this—to put incentives and conditions around potential lending, when these people are fronted with natural disasters, which will incentivise them to somehow mitigate the prospects of drought or dry periods of time in their life. I think a lot of thought has gone into this. It's a very plain piece of architecture, for those who have studied the bill. It's not complicated. It's about centralising the distribution and management of the loans along with the water facility. I think it is a much better position than what we have at the moment, where each of the states is putting its own rules on. So it's my position that I commend this bill to the Senate.

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

I thank you for the opportunity to speak about the need for investment in regional areas of Australia. The Northern Territory is certainly one of those regions in absolute need of increased levels of investment. For our roads, essential services, housing and health, the need for increased investment to meet the level of need, most especially in remote areas, is extreme. But this proposed Regional Investment Corporation will do absolutely nothing to increase investment where it's really needed the most.

We know how well the last concessional loans scheme that this government set up is going. The Northern Australia Infrastructure Facility has one project, more than two years on—one project, $5 billion. Yes, I've certainly had a briefing, as recently as today, to find out where the NAIF is at and what steps have been taken. Promises were made in the legislative framework setting up that establishment, promises of so many projects that were already in the pipeline—which were not, once the NAIF was established. So already the track record of this government is very much there for us to see. Here we are, two years down the track, and still there is not one job, certainly not in the Northern Territory and not in our regional areas where we desperately need them the most.

I've just travelled from Queensland right across to WA, looking at jobs for first-nations people in Townsville and Palm Island and the opportunities that should be there, which are not, and across to Perth and Kalgoorlie. Our regions desperately need support. They desperately need to know that this government has got it right. But we know from the experience that we've seen that you haven't got it right. You just cherrypick and think you can put together programs without a basis.

Read through the bill and look at the positions: a three-member board with responsibility for $4 billion in concessional loans. There is no doubt that our farmers across Australia need support. There is no doubt. We recognise that there have to be steps for each area and each group around the country that require assistance at certain times. But what you've put together here doesn't give the confidence that's required. And the reasons you're doing it don't give the confidence that's required, especially when we can see that there is already a record here with the NAIF.

The new Regional Investment Corporation will set up quite a few new jobs in Orange—Orange, and that's it. Where else? What else are we talking about here in the Senate in relation to this corporation? It is certainly good for the people of Orange, but where was the objective assessment of the best place for this corporation to go? Is this an example of how the whole process of setting up the RIC has been? Has it been another exercise in pork-barrelling?

The current loans that are administered by the states and territories will remain the responsibility of the states and the territories, so establishing a new body to administer new loans is a complete waste of taxpayers' money. It's inefficient and it's incredibly costly. It is basically spending, at a cost to taxpayers of $81.4 million over the forward estimates, on a body that is replicating what state and territory governments are already doing. That's not sensible planning. That's unwise spending.

Business improvement concessional loans are already made available to Northern Territory farmers and pastoralists facing hardship. What the Northern Territory desperately needs is proper investment in infrastructure and job creation. The NT government is certainly doing a great job under its housing programs, trying to meet unmet needs in remote Indigenous housing. If we're really committed to closing the gap in Indigenous disadvantage then improving housing is key to improving outcomes. The Northern Territory Labor government's record $1.1 billion remote housing program is creating jobs, building local skills and improving the lives of hundreds of people in remote Aboriginal communities right across the Territory. Early room-to-breathe work, which sees additional living spaces—

Sitting suspended from 18:30 to 19:30

The Northern Territory Labor government's record $1.1 billion remote housing program is creating jobs, building local skills and improving the lives of hundreds of people in remote Aboriginal communities right across the Northern Territory. Early room-to-breathe work, which sees additional living spaces built onto existing homes, has already created 54 new local jobs and training opportunities across the Territory, with hundreds more to come. This will continue to build local economies and improve community outcomes. To date, 146 additional living spaces are underway or completed, and this has begun to ease overcrowding in 21 remote Aboriginal communities. Training opportunities are having a positive flow-on effect. Skills can be applied across both programs and will lead to ongoing jobs in remote communities.

And why do I share this with the Senate? It's really about the impact the Northern Territory is having in relation to investment. I refer to the Deputy Prime Minister's second reading speech, where he makes reference to the states and territories. Constructing the Regional Investment Corporation, or this entity, is about getting rid of the middleman, which is what the Deputy Prime Minister says here. I find there are actually more questions as a result of looking through the bill and his second reading speech. I think: 'How can the Commonwealth look at state and territory governments as the middleman? What are the steps that are being taken to actually analyse where the deficiencies have been?' None of that is explained. And there's no convincing about the real reason behind this. If this is about ensuring a smoother, more efficient process that does deliver for those farmers who are really struggling out there, that's not what I see in this second reading speech, and I'm not convinced that this has been done in the best interests of those farmers out there. Why not continue to keep working with the states and territories across Australia?

In terms of the Northern Territory, I will talk again about the investment in regional Australia. It is to build infrastructure, create jobs and give remote communities in particular a future. Remote communities are screaming for support from, as I said earlier, the CDP, the cashless welfare inquiry—all of these. We can see as we travel around the regions that there's a dire need for support, but give confidence in the way you're making your decisions. This is not one of those decisions that gives confidence.

The government's program, the jobs program in remote Australia, the Community Development Program, is of course an abject, expensive failure that isn't creating a future in remote communities, isn't creating a pathway to employment and certainly isn't creating jobs unless you work in a Centrelink call centre. This government's attitude to investment in regional and remote Australia is so questionable.

The Northern Australia Roads Program is another example of how you've really dropped the ball. The Tanami Road, a vital link for resource companies, pastoralists, local communities and tourists, is crying out for investment. We've been waiting on a commitment to the Tanami for years. It's a shocking road. It's a road train killer. Labor is not supporting the Regional Investment Corporation Bill 2017.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to 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.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I'm pleased this evening to be making my contribution on the legislation before us tonight, the Regional Investment Corporation Bill 2017, not least because it goes to the nature of an issue that's very important to Western Australia. No-one can deny that the success of Western Australia is built on many things, not least the enthusiasm and entrepreneurship of its people in the mining and resources sector but also, significantly, the agricultural sector.

Let me begin by saying that I have some sympathy for the arguments that Senator Bernardi and the Australian Conservatives have put forward. I, too, am a very strong federalist—indeed, I came to this place a number of years ago and fought vehemently against the recognition of local government in our Commonwealth Constitution, on the basis that I decided—

Senator Carol Brown interjecting—

And I was pleased to be supported by many colleagues on this side, Senator Brown. I came to the very strong conclusion that recognising local government in our national Constitution would undermine local decision making and the independence of local communities. I am pleased to say, or pleased to remind you, Senator Brown, that, when that proposition was put twice before to the Australian people, they also rejected it. So, on that issue, I was just carrying the argument of popular opinion.

But what we are talking about tonight gives effect to the 2016 election commitment to establish the Regional Investment Corporation and gives an opportunity to streamline some of the payments that are made through the department of agriculture to support agricultural communities. Most important, of course, to my home state of Western Australia are those farm business concessional loans programs. But the RIC will support farmers and agricultural communities in states like Victoria and South Australia as well, because it will become the vehicle to which the National Water Infrastructure Loan Facility will be attached and future programs supporting agricultural communities.

It is interesting: over the last few weeks, I have had an opportunity on a number of occasions to meet with the new Western Australian minister for agriculture, the Hon. Alannah MacTiernan, our former member for Perth. I am happy to put on the public record that I have been very grateful for the opportunity that she has given to me to talk about wild dog control in Western Australia—a very important issue—and I am positively expectant that we might get some good news from the Western Australian state government on wild dog control. But also she shared with me some concerns she has about the RIC and how it might work—importantly, how the farm concessional loans scheme might actually operate and how that might affect Western Australian farmers.

But I think, at the outset, it is important to put on the public record just why an organisation like this is important generally but, more specifically, why Western Australia should be given a very strong voice in the governance of the Regional Investment Corporation when it's finally established. We know that, under the governance arrangements that will be put in place, it will have three board members. We know, through the committee inquiry process, that the governance arrangements were the point of discussion among and some commentary from Western Australian stakeholders. I might just go to that point first. In the committee process around this particular piece of legislation, various Western Australian organisations—not least, of course, the Pastoralists and Graziers Association of Western Australia, my home state, but also the Western Australian Department of Primary Industries and Regional Development—drew attention to and raised some concerns about the governance arrangements that might be put in around the RIC. It might just be worth quoting from page 18 of the committee report, which draws out some of these concerns:

The Pastoralists & Graziers Association of WA (PGA) argued that a board membership of three was too small, and that the governance arrangements 'enshrine political influence' into what should be a purely commercial operation. It suggested that the size of the board and its composition should be similar to that found in private financial organisations in order to cover the range of qualifications, skills and experience listed in section 17 of the bill. Similarly—

another submitter—

queried whether a board of three members would be 'sufficient to effectively govern' the RIC and that there was a risk that the board would 'end up having a limited range of experience'.

Of course, one of the merits that have been argued in regard to the governance arrangements around the RIC is that it will be seeking to draw out and bring to the board of the organisation a skill set that is broadly focused on agricultural interests—banking and finance, of course; agribusiness experience; financial consulting; auditing; economics—and brings to the governance experience that directly affects rural communities and rural industries.

I think it is worth sharing in my contribution tonight what the Western Australian Department of Industries and Regional Development had to say:

The Western Australia Department of Industries and Regional Development (WADIRD) also raised concerns about the proposed board in terms of both the membership under clause 16, and what constitutes a quorum under clause 29. It argued that as RIC is to manage a loan portfolio of $4 billion, and up to 1000 clients, while operating across all jurisdictions with variations in climatic and production zones, three members would provide an 'insufficient spread of skills and experience for effective governance'.

It's important to put those concerns on the table to remind people that there has been an important debate about the governance arrangements in regard to the RIC, but I say to the Pastoralists and Graziers Association and to the Western Australia Department of Industries and Regional Development: you have nothing to fear. There is nothing to fear in a board membership of three if we make sure there's a very, very strong Western Australian voice amongst those three board members.

Tonight I want to make the case that having a Western Australian board member on the RIC doesn't just suit our parochial interests. It is very, very important when you contemplate or are reminded about the significant contribution that Western Australian agricultural communities make in supporting Australian agriculture and Australian exports. Western Australia's agriculture and food sector not only is a world-class producer of high-quality, safe agriculture, food and fibre products that are vital to our state's economy but also is important to feeding not just Western Australians but people across the whole country, and it significantly supports our export arrangements. The purpose of this body is to better administer farm loan arrangements to farmers in a state like Western Australia, which has such a huge potential. We hear a lot about the export potential of other states and territories, but you have only to look at wheat and the importance of wheat exports not just to the Western Australian agricultural economy—the great bulk of wheat that is produced in Western Australia is exported. That is a very, very different scenario to the rest of the country. When you think about the contribution that wheat and other grains make to supporting the breadth of the wealth that is generated in this country through agriculture, I would argue that it is very, very important to have a strong Western Australian voice and strong Western Australian skills not just on the board of the RIC but in its management and its infrastructure.

It might be worth focusing on the export focus, which is the bread and butter of Australian agriculturalists. The agriculture sector in Western Australia places a high value on its overseas markets, agriculture being WA's second major export industry. It's worth reflecting on that. Australians know all too well that Western Australia's wealth and productivity are very much built on the success of its mining and resource development, but, after that, agricultural exports account for the second-largest volume of exports.

In Western Australia, our state exports account for 80 per cent of our agricultural production. Eighty per cent of our agricultural production is exported. In 2015-16, WA exported an estimated $7.6 billion in agriculture and food products. The top three products were wheat, barley and canola. In the past decade about 70 per cent of the state's agrifood exports have been destined for Asia, with China, Indonesia and Vietnam some of our largest markets. With growing demand for premium agrifood products, especially across Asia, WA is in a good position to build on its reputation as a reliable supplier of clean, safe and high-quality food to overseas markets.

That's important not just in terms of the volume of agricultural exports. We know that as incomes start to rise across Asia—as middle-income earners and the size of that middle-income bracket start to increase across the Indian subcontinent, across North Asia and across South-East Asia—there are very, very real and tangible opportunities for Western Australian agricultural producers, particularly those that are producing high-quality, premium products. And of course the free trade agreements which the coalition government has successfully stewarded are critical in embedding that future success for the Western Australian economy.

I might just reflect briefly on the current farm debt experience across broadacre and dairy farms across the country. People might be surprised to learn that over recent years New South Wales has witnessed a 9.7 per cent increase in farm debt over broadacre farming properties; Victoria, 16.9 per cent; Queensland, a reduction by 9.2 per cent; Western Australia, an increase of 8.6 per cent; South Australia, just one per cent; Tasmania, a reduction of 16.6 per cent; and the Northern Territory again a reduction, by 3.3 per cent. But of course the average across Australia is a rise in farm debt across broadacre properties of, on average, about 4½ per cent. That demonstrates that the issue of supporting agricultural producers, supporting farmers, is very, very important.

Many of us in this place will appreciate—perhaps not all of us to the same degree—that farming communities and farmers and their families have to live with uncertainty. They live with uncertainty not just in terms of the variable climate, which we hear a lot about in this place, and not just in regard to severe drought experiences but also, we know, in dramatic fluctuations in commodity prices. It is the price we pay for being an open, export-orientated market economy, one that I would argue has benefited regional communities for many, many decades. I firmly put myself on the side of the ledger that says that open markets, low tariffs and export-orientated controls that are deregulated are by far the most effective means in being able to deliver success to farming families and to farming communities.

It is worthwhile just briefly sharing with the Senate tonight the success that has been enjoyed by the Western Australian wheat industry, by the Western Australian barley industry and by the beef community. We know that wheat is the major grain crop produced in Western Australia, making up 65 per cent of annual grain production and generating between $2 billion and $3 billion for the Western Australian economy—not the national economy—each year. Wheat production occurs across the Western Australian Wheatbelt region on 4,000 mostly family-run farms ranging in size from just a thousand hectares to almost 15,000 hectares. WA generates 50 per cent of Australia's total wheat production, with more than 95 per cent of this exported, predominantly to Asia and the Middle East. Western Australia produces white-grained wheat varieties that generate high flour-milling yields and a bright white flour that is suitable for a range of products, particularly those of great interest to our trading partners in Asia. The area sown to wheat in Western Australia for the past 20 years has remained relatively stable at between four and five million hectares, but over the same period production has increased strongly with improved yields. As a result, we're seeing production of eight million to 10 million tonnes per annum. The WA wheat industry has been the bedrock of WA's agricultural success. I argue that it's been a significant contributor to the success of the Australian agricultural sector.

Barley is Western Australia's second largest cereal crop after wheat, accounting for 25 per cent of the state's total cereal production and delivering just over $0.6 billion in barley grain and malt export earnings each year. Forty per cent of the barley produced is delivered as malting grade destined for the Japanese, Chinese and Indian beer markets, with the remaining 60 per cent delivered as feed grade, the majority of which is sent not to Asia but to the Middle East.

Finally, the Western Australian beef herd consists of approximately two million head, half of which range freely on extensive pastoral stations in the northern rangelands of Western Australia, while the remainder roam the lush pastures of the agricultural region of the south and south-west of the state.

The issue of governance around the Regional Investment Corporation is one that the new Western Australian government will pay particular attention to. It's one that I'll be paying particular attention to because I think we know that the Western Australian agricultural communities provide a tremendous level of economic activity that supports the entire Australian agricultural industry. But, more than that, I argue that there's a level of innovation that happens across Western Australian farming communities. There's an appetite to try new techniques to make sure that we get the best productive value out of land. And I would add this point: what we're seeing in Western Australia is a generational change in farming communities. Once upon a time, we would see older farmers and their families, but now, I'm pleased to say, communities like Bruce Rock, Merredin and others are coming to life because young people—predominantly men but not exclusively—are taking on the challenge of raising their families in regional communities. They are taking on the challenge of looking after larger agricultural properties that, in good times, bring tremendous benefits to local communities.

I reiterate two important points. The governance arrangement is one that I hope to talk to the federal minister for agriculture, Barnaby Joyce, about. I have also been in communication with the state agricultural minister to talk about what we can be doing to make sure that the concessional loan arrangements that would be put in place under this new scheme properly benefit Western Australian farmers.

In a continent as large as ours, it is hard to argue that there shouldn't be a consistent form of eligibility requirements. Farming conditions are variable enough and different enough on the west coast of Australia to those on the east coast of Australia and, indeed, in Tasmania that it warrants having eligibility criteria that better reflect local conditions in the particular states. This is a point that I know the Western Australian government is keen to argue and keen to debate with the Commonwealth. But you don't have to be an agricultural scientist or a senior climatologist to know the value of having a consistent set of eligibility criteria across a continent as large as ours, with such varying weather conditions—I hope you're nodding in furious agreement, Mr Acting Deputy President. We know that, when farming communities get afflicted with drought or floods in one part of the country, it is very likely, and probably entirely possible, that another region is experiencing bumper times.

There is one particular case in point, and that is that the calculation between annual versus seasonal data in determining the eligibility criteria of Australian farmers has to change. That's important for WA farmers. Dare I say, I'm pleased that the new Labor state minister for agriculture, Alannah MacTiernan, is taking on this particular point. On this issue, I'm happy to barrack in her corner to make sure that Western Australian producers get the best possible deal that they can out of these new arrangements.

I think the idea of putting the RIC in Orange is debatable. I have got to be honest with you. I don't know if putting it in Orange is the right thing to do or even totally necessary—ask Senator Williams or Senator Fawcett! If it has got to be in Orange, that's totally okay. In regard to the governance arrangements, let's make sure there is one prominent Western Australian with sound experience in agricultural industry that is one of those members on that three-member board.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I too rise to make a contribution to this debate on the Regional Investment Corporation Bill 2017. I think it's really important that we move beyond the policy debate and the various barbs that fly across the chamber here and look at the real world. In the Adelaide Advertiser on 6 April 2017, the Australian dairy sector highlighted the issues with the current construct whereby the disbursement of any kind of government support or assistance for farmers who are struggling with things like drought conditions varies from state to state.

I will start off by recalling the points that you made, Acting Deputy President O'Sullivan, that Australia steps up to the plate willingly and comprehensively where we see natural disasters strike the coast in Queensland with cyclones and where we see weather events affect our neighbours in the Pacific. But, when natural disaster strikes our farmers in the slow and damning process of a drought, there are some in this place who would criticise the government for helping them. We see that the government is prepared to help, but, under the current construct, it depends very much on each state's administration as to how effective that help is.

In South Australia, back in April, it was highlighted that only seven of the state's dairy farmers were given access to low-interest-rate loans amongst more than 150 that were handed out federally. I've got to say, as a senator representing South Australia: why is it that we should see South Australian dairy farmers struggling with drought treated in any way that is less advantageous than somebody in Victoria or New South Wales or Queensland when it comes to coping with conditions that are beyond their control? There has been more than $73 million in dairy recovery concessional loans shared amongst 135 Victorian farmers, but less than $7 million was directed to support South Australian farmers. About half the money that was allocated in the federal scheme has actually gone unallocated. It would be bad enough if the rules of the scheme were such that it actively disadvantaged South Australian farmers, but what we see here is that half of the money made available to the state government under the rules set by the Labor government in South Australia, which could have gone to supporting farmers in South Australia who were struggling to produce one of the most basic commodities that our community needs, went unallocated. How can you possibly argue for a scheme where money is made available to be administered by the states, and the states don't even allocate it, even though there are farmers crying out for that support?

For those who want to sit in this glass tower on the hill in Canberra and talk about policy, about why this is a dreadful thing, and accuse the Deputy Prime Minister of all kinds of intentions in a New South Wales seat, can I direct your attention back to dairy farmers in South Australia who are calling out for reform of this scheme because they see that, compared to farmers on the east coast, farmers in South Australia who are facing equally legitimate challenges to the success of their business, producing one of the most basic commodities that our community needs, are being dudded.

Not only is money not being allocated but that which is being allocated is not being allocated particularly effectively. A recent National Audit Office report found the average processing cost for each successful application under the Labor government in South Australia, for similar concessional loan schemes, was $416,000. In other states, the cost was as little as $21,000. That's a staggering difference. We've already heard that in South Australia half the money wasn't allocated to people who needed that support. But, given the cost of actually processing these loans, why would you support a scheme that allocates responsibility to a state government where the cost of processing was over $400,000, while other states could do it for as little as $21,000? How does that make sense? How could you support that kind of inefficiency? These are the kinds of issues that have led to the conclusion that we really need a national approach to this. Mr Curtis, who's the head of the South Australian Dairyfarmers' Association, indicated the difficulty South Australian farmers had accessing these loans. This is not about the Deputy Prime Minister—certainly not in South Australia—this is about my constituents. This is about dairy farmers who need that support.

Let's look through some of the national figures, as at 31 August 2017. Let's have a look at the number of loans and the amount of funding that was allocated. If you ever need an example of why we need a nationally consistent approach to allocating the funding, these figures draw it out: in Queensland, over $400 million—$425 million—was allocated; in New South Wales, $345 million was allocated; in Victoria, $345 million was allocated; in South Australia it was a total of $105 million. That was from 2013-14 up until August 2017. As to the number of farm businesses that were approved, in Queensland, it was 456; in New South Wales, it was 306; in Victoria, it was 476; in South Australia, bearing in mind that this is a program that is delegated to the state government, it was 32. How can that possibly be fair to the taxpayers of South Australia? They see that the governments on the east coast have a scheme that is much cheaper and easier to access, with the result that we see far more farmers who are suffering from drought and other conditions getting the support they need, while in South Australia we don't.

It's no wonder that people like the Wattle Range Council mayor, Mr Peter Gandolfi, has written to Premier Weatherill, urging him to improve access for funding to the dairy farming sector. It's no wonder, surprisingly, that the SA agriculture minister, Mr Leon Bignell, said he welcomed a nationally administered scheme. Here we have the state government—and I give them some credit for the fact they've acknowledged there's a problem—saying that they would welcome a federally administered scheme. I think it's a pretty poor admission for a state government to say they're not up to the job and they'd prefer the federal government to do it. Certainly the dairy farmers in South Australia, as they look at the efficacy of other state governments, are calling for change because they realise they're not getting the support that they need.

Only two of the state's 65 suppliers to the Murray Goulburn and Fonterra milk companies have received the concessional loans that originate from the Commonwealth. That means that only $2 million of the $15 million available to South Australian dairy farmers—this was back in 2016—has been lent, while in Victoria in that time frame, farmers received over $30 million, and a further $20 million was made available.

Farmers in South Australia are looking for some clarity and they're looking for more cost-effectiveness in the delivery of the loans. They're looking for the money that's actually available to be administered and provided to those farmers who need it as opposed to just sitting in an account somewhere, not being dispersed. Even the state minister in South Australia has called and said that he would welcome a federally administered scheme.

That leads us to the Regional Investment Corporation. That's why the Turnbull government has introduced this legislation to establish the Regional Investment Corporation as a separate entity within the Agriculture and Water Resources portfolio. This means that in the future farmers will be able to access farm business concessional loans funding more quickly and more easily with a nationally consistent application and approval process. If for no other reason this Senate should support this measure, because for each loan, rather than looking at $400,000-plus, which is what the ANAO found in South Australia, that cost could come down as low as $21,000, which is what was found in other states. So, if all you are concerned about is the pure economics of it, the efficacy of the whole program, then you should be bringing it under more central control.

The intent is that the Regional Investment Corporation will administer up to $2 billion in concessional loans designed to encourage growth, investment and resilience in our rural and regional communities. These concessional loans support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets that they supply. Importantly for South Australia, we have a large irrigation community at the lower end of the Murray River. Investment there is important if these communities are to continue to be viable in terms of the businesses and the communities that support those businesses into the future. So the Regional Investment Corporation will also deliver the $2 billion National Water Infrastructure Loan Facility. This provides concessional loans to the states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to the states and territories to break ground on priority water infrastructure programs. These programs are things that can increase agricultural productivity and generate jobs and new opportunities for both communities and the businesses that they support; these are products that will support local and regional communities but also exports—an increasingly important part of Australia's economy. Certainly for South Australia, export has been an important part of our economy for a number of years.

Once established, the Regional Investment Corporation will provide flexibility for the Australian government to respond quickly and efficiently to emerging crises like drought. Once the bill has passed through this place the Regional Investment Corporation is expected to be open for business in 2018, with this government making it a priority to get it up and established as soon as possible. Until it's operational, farmers who need support would still be able to apply through their state government mechanisms but, as I've just highlighted, particularly for people in South Australia, those state government mechanisms are difficult to access, they're expensive, they're bad for the taxpayer in terms of the capital productivity of the money that is put into those schemes and, importantly, they're not actually delivering the money available to the farmers who need it.

Nationally, over $764 million in farm business concessional loans has been approved to over 1,400 businesses. When you look at that on a national scale, the amount that has come to South Australia is incredibly small. Some 257 farm businesses, equating to more than $141 billion, have been approved in the dairy sector alone. So, when you compare those national figures to the South Australian figures, you understand why the industry in South Australia is calling for a nationally consistent set of rules and an approach so that the government and the agencies—in this case, an independent body, the Regional Investment Corporation—will be available to respond quickly and effectively to the need of primary producers.

Unfortunately, those opposite have said they will scrap the Regional Investment Corporation. I'd encourage people in South Australia to consider who in this place is actually supporting the primary producers that produce the basics—things like milk—that they and their families need. The coalition government is putting in place a structure to make sure that support is delivered more efficiently. I come back to those figures: $21,000 for other states and $400,000-odd in South Australia to deliver the same support. Why would you support a scheme that is that inefficient? The coalition government is looking to make an efficient scheme through the Regional Investment Corporation. Those opposite in the Labor Party and some of those in the crossbench have indicated that they will not support it—in fact, they would scrap it if they got back into government.

The coalition is the government that recognises the importance of our agricultural sector. We're prepared to look at the facts and figures and work constructively with sectors such as the dairy sector to find ways we can provide them support. Taxpayers have provided that money through the federal government to date, but due to the inefficient structures that have been in place, particularly in South Australia, we have even the state minister there saying he would welcome a federal scheme. Taxpayers around Australia should expect this Senate chamber to support this measure tonight, not because, as those opposite are claiming, it's all about the Deputy Prime Minister but because farmers such as the dairy farmers in South Australia need support. They're not getting support currently. Where support does trickle through, it is incredibly inefficient compared to in the rest of Australia.

So the Regional Investment Corporation is a policy in response to real need that has been expressed by farmers on the ground in South Australia. I would encourage members in this Senate to support this measure and to pass it now. Support this measure in order to support the farmers of South Australia and, indeed, throughout the rest of the states and territories of Australia so we have a nationally consistent scheme which is flexible and effective in its delivery of support for those who provide the very basics that our families in this nation rely on.

Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Link to this | Hansard source

It's a pleasure to rise to speak on the Regional Investment Corporation Bill 2017. I think it is a very important bill and a very important debate. I will start by reminding senators how we got to where we are. The Regional Investment Corporation Bill, which establishes the Regional Investment Corporation, of course, is delivering on the 2016 election commitment which was made by the Deputy Prime Minister, Barnaby Joyce. We have seen, I think, a bit of a habit in this place from the Labor Party of doing all they can to stop the coalition from actually delivering on our election promises. It does go to their attitude when it comes to the meaning of election promises. We all remember what the previous Labor government thought about election promises. They felt they could scrap them five minutes after making it back into government—such as the promise, 'No carbon tax under a government I lead.' We have seen it with the frustration of many other parts of the government's agenda, where the coalition takes a promise to an election and the Labor Party ignores the mandate given by the Australian people and votes against it.

But let's look at what this bill would do. It would deliver up to $4 billion in concessional loans under both the Farm Business Concessional Loans Scheme and the National Water Infrastructure Loan Facility. It will also have the capacity to administer other programs in the future. Of course, this is pretty important to regional Australia. This is pretty important to encouraging growth, to encouraging investment and, of course, to ensuring that our rural and regional communities are able to continue to thrive and, in some cases, deal with the inevitable challenges that regional communities face.

I will go in some detail into various elements of the bill, but the intent is very much to streamline the administration of farm business loans. It's to deliver national consistency to ensure loans are prudently and speedily assessed to help farmers in need. It will also be able to provide independent advice to government on projects for consideration under the National Water Infrastructure Loan Facility and then, of course, to deliver approved grants of financial assistance to states and territories to fast-track the construction of priority water infrastructure projects.

Before I go further into other detailed aspects of the bill, it's worth talking about the Labor Party's position, because it's unclear where exactly they're coming from. The Labor Party says that it will scrap the Regional Investment Corporation. Labor announced after the 2017 budget that it would not support the RIC and proposed to pocket the $28.5 million in RIC establishment costs as budget savings. This is sort of the way that the Labor Party does budgeting, where their apparent saving would, of course, cost more than what they're proposing to save. If you look at the RIC over the past four years, you see that the government has paid $37.65 million to the states and the Northern Territory governments to administer the RIC. Of course, Labor states, such as Victoria and Western Australia, now want to be paid even more to deliver concessional loans. Up to five to eight per cent is what they're asking. Five to eight per cent is what these Labor states are claiming, and this would cost the Commonwealth a total of $59 million to $89 million over four years. Labor's approach—and we've seen this in all sorts of other areas of budgeting—would be to apparently save $28 million but see all of these additional costs. In making this ridiculous argument, the Labor Party falsely claims 'farmers are choosing not to take up the loans'. I can inform Labor senators that the reality is 1,402 farm businesses have been approved for more than $764 million.

I will come back to some other elements there, but I go to what this bill is intending to do. It would establish the corporation as a corporate Commonwealth entity with a skills based board to ensure the proper and efficient performance of the corporation's functions. It would describe the functions of the corporation, including administering farm business loans and, on behalf of the Commonwealth, administering grants of financial assistance to the states and territories for water infrastructure projects. It would also identify two responsible ministers who will appoint the board and issue the corporation with an operating mandate. It will provide a power for rules to be made by the two responsible ministers prescribing future programs to be delivered by the corporation. It would provide for the operating mandate to direct the corporation about the performance of its functions, including: the objectives it is to pursue, expectations in relation to the strategies and policies to be followed, eligibility criteria for loans or financial assistance, management of funding and other matters. It would allow responsible ministers to also direct on classes of farm business loans, individual water infrastructure projects and the location of the corporation but prevent them from directing individual farm business loans. It would require the board to appoint a chief executive officer responsible for the day-to-day administration of the entity and for entering into loan agreements on behalf of the corporation. It would allow the corporation to employ staff to assist in performing its functions and would require a review of the act before 1 July 2024. That, to me, seems a reasonable way to go.

If I can go back to some of the intent behind it, this would mean that in future farmers will be able to access farm business concessional loan funding more quickly and more easily with a streamlined and nationally consistent application and approval process. As Senator Fawcett touched on, that national consistency is important.

The RIC will administer up to $2 billion in concessional loans designed to encourage growth, investments and resilience in our rural and regional communities. Of course, we know that concessional loans support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets which they supply. In addition, the RIC will administer up to $2 billion in the National Water Infrastructure Loan Facility and this of course will provide concessional loans to states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to states and territories to break ground on priority water infrastructure projects. Eligible water infrastructure projects will increase agricultural productivity, will generate local jobs and will create more opportunities for regional communities.

Once established, the RIC will provide flexibility for the Australian government to respond quickly and efficiently to emerging issues, like drought or an industry crisis.

Senator McAllister interjecting—

We get the scoffs from Senator McAllister. Somehow this is humorous to her but it's not humorous.

Senator Cameron interjecting—

Senator Cameron says that to respond to droughts is a slush fund. That is the Labor position on responding to severe drought in regional Australia, responding to severe strains on many of our rural and regional communities. Senator Cameron writes that off as a slush fund. We disagree. Fundamentally, it goes to the Labor Party's views of regional and rural communities, that they can somehow be dismissed.

Senator McAllister interjecting—

And there are the churlish interjections from Senator McAllister, who does seem to think that this is a joke. It is not a joke to those communities. It is not a joke to those who will be suffering in future. It is not a joke to those many farmers who have been taking up these kinds of schemes and who want to see this kind of certainty. The farm business concessional loans are currently open in Queensland, New South Wales, Victoria, South Australia, Northern Territory and Tasmania. And, of course, the government is also negotiating agreement with Western Australia to deliver 2017-18 concessional loans.

Going further, to the take-up, more than $764 million in farm business concessional loans has been approved to over 1,400 farm businesses, with over 1,140 farm businesses approved for a drought related or farm finance concessional loan. That is almost $650 million in funding. And 257 farm businesses, equating to more than $149 million, have been approved for a dairy recovery concessional loan. We know that these thousands of farm businesses are not just important to us as a nation in terms of what they produce on our behalf and they are not just important to us as exporters. They are also important to the families who are associated with them, they are important to those who are employed by them and they are important to those communities. When we see some of these farm businesses go under, we know that that can have a significant flow-on effect on these rural and regional communities.

I go back to the point about the Labor Party doing all they can to stop us from meeting our election promises, which is becoming quite a pattern. There are also the costs—and it is worth emphasising those costs. Labor claim that they are going to get a saving of $28.5 million, yet we know that Labor states such as Victoria and Western Australia want to be paid five to eight per cent to administer these concessional loans. That alone would cost the Commonwealth between $59 million and $89 million over four years. This is how the Labor Party make savings—by imposing additional net costs on the Australian taxpayer. Unfortunately, that's been the pattern when they have been in government in the past.

The coalition will work with the states and the Northern Territory to ensure farm businesses can continue to apply for concessional loans under the Farm Business Concessional Loan Scheme until the RIC opens for business. The government has made $250 million per annum available under the Farm Business Concessional Loan Scheme in 2016-17 and 2017-18 for drought assistance concessional loans, dairy recovery concessional loans and business improvement concessional loans. On business improvement concessional loans, in 2017-18 the Australian government has extended the eligibility of the existing Farm Business Concessional Loan Scheme to include farm household allowance recipients who exhaust their 1,095 days of entitlement on or before 30 June 2018. This will assist eligible farmers to continue to improve their farm businesses and become financially self-reliant, helping their local economies to prosper.

This is a really important point: loans under the Farm Business Concessional Loan Scheme are available for a maximum of 10 years at a variable concessional interest rate of 3.09 per cent as at 1 August 2017 and with interest-only repayments for the first five years. These are very good terms. Drought assistance concessional loans can be used by a farm business so it can maintain operation during a drought, recover when the drought breaks and prepare for future droughts. They are open in New South Wales, Queensland, South Australia, Tasmania, Victoria and the Northern Territory. Dairy recovery concessional loans are available to assist commercially viable dairy farm businesses affected by those very disappointing retrospective decisions in 2016 by Murray Goulburn, Fonterra and National Dairy Products to reduce farm-gate milk prices. They are available in New South Wales, South Australia, Tasmania and Victoria.

So it is a scheme that is well worth supporting and it builds very much on the coalition's record when it comes to drought policy—something Senator Cameron was dismissing as some sort of slush fund. We do have a strong record of delivering assistance to farmers who are doing it tough. Since we were elected, around $1.1 billion has been provided to support farmers and communities in hardship. Our policy program seeks to help build the sustainability and resilience of farmers to help them prepare to manage through droughts and other challenges affecting the farming industries.

This was not the case when we came to office in 2013. We effectively inherited an empty cupboard when it came to drought policy. Labor had abolished the longstanding exceptional circumstances drought support policy, had cut the agriculture department's budget in half, had abolished Land and Water Australia and threatened the longstanding policy to match farmers' R&D levies. Farmers well recall how former agricultural minister Tony Burke asked the Productivity Commission to review the rural R&D system. Labor wanted the R&D funds, which are matched by taxpayers, to go towards government priorities, not to the policies identified by the farmers who paid the levies. That is very important to note. The farmers pay those levies, and we believe that they should get the assistance when they need it. It shouldn't be ripped from them by a Labor government desperately looking to shuffle the money elsewhere.

That stands in stark contrast to the coalition's policy. We confirmed that farmers' R&D funds should be prioritised by the levy payers towards projects with the intention of boosting farmgate returns. We know the importance to those individuals, families, farm businesses, workers, regional communities and in the end us as a nation of making sure that our farming communities continue to prosper and of making sure that when they are doing it tough, when they are suffering through no fault of their own but because of the very harsh conditions that so often occur in this country, they will be given the assistance they deserve.

We've strengthened the rural R&D system with the $190 million Rural Research and Development for Profit initiative. We established the Farm Business Concessional Loans Program of $2.5 billion over ten years, which provides concessional loans with a 3.09 per cent variable interest rate on 10-year terms, with only the interest payable for the first five years. As I said earlier, thousands of farm businesses are taking this up, contrary to the claims of the Labor Party.

We have the opportunity to take a step forward with this bill. We have the opportunity to honour the election promise that was made. We have the opportunity to further support and strengthen our regional and rural communities to ensure that they are able to prosper, that they are able to build their productivity and that those communities continue to be supported and can continue to thrive. That is something that should be supported in this place. It is an election promise that we take very seriously. We seek the support of the chamber, and I commend the bill to the Senate.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

It gives me great pleasure to rise tonight to speak on the subject of the government's delivering on another one of our election commitments. In this case it is the establishment of the Regional Investment Corporation, which will streamline delivery of up to $4 billion in farm business concessional loans and also the National Water Infrastructure Loan Facility.

Before I get to the detail of the bill, I think it is important for those who may be reading the Hansard down the track, when it is in the annals of great parliamentary debates, or who may accidentally hear a recording of this to understand that the coalition—the Liberal and National parties—are the only parties for regional, rural and remote Australia. There are five senators who represent the Queensland Liberal and National parties in this place. You've got Ian Macdonald who lives in Ayr, and whose office is in Townsville; Matt Canavan, who lives in Yeppoon and whose office is in Rockhampton; Barry O'Sullivan, who lives and works in Toowoomba; George Brandis, who flies the flag for us in Brisbane; and me—my office is on the Sunshine Coast and I live on the Darling Downs. Eighty per cent of the LNP senators have their offices in rural and regional Queensland and actually live in rural or regional Queensland, so we understand the issues that face those who live in those communities and we understand the importance that farming plays for Australia.

In my office, I have a sugar cane knife. It comes from the family. My dad was a cane farmer, my grandparents were cane farmers and my great-grandparents were cane farmers. You can look at my nice soft, svelte hands; you can tell that they are not the hands of a farmer. They are the hands of a person who has spent a lot of time typing away at computers. But I keep that cane knife of my dad—he didn't cut too much cane with it because he got a harvester—to remind me of my roots as someone who comes from a farming background.

There is also a milk can in the reception area of my office and it has the name C&G Schneider on it. It was from mum's family, who were dairy farmers. It's an old rusty milk can that reminds me that Queensland was built on the backs of farmers who often started off with nothing. They started off with little more than a dream and a lot of hard work. That is what this party is about; this is what the Liberal National Party is about. It is making sure that farmers and their families, that farming communities and rural, regional and remote Queensland, have a voice in this government. That is why we are delivering on the Regional Investment Corporation. That is why we understand the importance of what this corporation will be able to achieve for Queensland and for all of Australia.

It is important as a senator not only that our offices are based in regional Queensland but that we spend our time on the road, travelling around Queensland and listening to the concerns of people. It's not like some senators opposite who claim to understand Central Queensland because they fly there once every three months, but to go on the road because we live there or spend our time travelling on the road.

I spent two weeks of the four weeks that we were away from this place driving around rural, remote and regional Queensland. I started up in Cairns, going up into the tablelands and going to Innisfail and Mareeba, then across to Normanton and Karumba. In terms of the issues faced there, there are the exciting things that can happen in Karumba with dredging to make sure the port is dredged so we can have live cattle exported directly—put onto ships directly out of the Karumba port. That is very, very important. I made sure that I went across to Burketown to meet with the council there, to make sure that they are listened to—as remote as the shire of Burke and Burketown are from Brisbane and from Canberra—in terms of the issues and the impact upon those communities there.

I then went down to Mount Isa and Cloncurry. The issues were all the same in terms of these communities still recovering to an extent from the ban on live cattle exports. They are still angry at why government would make such a decision, but happy to know that the Liberal National Party government is listening to their concerns and is making sure that we are delivering on an election commitment that can help these farmers grow.

After Cloncurry I moved on to two little places called Duchess and Dajarra, then on to Boulia, down to Bedourie and Birdsville, across to Windorah, down to Quilpie, Thargomindah, Cunnamulla, Charleville and up to Roma. In Roma I was looking at the largest sale yards in the southern hemisphere and some very exciting things that the Maranoa Regional Council want to do there. Then it was on to Dalby and finally home.

That was two weeks on the road going through parts of Queensland that are still drought affected. This is one thing that makes me very angry: so many people in the rest of Australia, so many people on the coast and so many people even in the south-east corner of Queensland do not understand that close to 60 per cent of Queensland is still drought declared. There are shires in Queensland that are entering into their sixth and seventh years of drought. The graziers and the farmers are doing it so tough there.

It is this government that, when it was elected, made the decision that it was there to help not just the graziers and the farmers, those on the land, but those who were in the towns and the communities around Queensland and the rest of Australia that are impacted by the drought and continue to be impacted by the drought. Since we were elected, we have delivered over $1.1 billion to support farmers, graziers and communities in need. Our program is designed especially to help build the sustainability and the resilience of farmers, to help them prepare to manage through future droughts, the current drought they're going through and other challenges that are impacting upon agriculture at the moment, especially as agriculture is shifting constantly from an industry that relies on labour to extend, especially those who grow crops, to more of a reliance on machinery. You only have to go up to St George to see what's changed there in how cotton is being picked now. It has really shifted from a labour-intensive industry to an industry where the cotton-picking machines are becoming automated and pulling out the round bales, making it easier and more economical for the farmers to grow more crops and also to invest back in the industry.

When we came to office in September 2013, the cupboard in relation to drought policy was empty. There was nothing in it. That is very sad, because drought is a natural disaster. It is something that comes periodically in Australia, and you can look at the history of Australia and see the great droughts we've had over the years, broken by the wet and by a return to normal conditions. Drought is, in my view, a natural disaster, and it is shameful that any government would not see drought as such and would not have policies to help those who are impacted by drought. Labor abolished the longstanding exceptional circumstances drought support policy. Labor cut the agriculture department's budget in half. Labor abolished Land and Water Australia and threatened the longstanding policy to match farmers' R&D levies. Farmers well recall that former agriculture minister Tony Burke asked the Productivity Commission to review the rural research and development system. Labor wanted the R&D funds, which are matched by taxpayers, to go towards government priorities, in contrast with the policies identified by the farmers who paid the levies.

By contrast, this government, a government that is unashamedly on the side of farmers and rural communities, confirmed that the farmers' R&D funds should be prioritised by the levy payers towards projects with the intention of boosting farmgate returns. We've strengthened the R&D system with the $190 million Rural Research and Development for Profit initiative. We've established the Farm Business Concessional Loans Scheme, worth $2.5 billion over 10 years. This has provided concessional loans at a 3.09 per cent variable interest rate for 10-year terms, with interest-only terms for the first five years.

I will just divert from our drought policy for a moment, with your indulgence, Mr Acting Deputy President. Part of why government is here and why government exists is to help people when disasters such as drought fall upon them and to make sure that government policies such as the Regional Investment Corporation come into being, but it is also to make sure that the broad economic policies of a government are beneficial to society and the economy as a whole and to particular elements of that economy. That is why this government has invested so much time and effort into making sure that the free trade agreements have become a bastion of economic liberalism, showing to the world how and why free trade is good. For our agricultural sector especially, and also for services and so forth, but particularly for our agricultural sector, free trade has been beneficial. It has made sure that our agricultural produce, whether it is the sugar from Queensland or the cattle from Queensland—clearly, I'm biased; I am a Queenslander first and an Australian second—or the agricultural produce from Tasmania or South Australia, is getting into those emerging markets in Asia with their millions of middle-class people. And that is a fantastic thing.

You will remember that when Labor were in power they did nothing about free trade agreements. They did a lot of talking about free trade agreements. But it has been Andrew Robb, the former trade minister, and now Steve Ciobo, his successor, who have been holding up that flame and going around the world knocking on doors loudly, putting their foot in the door, and then sitting down and talking to people about how trade is a good thing for their economy and for our economy. It is particularly so for our agricultural sector. We want to make sure that—when the drought does break in the 60 per cent of Queensland which is still drought declared, and when people have been able to restock, which will take some time—there will be the markets overseas for the graziers to send their stock to, and to make sure that, for live cattle or live sheep exports, there is a market so that money can go back into these rural communities. Government is working with the private sector to make sure that that happens.

Fourteen hundred farm businesses have been successful in being approved for over $764 million in concessional loans, and 7,600 farmers have been granted FHAs since 1 July 2014. There are currently more than 2,700 farmers and partners receiving FHA payments.

The coalition is also delivering $25 million for the control of pest weeds and animals in drought-affected regions, in recognition of the impact that pests can have on livestock during drought. And weeds can crowd out pastures in drought conditions. So, when I was out in the south-west, looking at the dog fences that have been built there, I saw these fantastic infrastructure improvements, for farmers and those local communities, to make sure that the wild dogs, which are a massive danger to sheep and to cattle, can be controlled and we can eradicate wild dogs from being a pest to our grazing communities.

The government has also provided security of future funding for the Rural Financial Counselling Service, and it has provided additional resources to ensure that farmers in drought-affected communities can access the support the service provides. That is something that I, personally, am very supportive of because my dad was a rural financial counsellor when he left the farm. In fact, he was the first one in Queensland. I understand that, as much as we love the lifestyle, farmers are actually running businesses. The best thing that rural financial counsellors can do is to sit down with farmers and their families and have that discussion about how they can stay on the land—or not, if the business is not operating as a business. Often, you will understand, with farmers and families, there are family partnerships, and sometimes family partnerships work very well and sometimes they can be a little bit dysfunctional. So it was having independent rural financial counsellors coming in and sitting down with the families around the kitchen table, pulling out the old shoebox with all the receipts and so forth—I'm talking decades ago now—and seeing whether their business, that farm, was viable to continue and what they could do to continue farming, or whether they needed to sell up and move on. So I am very happy, personally, that this government is doing such simple things as making sure that the Rural Financial Counselling Service has guaranteed funding and will help future generations of farmers and their families to stay on the land or, if they need to move on, to move on and start other businesses and let their land be farmed by those who may have more capital to invest.

Drought affected communities in regional Australia have also been supported under the $35 million Drought Communities Program. This program is funding community projects, providing employment opportunities in 23 municipalities or shires across Australia. Sometimes we forget about this. When we talk about the drought, everybody thinks it's just the farmers and the graziers who are affected by it. But actually it probably has a greater impact, in a way, on the small towns and hamlets that make up rural Australia. They depend on the income from the farmers coming into the towns, and if the farmers aren't earning any money then money is not going into the towns. Sometimes it's quite hard for the businesses in towns to access support programs, because, while they are being impacted by a natural disaster, by this drought, they can't access programs.

What we've done is made it fairer for those people who live in communities like Charleville in the south-west, or Winton or Longreach. We have made sure that the businesses there can access this funding program, so that they can ensure that our rural and regional communities continue to grow. The last thing Australia needs is for it to become a country that clings to the coastline, while the inside becomes a land of holiday farms and weekenders for stockbrokers from Sydney and Brisbane. We need to make sure that money is invested in the rural, regional and remote parts of Australia, so that the food bowl that is Australia can continue to grow the crops and raise the animals that we can send overseas, thereby making sure that we can not only feed the world but also continue to grow Australia. That is why I'm very proud that this government—and Minister Joyce in particular—has pushed so strongly for the Regional Investment Corporation. The Regional Investment Corporation will be the flagship to make sure that we can continue to invest in these communities.

It is important that those who don't live in the capital cities have a voice in government. They never have a voice in government when Labor are in power. We saw that with live cattle exports and Four Corners. After the TV was turned off, former Prime Minister Gillard then turned off the protein supply to an independent, sovereign country. We saw the damage that it caused to our relationship with Indonesia. We also saw the hurt and damage it caused to families and communities, especially in Queensland, the Northern Territory and parts of Western Australia. This government will never let that happen, because we are on the side of farmers and proud to be so.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

It's a great pleasure, as always, to follow Senator McGrath, who brings a wealth of experience as a senator for Queensland. Queensland is obviously a great agricultural state and one which contributes very much to the overall effort of agricultural production in Australia. But, of course, Tasmania is also a great agricultural state and also contributes greatly to the nation's agricultural production.

As Senator McGrath said before me, the coalition is a longstanding friend of regional Australia and farmers in this country. Acting Deputy President Williams, as a member of the National Party and thereby a member of the coalition, you would know better than most people that, between the two parties that the coalition represents, we look after those who live in regional Australia and those who are involved in agricultural production in a way that no other party does and in a way that is absolutely outstanding.

The Regional Investment Corporation Bill 2017 is seeking to deliver on yet another promise by the coalition government from the 2016 election. It is a bill that has the potential to be of enormous benefit to farmers right across the country, particularly farmers in my home state of Tasmania.

Tasmanian farmers are innovative and resilient. The facility which will be set up by this bill will be of great use to them, as it will be to agricultural producers right across the country. Some of the best and most innovative farmers in Australia are in Tasmania, right across the highly-productive red soils of north-east Tasmania, whether it be dairy, vegetable, beef, wool, sheep meat or crops such as poppies—a very innovative product that was pioneered, in terms of growing it in Tasmania, some decades ago and that is of immense value to the Tasmanian and Australian economy. That fact supports the observation that Tasmania is a net exporter of goods and services. A large part of the exports that make up what we send out of Tasmania are agricultural products which our great farmers produce.

There is no doubt that investing in infrastructure helps farmers in all sorts of ways, whether it be the roads they require to get their produce to market or whether it be the dams which assist to provide the irrigation that is required, particularly for innovative approaches to agriculture. Investing in infrastructure that is well thought out and appropriate assists in the productivity of farmers, the capitalisation on new ideas and the use of land that is available to farmers for the best possible outcomes.

One of the classic examples of that is in Tasmania. Some decades ago, under the Liberal Premier Robin Grey, a significant investment was made in the Craigbourne Dam in the Coal River Valley. Coal River runs through Richmond, which, as a lot of Australians would be aware, is a historic sandstone town about 25 minutes out of Hobart. It also runs through Campania and Colebrook—a number of small towns. Prior to the investment in the dam, this was very marginal farming country—so much so, it was really only suitable for superfine wool production. As those who understand agriculture would understand—I'm sure you would Acting Deputy President Williams—superfine wool production is possible because it is marginal country. The merinos that graze there need to be kept right on the edge. If it's nice and green and lush their wool grows too thick. If it's fine and they get it perfect, you get good strong wool that's not tender but is superfine. You need that marginal country to do it. That highlights the marginality of the country that existed in the Coal River Valley prior to the dam going in.

Nobody really knew what would come out of it but, following the dam being put in, Coal River Valley has turned into a magnificent area that produces stone fruit and vines for fine wine production. Innovative farmers have taken the water that was provided from the dam and they've put that land to its best use. That led to the creation of hundreds, if not thousands, of extra jobs as a result, and to a huge increase in terms of the gross state product that now comes out of the Coal River Valley. It is a magnificent example of how investment in infrastructure can lead to huge growth.

A similar thing has happened more recently with the Meander dam that was put in under the Liberal premiers Ray Groom and Tony Rundle. There was a lot of opposition to that one, in particular, from the Greens. That dam has similarly helped develop the Meander Valley, which is a much bigger valley than Coal River Valley. It has seen huge improvements in terms of the production, the productivity of the area and the overall output that contributes to economic growth and the employment of people in Tasmania. Those two examples highlight the value that investing in infrastructure can have in terms of growing agricultural production and wealth for communities that are related to those communities where the infrastructure is made.

Another example of an innovative Tasmanian farmer that just may well benefit from the proposals that are contained in this bill—not everybody would know—is Lindsay Bourke in northern Tasmania, who is a honey producer. Recently, he was named the producer of the best honey in the world at a North Korean honey event. I've tried his honey, and it's pretty good. But he's very innovative. He's been involved in the industry for decades and he has taken the steps that are required to ensure that he makes the best honey in the world. That has been proven. I could go through countless stories of innovative Tasmanian farmers and how this particular bill will support innovation in Tasmanian agricultural products, and who knows where that will end up?

I said when I first started speaking that the coalition is a fantastic friend of regional Australia and farmers. One example of that is how we have approached drought policy over years. I heard you, Mr Acting Deputy President Williams, talking tonight about how much rain you've had in your part of New South Wales, but you don't always get that rain. The fact is that farmers across the country don't always get the rain they need when they get rain. It is a feast and famine type of business. In the good times, when the rain falls in the right amount and when you want it, things go well, but, when it doesn't fall in the right amounts or when you want it, it makes it very tough to run a business. And so it is from time to time necessary for government to provide support for farmers through drought.

The reality is all parts of Australia have drought. Even the north-west of Tasmania, where it probably rains more than it does in most parts of our beautiful country, drought is a relative thing. If you have your farm set up on the expectation you are going to get a certain number of inches of rain in a particular year and you only get half or a third of that, even if that is a lot of rain compared to other parts of Australia, it's a drought for you because your farm doesn't deliver the output that it would if it had had the rain you were expecting. So drought occurs everywhere. It occurs in my home state of Tasmania, your home state of New South Wales and right across the country.

The coalition government has a strong record in delivering assistance to farmers who are doing it tough. To go through that: since we were elected, around $1.1 billion has been provided to support farmers and communities in hardship. Our policy program seeks to help build the sustainability and the resilience of farmers to help them prepare to manage through droughts and other challenges affecting the farming industries. When we came to office in 2013, the coalition inherited what was essentially an empty cupboard on drought policy.

That highlights the differences in approach between the coalition and those opposite when it comes to regional Australia and farmers. In fact, Labor had abolished the longstanding exceptional circumstances drought support policy. They cut the agriculture department's budget in half. They abolished Land and Water Australia and threatened the longstanding policy to match farmers' research and development levies. Many farmers would recall that former Minister for Agriculture, Fisheries and Forestry Tony Burke asked the Productivity Commission to review the rural R&D system. Labor wanted the R&D funds, which are matched by taxpayers. Every dollar put in by the farmers was matched by the taxpayers, so you get two for one. They wanted that money to go towards government priorities, in contrast with the policies identified by the farmers who actually paid the levies.

By contrast, the coalition has confirmed that the farmers' R&D funds should be prioritised by the levy payers towards projects with the intention of boosting farmgate returns. We have strengthened the rural R&D system with a $190 million rural R&D for-profit initiative and established $2.5 billion over 10 years for a farm business concessional loans program which is providing concessional loans at a 3.09 per cent variable interest rate for 10-year terms with interest-only terms for the first five years. There have been 1,402 farm businesses successfully approved for $764 million in concessional loans as at the end of August this year, and 7,621 farmers and their partners have been granted FHA from 1 July 2014 to 13 October 2017—only a few days ago. Currently there are more than 2,700 farmers and partners receiving FHA payments. The coalition is delivering $25.8 million for the control of pests, weeds and animals in drought-affected regions in recognition of the impact that pests can have on livestock during drought and the fact that weeds can crowd out pastures in drought conditions, as you would well know.

The government has provided security of future funding for the Rural Financial Counselling Service and provided additional resources to ensure farmers in drought-affected communities can access the support provided by the RFCS. It is delivering a $20.2 million managing-farm-risk program, a four-year initiative to encourage farmers to take up multiperil and single-peril farm risk insurance. For decades, farmers have been asking for multiperil-crop-insurance options and, as a result of this initiative, there are a range of commercial products now on the market. All of these measures highlight the belief that this government has in farmers, in the rural folk of Australia, and in what they add to Australia.

If you think about Australia, we are, as it turns out, one of the most urban countries in the world in terms of where the majority of our population live, but the true heart of Australia is outside the cities. It's the country of Australia. What makes Australia different to other countries is our outback and the flavour of the regional parts of our country. Sydney is a beautiful city and Melbourne is a beautiful city, but they're big cities and in a lot of ways big cities are all alike, no matter where you go in the world. What makes Australia Australia is the country. Our government recognises that, and that's one of the reasons why we put the money into supporting our regional Australians and farmers.

Looking more particularly at the bill: as I mentioned, it establishes the Regional Investment Corporation. It delivers on the 2016 election commitment announced by the Deputy Prime Minister, the Hon. Barnaby Joyce MP. The corporation set up under this bill will deliver up to $4 billion in concessional loans under the government's farm business concessional loans program and the National Water Infrastructure Loan Facility. It will also have the capacity to administer other programs in future. It's very forward-looking in terms of supporting the needs of regional and rural Australians and those who are involved in the agricultural industry.

These are critical initiatives—make no mistake—encouraging growth, investment and resilience in Australia's rural and regional communities. The corporation will streamline the administration of farm business loans, delivering national consistency and ensuring loans are prudently and speedily assessed to help farmers in need. It will provide independent advice to government on projects for consideration under the National Water Infrastructure Loan Facility and then deliver approved grants of financial assistance to the states and territories to fast-track the construction of priority water infrastructure projects.

I've already mentioned to you the example of Craigbourne Dam, in Tasmania, and the incredible transformation that that valley went through over the subsequent decades after that money was invested in that dam. I think that is an outstanding case study to show what can come from forward-thinking investment in a dam. It was a very, very marginal valley. The farms in it were really only suitable for very marginal undertakings, but, with the introduction of a sure supply of water, farmers innovatively tried all sorts of things. Some things worked; some didn't, but it has ended up now being one of the primary stone-fruit-growing areas in Tasmania and also a very, very fine wine-growing region. That's an example of how investment in water infrastructure can actually deliver hugely positive outcomes for local communities, for job opportunities, for the overall productivity of farms and for contributing to gross state products. That has been a great thing for Tasmania.

The major elements of the bill include establishing the corporation as a corporate Commonwealth entity with a skills based board to ensure the proper and efficient performance of the corporation's functions. It describes the functions of the corporation, including administering farm business loans and, on behalf of the Commonwealth, administering grants of financial assistance to the states and territories for water infrastructure projects. It identifies two responsible ministers who will appoint the board and issue the corporation with an operating mandate.

It provides a power for rules to be made by the two responsible ministers to prescribe future programs to be delivered by the corporation. It provides for the operating mandate to direct the corporation about the performance of its functions, including on the objectives it is to pursue; expectations in relation to the strategies and policies to be followed; eligibility criteria for loans or financial assistance; management of funding; and other matters. It allows responsible ministers to also direct the classes of farm business loans, individual water infrastructure projects and the location of the corporation but prevents them from directing in relation to individual farm business loans, which I think is appropriate. It requires the board to appoint a chief executive officer responsible for the day-to-day administration of the entity and entering into loan agreements on behalf of the corporation. It allows the corporation to employ staff to assist in performing its functions. It requires a review of the operation of the act before 1 July 2024. Clearly the bill is comprehensive in terms of what it seeks to do to set up the corporation in order to do the task that it needs to do. It covers everything from responsible ministers and the degree to which they're involved to its remit and setting up the staff.

The key messages that come out of this bill are that the coalition is introducing the legislation to establish the RIC, which was a promise. We're delivering on that promise. It means that, in the future, farmers will be able to access farm business concessional loan funding quickly and easily with a streamlined and nationally consistent application and approval process. The RIC will administer up to $2 billion in concessional loans designed to encourage growth, investment and resilience in our rural and regional communities.

Concessional loans support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets they supply. One of the reasons why that's required is—as I've already discussed and as you would understand, Mr Acting Deputy President Williams—the cyclical nature of events that can impact on farmers. That's one of the differences that set these businesses aside from many other businesses: you really are held hostage to things that are outside your control, particularly weather events and so forth.

The RIC will also deliver the $2 billion National Water Infrastructure Loan Facility. This provides concessional loans to the states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to states and territories to break ground on priority water infrastructure projects. Eligible water infrastructure projects will increase agricultural productivity, generate local jobs and create more opportunities for regional communities, which is a very effective summary of what I have seen with the Craigbourne Dam, in the Coal River Valley.

Once established, the RIC will provide flexibility for the Australian government to respond quickly and efficiently to emerging issues like drought or an industry crisis. Subject to passage through parliament—and I would encourage all senators to support this bill because it is a bill of immense importance to regional Australia—the RIC is expected to open for business in 2018, with the coalition government making it a priority to get it up and running as soon as possible. The RIC will be established in Orange, New South Wales.

Until the RIC is operational, farm businesses will be able to continue to apply for farm business concessional loans through their relevant state delivery agency. Farm business concessional loans are currently open in Queensland, New South Wales, Victoria, South Australia, the Northern Territory and my home state of Tasmania. The government is negotiating agreements with Western Australia to deliver 2017-18 concessional loans. State and territory governments can apply for water infrastructure loans through the department at agriculture.gov.au/waterloans.

My time is rapidly running out. In conclusion, I would again acknowledge the importance to Australia of our regional friends, particularly those who are involved in rural and agricultural production, and commend this bill to the Senate.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I too rise to support and heartily commend this government for this initiative, which seeks to establish the Regional Investment Corporation to support farm businesses. It is yet another example of the differences between those on the two sides of the chamber. We are committed to keeping our promises and to supporting the rural sector and also small businesses, something that those opposite continue to struggle with. As my colleague Senator McGrath highlighted to this chamber, there is absolutely no question of the value of rural and regional businesses—their huge value to the economy and also to this government—and the contribution that this government is making. Again, unlike those opposite, this government is committed to helping those in the community and helping them achieve their full potential.

Where can we see some differences and contrasts in this policy? You only have to look at the dissenting report on this bill, the Regional Investment Corporation Bill 2017, from the Labor Party. They said:

Labor Senators believe the Government has neither established a policy rationale for the establishment of RIC nor justified the cost. We recommend the Bill be rejected by the Senate on that basis.

Please! This was extensively discussed and consulted on with industry. It is very clear that this is a great investment in our farm businesses and our farming communities and in ensuring the viability and the growth of this enormous sector, a really important sector for our nation.

Where do we start? In Australia, there is absolutely no doubt that we have a highly variable climate that varies between states and between years. It is subject to extreme weather conditions. Severe droughts, as we know only too well in Western Australia—unfortunately, like other parts of the country—severely affect farm businesses and the rural sector.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Do something about global warming then!

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Cameron, take, for example, my own family—

Honourable senators interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order! Senator Cameron! It was nice and quiet in here. I ask people to cease interjecting. Senator Reynolds, disregard the interjections, please, and continue.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Thank you, but I will take that interjection from Senator Cameron because I'd like to share my own family experience in this area. My grandfather was a World War I veteran. He survived Gallipoli and survived three years on the Western Front. He was a hearty, robust, resilient and innovative man. He came back and established a number of farms at Mukinbudin in Western Australia. He did some very innovative breeding of merinos and created some fantastic new breeds and new classes of wool.

Like all farmers, as I said, he was resilient and hardy and worked damn hard, and he had a great product in his merino sheep. But while he could survive the rigours of Gallipoli and of the Western Front he couldn't survive the Depression, locusts and then drought. It just breaks my heart to know what that did to him and what it did to my uncles as well, who at a very young age were required to take the sheep up and down the roads to try to save them. But as a family they could not survive the weather no matter how innovative they were or how hard they worked. They could not fight the Depression, locusts and drought.

All I can reflect on in reading about what this bill is about is what a difference it would have made to him, to the community and to my family had they had this sort of support available. Clearly, it was a different time but, again, it is unequivocally a great thing for Australian farmers and particularly for Western Australian farmers, who never look for a handout. They don't look for welfare but just sometimes they need that extra support when, despite all of their resourcefulness and their innovation, they just cannot survive.

In Western Australia, as my colleague Senator Smith will know, our farmers are highly innovative in how they do their farming—in land management and also in their take-up of technology. Most recently, the new technological innovation they are taking up is Fitbit for cows and sheep! It might sound a bit interesting but, again, it's the use of technology to make the farm more productive and to create new agricultural opportunities, in particular for our export markets overseas. But sometimes, no matter how good they are, they need a bit of support due to weather conditions, and this is a great program to do that. Farmers and small businesses that rely on the farmers themselves in rural and regional areas need certainty and sometimes, as I said, they need support. This government is to be commended, and Minister Ruston is to be commended, for the work on this bill.

This bill will establish the RIC as a separate entity within the Agriculture and Water Resources portfolio. Again, what this means is that when our hardworking farmers right across this country—who are providing not only important economic support for this country but also food for us and for many millions across the world—need it, they'll be able to access farm business concessional loan funding quickly and easily with streamlined and nationally consistent application and approval processes. Again, how can those opposite possibly think that this is not an unequivocally great thing for those in rural and regional Australia? While they block and attempt to scrap the RIC, this wonderful measure for our rural and regional communities, they propose to pocket the $28 million as budget savings: savings at the cost of our farming communities.

What will the RIC do? It will administer up to $2 billion worth of concessional loans that are designed to encourage growth, investment and, importantly, resilience in our rural and regional communities. Concessional loans support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets that they supply. Again, I am at a complete loss as to how those opposite could possibly seek to block this measure that is designed to support our rural and regional community.

The RIC will also deliver the $2 billion National Water Infrastructure Loan Facility—again, an unequivocally great thing for a very parched country. This provides concessional loans to the states and territories to fast-track priority water infrastructure projects. Again, how can this possibly be a bad thing? It will facilitate making delivery of water projects faster and quicker and more affordable. These loans will also provide an incentive for states and territories to break ground on these priority water infrastructure projects. Eligible water infrastructure projects will increase agricultural productivity, generate local jobs and, again, create more opportunities for rural and regional Australia.

The coalition government, despite what those opposite say, does have a strong record in delivering assistance to farmers who are doing it tough. Again, they're not looking for handouts or charity; they are looking for support to get them through the bad times so they can continue to prosper. So what has this government done since it's been elected? Around $1.1 billion has been provided to support farmers and communities experiencing hardship. We have a policy program, which I'm very proud to support, which seeks to help to build the sustainability and resilience of farmers, and to help them prepare for and manage droughts and other challenges affecting farming industries.

What did we find when we came to government in 2013? Minister, what do you think we found? We found an empty cupboard: drought policy, nil; funding for drought policy, nil. Those opposite are not only opposing our policy now; they did nothing on it, and they didn't leave any money for drought relief. That's quite disgraceful. In fact, Labor also abolished the longstanding exceptional circumstances drought support policy, they cut the agriculture department's budget in half and, if that wasn't enough—if they weren't enough blows for agriculture—they abolished Land & Water Australia and threatened the longstanding policy to match farmers' R&D levies.

Farmers will, I'm sure, bitterly recall when the former agriculture minister, Mr Tony Burke, asked the Productivity Commission to review the R&D system. Labor wanted the R&D funds, which are matched by taxpayers, to go to other government priorities, in contrast to what the farmers, who actually paid those levies, wanted. Again, those opposite saw that as another big slush fund for them to channel money away from the rural and regional communities and into other policy areas. How does that contrast with what those on this side of the chamber have done? We've confirmed that the farmers' R&D fund should be prioritised by the levy payers towards projects that have the intention of boosting farmgate returns. How unreasonable for those who actually pay the levies to have a say in how those levies should be spent and applied in the local communities and businesses in order to increase their farmgate revenue!

The coalition is delivering another $25.8 million for the control of pest weeds and animals in drought affected areas, something I would have thought those opposite, particularly the Greens representatives, would have heartily endorsed. The government has also provided security of funding for the Rural Financial Counselling Service and additional resources to ensure farmers in drought affected communities can access the support provided. These grants provide rebates of up to 50 per cent—up to $2,500—to eligible farm businesses for costs incurred in obtaining independent and professional advice to apply for a new insurance policy. Again, this is something that I know communities right across Western Australia would appreciate. It's an important grant for businesses. It might not sound like a lot, but $2½ thousand to a struggling farm business could mean the difference between being able to and not being able to buy food for that week or that month.

Drought affected communities in regional Australia, including in Western Australia, have been supported by this government's $35 million Drought Communities Program. This program is already funding community projects and providing employment opportunities in 23 municipalities across the country.

The government has also strengthened the Farm Management Deposits scheme, doubling the deposit cap from $400,000 to $800,000 and restoring the ability of farmers to withdraw farm management deposits without penalty within the first 12 months in case of drought. We have introduced the ability for financial institutions to offset the FMD deposits on farm loans. Again, this is another important tangible and practical benefit for our farming community right across this country. In fact, at the end of June, we had a record FMD holdings of over $6 billion, which is an increase of over $1 billion from last year. This is yet another demonstration of this government's commitment to the rural and regional communities across the nation.

As if that weren't enough in terms of turning round the shameful lack of support for our rural and regional communities, particularly in relation to drought, we have also restored the ability of farmers to return to income tax averaging after 10 years existing in that system, another important support for farmers in distress. We are also very proud—I'm very proud—of the government for establishing a suite of policies to support farmers to prepare for and better manage their experience of drought.

Our leadership, I believe, is in stark contrast to the previous six years under Labor, when there was no stability in drought policy and drought funding, denying the farming industry an opportunity to plan and prepare for those inevitable years of drought and low farmgate returns. Again, congratulations to this government for taking this initiative. The RIC will provide flexibility for the Australian government to respond quickly and effectively in the case of drought, which is something that our farming communities absolutely need. When they go through these situations, they need to know that they have got somebody there to support them and that that support will be provided quickly and efficiently to them.

Subject to the passage of the bill through the parliament, the RIC is expected to open for business next year, with the government making it a priority to get it up and running. I understand that while farm business concessional loans are already open in Queensland, New South Wales, Victoria, South Australia, Northern Territory and Tasmania, the government is still negotiating agreement with Western Australia to deliver 18 concessional loans. I very much hope that those negotiations will be speedily concluded. If that is not enough in terms of all the comprehensive activities the RIC will provide, it will also streamline the delivery of up to $4 billion worth in farm business concessional loans and, as I've said, the National Water Infrastructure Loan Facility.

Stripping all of those things away and having a look at them altogether, the fact is that this bill was well consulted on, and industry was engaged. All of these measures you look at are unequivocally great outcomes for rural and regional Australia. Doing it this way will mean that hardworking Australian farmers will be able to access farm business concessional loans more quickly and more easily.

This is a good government, and measures like this clearly demonstrate that we are looking after all sectors of Australian society. In this case, we are doing the right thing: we are righting the wrongs that those opposite inflicted on rural and regional Australia in so many ways—none more so than through drought and water policy. In their report, the Labor Party did say that there was no evidence that this was any good and that it wouldn't have any net benefit. I have clearly just gone through about 15 things that this will substantively do in a positive way for rural and regional Australia.

I would also like to commend the government on how they are establishing this organisation as an independent body. In terms of the chair and the board, I think they have got a very rigorous board and a great balance of people to actually run the RIC. So there are very clear criteria. Again, I think this demonstrates the great deal of thought that has gone into putting the RIC together. The minister has got to be satisfied that individuals have the appropriate qualification in skills and experience to become a board member. I want to share with the Senate the different types of areas that they have to come from and why I think this will be such a robust board. These areas include: agribusiness and financial viability of businesses within the agriculture sector; banking and finance, which are important; water infrastructure, planning and finance; issues concerning rural industries and communities; financial accounting or auditing; government funding programs or bodies; and also legal experience. That is a great mix of people to go onto this board. Alternatively, the person will be eligible for appointment to the board if the minister is satisfied that that person has the relevant experience. Again, that is a very good governance model for an organisation that is very important.

Finally, the Labor Party recommendations for this bill were that the government has neither established a policy rationale for the establishment of the RIC nor justified the cost and that the Senate should reject this bill. It almost leaves me speechless to see how those opposite could possibly have looked at this bill and what it is going to do and say that the government hasn't established a policy rationale when, clearly, rural and regional Australia needs this. I believe it is a very sound investment in the long-term viability of this important sector in Australia. So how does the dissenting report from Labor compare? They don't like it, don't agree with it and say they won't support rural and regional Australia.

The government members came to a very different point of view. They said that Commonwealth assistance to Australian farming communities by way of concessional loans provides support to farmers during periods of financial stress to enable them to return to a stable and financially viable position. How can anybody on the other side of this chamber say that is not a great thing for rural and regional Australia? The committee also recognised that the bill provides a mechanism to provide finance more effectively to farmers that would allow them to manage the feast-and-famine cycle that characterises the sector. That is a statement of the obvious, but what are those opposite suggesting we do? They are suggesting absolutely nothing, effectively giving a two-fingered salute. Those opposite are honestly saying that these farmers do not deserve support. It is incomprehensible.

The committee recognised that the establishment of the RIC underpinned by streamlined, nationally consistent concessional loans would assist struggling rural communities to themselves build resilience, capabilities and financial viabilities to deliver and sustain farming businesses and to increase farmgate profitability. The RIC would not only streamline the administration of farm business loans but also provide independent advice to government on projects for consideration under the National Water Infrastructure Loan Facility. How could those opposite possibly think that providing additional loans to state and territory governments to fast-track their water projects is not worthy of support? I mean, really!

Again, those opposite have knocked back all of the recommendations and everything that's contained in this bill. What is the alternative? They left no money and left us with a dearth of drought policy and drought funding. What is the Labor alternative? We can hear the crickets chirping in here! So, for all of those reasons, I commend the government on this legislation and I commend the bill to the Senate. (Time expired)

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to 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.