Monday, 24 June 2013
Wright Electorate: Farmers
I rise to speak on behalf of the Australian farmer who under extraordinary circumstances is doing it incredibly tough. The other reason I rise is to play my role in trying to educate the Australian public as to some of the hurdles that present themselves in current farming practices, particularly in my electorate of Wright. I have a predominantly agricultural seat when it comes to mainstream revenue, with farmers specialising in the horticultural sector. I have fertile valleys in my electorate, including the Lockyer Valley which did not escape recent unprecedented flooding within the electorate.
The first thing I bring to the attention of the House is the cost of doing business in Australia compared to trying to provide a similar crop elsewhere on the planet. Take for example the cost of financing. Today I was made aware that our banks have maintained the most profitable status globally for the third year in a row—our banks are the most profitable. Why is it that my farmers, who are on struggle street and trying to cope with the increasing operational costs, on average are paying eight per cent for their farming loans? These are third-, fourth- and in some situations fifth-generation farmers. These are specialists in their fields paying eight per cent. Often, when banks are asked to finance new country, these farmers are asked to put up 40 per cent deposits. You tell me what commercial business or even a housing loan demands such a high deposit, even for first-home buyers who often have virtually no credit history. They can get money for a first-home loan at around 5½ per cent. Why is there a two per cent premium on some of the best farmers in the world? Some of our farmers are the best in the world and they are being penalised by two per cent, because the banks perceive them as a risk.
Some of the other costs of operations that farmers in the electorate of Wright are dealing with make me scratch my head. Why is it that if I want to purchase a John Deere harvester or header I can buy the machine out of America for around $400,000, but the same machine here in Australia at parity is around $800,000? The cost of getting the machine to Australia would be no more than $20,000 assembled. Where is the difference? Why are we doing business so poorly in Australia that we are getting the basic things wrong? I cannot answer these questions but I will pursue them in my role as a parliamentarian. I struggle to comprehend this.
Also in the electorate of Wright I have growers that deal with our two major retailers. It is unfathomable that the cost of compliance to produce a product and get it ready for the domestic market is overwhelmingly more expensive than it is to bundle up that exact same product and send it on a ship literally thousands of nautical miles from an Australian port with far less compliance to access export markets than it takes to access the local retail outlets not more than three kilometres from where most of my growers are operating. It is a somewhat perplexing task. However, I will continue to bring pressure to bear on our banks. I have asked questions of our Reserve Bank Governor as to the spread between the cash rate and the margin which banks offer.
The report I read today clarified my resolve to continue to pursue the banks so that my families—my mums and dads in the electorate of Wright, my business people, my businesses—can access cheaper funds at more affordable rates. It will be my intention to continue to pursue markets that are compatible with export markets. If we are going to grow our farming sector, we need to start addressing policy situations in this House.