Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question and his passionate interest in these topics. Can I assure him that the terms of reference would catch liquidators, to the extent that they were operating on behalf of a financial services entity—for example, a receiver—as defined in the letters patent. The Constitution has an insolvency head of power which would likely enable the commission to use its coercive powers to obtain evidence from liquidators. In looking at the conduct of liquidators, the commission may also seek to investigate other appointments, such as forensic investigators, accountants or valuers, which are often part of the receivership process, as the member would be aware. Referring to registered liquidators or receivers would single them out from the wide category of services—for example, accounts and orders that are similarly captured—and it may be inferred by some that other similar services are not included.

Rural debt was around $71.6 billion as at 30 June of 2017, and 96 per cent of that debt is held by the banks. Our agricultural sector exports are some $51.6 billion. Seventy per cent of Australian farm business is in grain, beef and sheep. It's also important to note, as the member would also be keenly aware, that these farm businesses typically have a turnover of less than $10 million.

What the royal commission has been tasked to do is look at all of these matters I've referred to. I'm not going to prejudge—I'm sure the member wouldn't expect me to—the findings and recommendations of the royal commission. He's unconstrained in that matter and in relation to the specific issues he's raised and the proposals that he's put forward here. I understand he's ventilated at the commission itself. He will have the opportunity to respond to that and make such recommendations to the government as are appropriate.

It's important, though, as we look at those recommendations, as we go through this very important process, that we want our banks to keep lending to business, to keep lending to farms and to be cognisant of how reliant our economy is on the extension of that capital. We do not want this process to result in a restriction of capital flow, whether it's into the farming sector or whether it's into the manufacturing sector or the services sector. We don't want to see a constriction of that. What we want to see is a more effective, more efficient and free-flowing practice from banks to ensure that they can support the growth in the economy, which they were doing during the global financial crisis. One of the reasons we survived that crisis was particularly because the banks continued to lend.

We do have to have a consciousness, as the member says, of the cycle that occurs in the ag sector, and that's why we have the farm management deposit scheme from the government's point of view, but we're of course open to all recommendations from the royal commission.