Wednesday, 19 September 2018
Treasury Laws Amendment (Supporting Australian Farmers) Bill 2018; Consideration in Detail
The best way to explain the amendment I am moving is this: if I am a farmer, or a business supplying the farms, or a worker in trouble because of what's happening, and let us say I owe $1 million, I am now paying about $90,000 in interest and about $40,000 or $50,000 in repayments, so I have to meet $150,000 a year or be sold up. Under this arrangement all I have to meet is the government borrowing interest rate, which is about three per cent, so instead of paying $150,000 this year, all I have to find is $30,000. Thanks very much to the efforts of Treasurer Wayne Swan and the family assistance scheme, I can get my income topped up with welfare payments and I'll almost certainly be able to meet that $30,000 a year of repayments.
This worked for us in the sugar industry, where the head of the state bank said he wasn't going to provide a reconstruction approach. According to the newspapers we sacked him nine days later, but he had said that 25 per cent of the industry had to go. We said: 'That's ridiculous; you don't know what you're talking about. It's a cyclical industry; the price will be back up in the next two or three years.' The only thing that went was him. We put the money out and about four per cent of the farmers still went down, but we successfully brought through over 20 per cent of the farmers that would have gone down. The many free marketeers in this place would argue that we made a hell of a lot of money out of it because, when the prices doubled, as they did the next year—we said over the next two or three years, but it was the very next year—we went to commercial interest rates and made about $200 million out of the deal. That's the difference between public servants and career politicians—on both sides of the house—and people with hard hands and hard hats on, who backed their judgement with their own money.
Having said that, I again thank and pay very great tribute to both Treasurer Swan and Minister Joyce, who did the right thing in giving away that money. The Queensland LNP government, who touted themselves as successors to the National Party, which they're not, did it in such a way that no-one got any benefits at the end at all. I heap great praise on then Treasurer Swan not only for that but also for his welfare payments, the family farm assistance benefits, which are now carrying nearly 10 per cent of farmers in Australia.
If you look at some of these things, you have to wonder whose side the LNP is on. You just can't say that they're on our side—hence my voting for the last piece of legislation. This needs to be done. It is the way to handle it. It costs the taxpayers no money, and it will give real assistance. If we continue to go down the pathway laid down by the LNP and past Labor and Liberal governments, it will continue to cost the taxpayers money and provide no benefit to the farmer. I have not had time—and I apologise—to distribute this earlier to the House. We got some wrong advice on timing. I take great pleasure in moving the amendment:
(1) Page 2 (after line 6), after clause 2, insert:
2A Rural Loan Reconstruction Authority
(1) When the necessary appropriation is approved by the Parliament, the Minister be authorised to borrow whatever funds are necessary to provide a Rural Loan Reconstruction Authority. The Authority is to provide a process by which the bank debt is bought out and all of the debt transferred to the Reconstruction Authority. The Reconstruction Authority is to borrow at the current Government borrowing rate providing the farmer with a Government interest only liability.
(2) The Reconstruction Authority will not provide finance for farmers and contractors and farm-workers or industry where there is not long term viability. But, it will reduce/eliminate the annual liabilities of the borrower of other punitive, discretionary charges will be removed as well as the common rate of interest. It will remove the liability for repayments and in most cases the onerous 6 monthly valuations. It also removes the debt to equity trigger that bankrupts farmers who have been meeting faithfully their annual liabilities to the banks ( interest repayments). Typically, a farm supply business may owe $1 million, in the current climate they would be paying 8 ½% interest, with bank charges and impositions an extra 1 ½ %. On top of these repayments over 20 years would add $50 000 a year to $100 000 he is already facing.