Regional Investment Corporation Bill

BILLS – Regional Investment Corporation Bill 2017

Mr PASIN (Barker) (10:59): I commend the Regional Investment Corporation Bill 2017 to the House. What we’re looking at here is delivering the Commonwealth’s farm business concessional loans through a system which is nationally consistent. Why? Because the current system, where the concessional loans are allocated through the states, is simply not feasible in the long term. It significantly limits the Commonwealth’s ability to respond to the changing needs of the farming sector. With each state delivering the program, loan decisions are not being made in a consistent way across the country.

How do I know that? I know that because I come from South Australia. In my time in this House, my electorate, sadly, has had to deal with drought and the dairy crisis. During the drought, in much of the upper south-east there were farmers across the districts pleading with government for access to drought concessional loans. Of course, funding was made available by the federal government, but applications needed to be made to Primary Industries and Regions, South Australia—the South Australian state department—under the leadership of the current Minister for Agriculture, Food and Fisheries in South Australia, Labor’s Leon Bignell. Despite there being incredible need and hardship, despite me sitting at the breakfast table with farmer after farmer pouring their hearts out to me about the circumstances they found themselves in, the financial stress that was transposing itself into personal stress in their family lives, with stories of marital break-ups and difficulty with children and their education, what did we see? We saw a few paltry crumbs off the table arriving to the odd—and I say ‘odd’—farmer in South Australia.

You don’t need to take my word for it. You perhaps wouldn’t want to. But a recent National Audit Office report found that, because of the very low number of successful applications in South Australia, processing costs for each successful application in South Australia for the concessional loans program amounted to—wait for it—$416,000. These loans were available up to $1 million. So, in going through the process of assessing these loans, the South Australian department effectively rendered an invoice to the Commonwealth for each successful application for $416,000. When I calculated the net benefit to the small number of farmers that got access to the concessional loans, it was a small fraction of what the state government had charged the Commonwealth for administering the program. This just can’t go on.

Those opposite seem to be railing against it. But do you know who’s not railing against it? It’s the minister for agriculture in South Australia. Even Leon Bignell gets that the gig’s up. Agriculture minister Leon Bignell said he welcomed a nationally administered scheme. Maybe those opposite—the member for Hunter, in particular—haven’t got the memo. We have the state Labor agriculture minister saying: ‘Please, take this burden away from me. I’m incapable of administering this program consistently or at least consistent with other jurisdictions.’

I have spoken about the drought, but let me speak about dairy farmers and dairy farming. It is a significant industry in my electorate. They are farmers who, probably more than most, are heavily indebted and highly geared because of the nature of the farm work they undertake. I take my lead from serious advocates in this space, particularly those in South Australia. I refer to Andrew Curtis, who is the chief executive of the South Australian Dairyfarmers’ Association. What did he say on this front? He said—and it’s not too much to ask:

We want clarity (around the scheme) and we’re not getting it from the State Government, so from that point of view it would be good if the Federal Government took it over.

If those opposite are not prepared to accept that the National Audit Office was gobsmacked at the cost of administering the scheme in South Australia, if they’re not prepared to accept the plea from the Labor minister for agriculture in South Australia, could they please listen to the South Australian dairy sector? They said:

… from that point of view it would be good if the Federal Government took it over.

I’m not particularly disturbed by the attitude of those opposite—I understand that, invariably, if I come into this place and say, ‘White is white,’ those opposite will say, ‘No, white is black,’ and we’ll go on this never-ending carousel ride of yes/no blame politics.

What I was most disturbed by yesterday was the contribution from the member for Hunter. The shadow minister with responsibility for this sector indicated to the House yesterday that this bill did not have the support of the Senate crossbench. It takes a bit to shock me. My staff entered my office and asked if something serious had happened. I had gone white, because I thought, ‘I get that those opposite are just going to play politics, but not the Senate crossbench, not Senator Xenophon.’ I remember Senator Xenophon leading a Friesian heifer in support of the dairy industry. Indeed, Senator Xenophon ran a candidate against me who, by the way, didn’t live in my electorate, but was previously associated with the dairy sector. I thought that, of all the crossbenchers, he would be the one rushing to support a bill which has been called for by the South Australian Dairyfarmers Association and Primary Producers SA and supported by the National Farmers’ Federation. Hence I had gone white—this could not be true; this could not be right.

So I made inquiries. At this stage, the only person we have on the record is the member for Hunter. He is speaking on behalf of the coalition of Labor and minor parties, but the good news is I see from the speaking list that after my contribution there will be a contribution from the member for Mayo. The member for Mayo is the only person in this House who represents the Nick Xenophon SA Best party. She represents an electorate that has a significant proportion of dairy farmers and dairy farming industries. She has an opportunity, when she makes her contribution in this place, to give unconditional support to this bill—not conditional support, not in-principle support, not any other series of words that seek to enable Senator Xenophon’s flexibility in the other place; the member for Mayo has to walk into this place and say, ‘Madam Deputy Speaker, colleagues, anyone listening around the nation, we in the NXT unconditionally support this bill, because we unconditionally support dairy farmers and unconditionally support farmers around Australia.’

If she is unable to do that then, in effect, she and the Nick Xenophon Team are saying that they’re perfectly comfortable with Minister Leon Bignell in South Australia and his department continuing to administer these loans. They might be perfectly comfortable with that, but I’ve spoken to a number of dairy farmers and I’m yet to find a farmer, let alone a dairy farmer, who’s comfortable with that position. If it is the case that we end up in a situation where the member for Mayo is incapable of confirming in this place that her Senate colleagues will unconditionally support this bill in the other place, she is going to have to deal with some seriously angry farmers. It wouldn’t be my approach, if I could offer them some free advice.

Why are the dairy men and women of South Australia angry? Well, in dairy recovery concessional loans alone, the federal government made available $15 million to South Australian dairy farmers. Bear in mind that these are dairy farmers who are dealing with a crisis the likes of which we haven’t seen in this sector. The commodity price hasn’t so much fallen as taken a nosedive off a cliff. Of course, this is a sector which is particularly input hungry—that is, the cost of churning out milk involves significant inputs. Those inputs are expensive and, at this point, there are a number of dairy farmers who are operating below the cost of production or at least achieving prices below the cost of production.

So you would have thought that every single dollar allocated by the federal government to this program for the benefit of South Australian dairy farmers would have been allocated to them—every single dollar—and every application would have been accepted, or at least every application within the funding envelope that the federal government gave to the South Australian government to administer. But you will be surprised to learn that wasn’t the case. Of the $15 million that was allocated by the federal government to the South Australian state Labor government to allocate to their farmers—very many of whom live, work and employ people in my electorate—only $8 million was allocated. Of the $15 million, only $8 million was allocated. Now, you might say: ‘Well, look, you’re being cute. That’s probably all the applications there were.’ No, there were 14 applications received and eight applications granted. So, there are six dairy farmers—I happen to know a large percentage of them in my electorate—who went to the considerable trouble of making an application for a dairy concessional loan.

For those, perhaps those in the gallery, who are not as au fait with what a dairy concessional loan is: it’s a loan, not a grant. It’s effectively a mortgage from the federal government, just like you get a mortgage from a bank, but it’s at a significantly reduced interest rate. It basically means you can go to your bank and say: ‘Of that $5 million I owe you, I will transpose that to $4 million for you and $1 million for the federal government. The nine per cent interest I’m paying to you is on the $4 million and I will pay the much lower interest rate on the $1 million loan from the federal government.’ It has to be repaid. These aren’t grants. Nobody in the sector is after that. But there are six farming families who went to the considerable trouble of making an application, and they were rejected. They were told: ‘No, we’ve got the money sitting here, but you’re not having it. Keep getting up every morning, keep milking your cows and keep seeing the equity in your farm whittle away day by day, because we’re not going to allocate that to you.’ That’s what has happened.

The member for Mayo will contribute to this bill later today; she’s on the speaking list. I would hate for her to take the opportunity to delete her name from the list. If she is incapable of coming in and saying that not only she but the senators of the Nick Xenophon Team give unconditional support to this bill, then she’s saying to those families and the swathe of other families who didn’t make an application, because they knew PIRSA would knock them back and they were waiting for the federal government to take charge, ‘I don’t care.’ That’s what she’s saying: ‘I don’t care. I’m particularly and personally happy with the work of the minister in South Australia, Leon Bignell, and his department.’