Regional Investment Corporation Bill 2017 – 16 October 2017

Senator REYNOLDS (Western Australia) (21:23): 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.

Senator Cameron: Do something about global warming then!

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

Honourable senators interjecting

The ACTING DEPUTY PRESIDENT ( Senator Williams ): Order! Senator Cameron! It was nice and quiet in here. I ask people to cease interjecting. Senator Reynolds, disregard the interjections, please, and continue.

Senator REYNOLDS: 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)

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