John Forrest (Mallee, National Party) Share this | Hansard source

On 17 November last year I reported to the parliament my concerns about a debt tsunami raging across my electorate. After 10 years of drought and drastic water shortages for irrigators, the impact is devastating. Six months have rolled on since then, and still the tsunami rages. The resolution I am putting for consideration today requests some support from members towards putting proper protocols in place for commercial lending. We have very good protocols in place for mortgage lending. That comes from the fact that Australians take great pride in having a home, and we need to make sure that if they get into trouble they are treated properly. Primary producers, particularly, live on their farm; it is their home. Some of these impacts, of course affect other businesses as well as primary industry, but I am particularly focused on the primary production sector here with this recovery.

One of the things I have noticed is that many of my constituents have interests on both sides of the river—my constituency in Victoria and over the river in New South Wales, particularly in the electorate of the member for Farrer. In New South Wales, state legislation exists that requires compulsory mediation when a borrower gets into trouble. This forces both parties to sit down together in a non-adversarial environment. It is very good for borrowers, because sometimes they are in denial about how much difficulty they are in. It encourages them to come to grips with the shocking reality that they may lose their farm. It is working very well in New South Wales, and Queensland has similar legislation. In Victoria and South Australia it does not exist, but I think it is prudent. The banks I have had discussions with do not necessarily like it, but they would not create a fuss if the arrangements that exist in New South Wales and Queensland existed in Victoria and South Australia, which is where I am hoping this resolution takes us as a chamber.

The Commonwealth cannot implement any necessary legislation, because we only have corporate powers, and most farming operations are family partnerships and conventional business arrangements. It is necessary for the states of Victoria and South Australia to initiate legislation—it is a very simple thing to do—to mirror the New South Wales model. I am hoping that government members who might speak on this would lend their support to encourage a discussion through COAG to have the legislation that exists in New South Wales mirrored in Victoria.

Sadly, I have seen some very bad examples of how lenders can behave. Sometimes they are led to frustration because borrowers are in denial and are putting the correspondence they are receiving on top of the fridge, hoping it might go away. The tragedy is that it will not; it needs to be addressed. We have put rural counsellors in place right across rural Australia to assist. A debt mediation process would make the process much more dignified, particularly for the borrower.

I have spent the last 16 years of my career in this place standing in the breach to provide moral support to my constituents. There is a new case two or three times a week of people pleading with me just to stand with them for moral support. Some of them have been subjected to some very unsavoury practices by lenders. I am not a bank basher. We need the banking industry to be there so we can have productive growth for the nation; all I say to the banks is that there is a much better way than to force the legal process to mortgagee in possession and fire sales that sell up farming properties. It is like a treadmill when there is a fire sale to sell a farm at just enough for the bank or the lender to get the money that they need—I have had some shocking examples.

But over all that time I have put together a list of the good guys. I have a particularly good working relationship with the ANZ and a particularly good working relationship with Westpac, both of which behave as honourably as they can while making the point, and rightly so, that they are entitled to have the money that has been borrowed repaid. I say to them, ‘Yes, that’s true if there is a default—at a commercial interest rate but without an exorbitant penalty rate.’ Those two lenders behave with consideration and address the resolution of the difficulty with a kind of commercial reality.

I have a provisional list and currently I have disputes raging with the National Australia Bank, the Commonwealth Bank of Australia and Suncorp Metway. They are not on my bad guys list, subject to them hearing my message and my plea to treat my constituents with dignity. In that contribution on 19 November, I warned these lenders: ‘If you treat my people badly, it’s the same as treating me badly.’ I warned them I would name and shame them in this place if I saw an example of what I dealt with that day in November.

The people who win the prize for the bad dude lenders in the nation are Rural Bank of Australia. This bank has emerged from what was Elders bank. It is now 60 per cent owned by Bendigo Bank, which is a community bank owned by its depositors—

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