Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's Advisory report on the Banking Amendment (Rural Finance Reform) Bill 2019, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—The ability for farm business owners to access credit with reasonable and fair terms is an integral part of agri-business. A fair and equitable banking system for all Australians has come into sharp focus in recent years, with the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry bringing to light a raft of issues. The committee has been overseeing the remediation of these issues in its rolling review of the four major banks and other financial institutions.

The Banking Amendment (Rural Finance Reform) Bill 2019 was presented on 22 July 2019 by Ms Rebekah Sharkie MP, the member for Mayo, as:

A Bill for an Act to amend the Banking Act 1959 in relation to loans to primary production businesses and related purposes.

On 25 July 2019 the Selection Committee referred the bill to the House Economics Committee for consideration.

The bill seeks to provide certainty and fairness to small farm businesses taking out loans under $5 million, by setting standard practices for all authorised deposit-taking institutions (ADIs) offering such products. These measures include easy-to-read one-page summaries of clauses that may trigger non-monetary default by the borrower; prohibiting catch-all material adverse change clauses in loan documents, except where it relates to fraud or criminal activity; requiring a 30-business-day notice period before an ADI can exercise a power under a general restriction; and requiring the lender to contact the borrower and request to meet at least six months prior to the expiry of the loan.

The committee held a roundtable public hearing with the Australian Small Business and Family Enterprise Ombudsman; the Australian Financial Complaints Authority; the Rural Policy and Farm Performance Division, Department of Agriculture; and the Australian Banking Association. This roundtable discussion covered the reform measures as outlined in the bill.

The National Farmers Federation (NFF) contributed a submission that was supportive of measures in the bill, noting the importance of fairness and transparency for both the lender and the borrower.

The committee recommends that these suggested measures be considered by the government as a part of its royal commission implementation road map or any subsequent legislation that may arise.

Being in the magnanimous position that I was in the earlier report, I would like to express my frustration that we couldn't have the full participation of all the committee members in this important roundtable, because of the petulance of members of the opposition in constantly calling divisions and quorums. The deputy chair of the committee may have further observations to make, since I was not able to be present throughout the committee. This is the consequence of their petulance and childishness. In practice, what it leads to is less consideration of legislation, less consideration of important committee work and a circumstance where the parliament isn't able to fulfil its full and proper function. The committee recommends that these changes be considered.

On behalf of the committee, I thank all of the participants at the roundtable and the NFF for their submission to the inquiry. I thank the secretariat. I commend the report to the House.

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