Barry O'Sullivan (Queensland, National Party) Share this | Hansard source

I rise to speak on the Regional Investment Corporation Bill 2017. As I make a contribution, I think I should reflect on some of the contributions by Senator Leyonhjelm, to come to the defence of the 'bleaters', if that's the term. We've had fairly unique circumstances around agricultural conditions both in my home state of Queensland, where some 93 per cent of the landmass is devoted to agricultural production, and in large tracts of the western part of New South Wales and the northern parts of South Australia, due to weather conditions. Of course, the struggles and the challenges in the dairy industry, for example in Victoria and Tasmania, are well known in this place.

I don't agree with Senator Leyonhjelm that these people—and there are tens of thousands of them—have engineered their own circumstances, as opposed to having been subject to the insidious encroachment of periods of drought, some of which are now the longest in recorded history. In fact, 78 per cent of my home state remains droughted at the moment, and most of this is impacting on broadacre beef production, on pastoralists.

So we have the dingoes, the kangaroos and the drought, and we have the suspension of the live cattle trade in 2011—and I know that some listening will roll their eyes and wonder when we're going to put that chestnut to bed. Well, the fact is that it affected tens of thousands of very viable generational producers in my home state, particularly in the northern areas of Queensland and into the Northern Territory. Those who are not students of the world of agriculture, particularly broadacre pastoralism, wouldn't remember that the live cattle trade suspension impacted for two to three years on the balance sheets of producers. We had massive numbers of cattle that had been particularly bred for export but then, because of the suspension of live exports, found their way onto the domestic market, competing with cattle produced for domestic purposes, which put downward pressure on the price that pastoralists could get for their product. I remember—and I have cited it in this place before—standing beside a neighbour who got 58c a kilogram for store heifers; if that neighbour went back into the marketplace today to replace their female seed stock, they would pay well above $3 at certain times.

So I've always been fascinated by this attitude, as expressed by Senator Leyonhjelm, that farmers are whingers and that all they want to do is to reach out to the federal government to support them. Nothing could be further from the truth. These are very proud people who find themselves in difficult circumstances beyond their control.

If we have a cyclone go through Fiji, 20 minutes later we will have a Hercules flying over, dumping out millions worth of aid and support. If we have a cyclone go through our coastal areas, we spend hundreds of millions of dollars, as a federal government, subsidising the re-establishment of those communities and the businesses that support those communities and support employment—hundreds of millions of dollars. And we do so without pause; we mobilise immediately to provide them with support the following day. There have been some great bushfire tragedies in this country, in South Australia and Victoria in particular. Massive bushfires have wiped out entire regions and districts and taken away people's livelihoods and homes. And, in those cases of natural disaster, we, as a generous nation, immediately mobilise to support these people. But, because we're dealing with a more insidious, slow and creeping form of natural disaster in the form of drought, somehow these people become whingeing 'bleaters', when nothing could be further from the truth.

I can name for you hundreds upon hundreds of pastoralists in the beef industry in my home state—I can tell you the names of their parents and in some instances their grandparents—who have been on properties for up to 100 years, dealing with all the elements and with the challenges that exist when producing beef, in this case, in otherwise arid conditions. They are the best in the world at this. Sometimes remarks about these pastoralists show a great deal of ignorance on the part of the people who express them. Sixty-six per cent of the production of beef in the entire country happens in my home state of Queensland and, of that, over 70 per cent—some 72 per cent—is exported. We are a trade-exposed nation. We are not a volume exporter of beef. We can't compete with the Brazils, Argentinas and others, and so we have to produce quality product if we are to get our share of the marketplace. You can't produce a quality product unless the producers—these farmers, these 'bleaters' that Senator Leyonhjelm referred to—apply the very best practices they can to the operation of their properties, to everything that is within their control.

Those of us who have been around these industries—for the last three or four decades in my case—have watched these people adopt technologies. I've watched them improve their properties, living hand to mouth, effectively, while they reinvest in the properties to create the best pastoral arrangements, to bring into play the best genetics that exist, so that their production rates go up. My grandfather and great-grandfather would produce bullocks—aged male beasts which might be five or six years of age before they were sold off the properties. In place of that we produce and sell an article—a fattened steer or a steer in forward condition—each year. Over the last 30 years, these pastoralists have improved production levels to such an extent that the volumes they produce per hectare on their properties as a result of some of the changes I've mentioned and others—better water reticulation; better water management; the capping of bores with literally millions of kilometres of poly pipe to introduce water points at particular intervals, which science has told us will attract cattle walking a particular distance each day—maximise the grazing of these properties. We're a country that doesn't subsidise the production of beef as happens in many of the nations that we compete with.

I reject absolutely any sort of blanket assumption that a large number of the people in this industry or these industries are bleaters, that they're not efficient, that they're not amongst the most efficient producers in the world. Like everything, there are some who don't do it as well as they could or as well as they should. There are some who, from a financial point of view, have found themselves, starting from a very difficult base, not having or ever achieving the economic capacity to grow their property and improve their business to a standard that would improve productivity and would mean they could operate in a more self-sufficient manner. But the largest volume of them are very, very efficient operators.

I can tell you this as a word of warning: if we create an environment where we start to get mass consolidation of properties and lose what's known as the family farm or the living property—that is, a property that's probably operated by mum and dad with one or two adult children, or certainly the support of their children as they grow up if they happen to remain in the district for their schooling—we're going to change the face of agriculture in our more regional, rural and remote areas to a point that is not in the national interest. We've seen this happen with corporatisation. I am not against corporatisation; I think there's a place for it. Foreign ownership and corporatisation have changed the face of rural Australia by the way that they behave in their interaction with these lifeblood communities, which are out there to support these pastoralists, who, in turn, support our economy. Agriculture's one of the second pillars in our economy. It's been number one before and it will be number one again—without it nothing else matters. You can turn your iPad on, but without agriculture you'll have nothing to eat, no shirt to put on, no trousers to pull on and no shoes or socks to put on. They are things that are produced by these farmers in agriculture. Unless we support them in much the same way that we do with so many other sectors when there are natural disasters, then, I say to you: we will pay a price in the fullness of time—we're already paying a price.

The Regional Investment Corporation, from a legislative point of view, is simply a consolidation of what has been going on for decades with federal government support to agriculture. Currently, where you are drought affected, you are entitled to certain support from the federal government through concessional loans, and there are other measures that the government implements from time to time to support these people to put bread on the table while they survive these drier conditions. At the moment, these loans are administered by the states. One of the driving forces behind this was that we've found—certainly in the near term, in the last four or five years—that some of the states have not administered these loans properly. You can have a property in Queensland and go across the border into New South Wales and be confronted with different loan conditions set down by the states. This inconsistency has caused a great deal of difficulty for many producers around the country. This bill is about consolidating this work into one central point where we'll have a national body that administers these loans.

The modelling has been done. The cost to administer the loans at a federal level is almost netted off by the costs that currently exist, where the states are paid to administer these loans in what, I would argue, is a most inefficient fashion. The loans are paid and they get 2.5 per cent of the gross value of the loan to administer it at state level. Mind you, I think—and I'll stand corrected; I don't mean to do anything to mislead the Senate—that Victoria and Western Australia have put the Commonwealth on notice that they intend to increase that management fee to about five per cent. If you want to talk about an abnormal cost to administer the loans, that's the way to do it. Leave it until these states, one by one, increase their share of these loans that they administer to a point of around five per cent and then we will start to deal with the ratio of the cost to administer to the cost of the loans and we'll be in a fairly inefficient space. This bill will provide a body that will consolidate and manage these loans across the country in a fair and equitable fashion.

The corporation will also administer the government's water infrastructure promises: the $2 billion in the National Water Infrastructure Loan Facility. It is a facility that will allow states to make applications to put much-needed water infrastructure into our various states. It provides the states with concessional loans over a period of time. In both of these instances the money doesn't leave the balance sheet. The money remains on the balance sheet of the Commonwealth. It's not as it was once, where grants were made to people that offset their interest costs. That money never came back. This money will never leave the balance sheet of the Commonwealth, apart from the administration costs, which, I understand, will be offset against the slight uplift in the loans between the Commonwealth and particular producers.

I do share Senator Leyonhjelm's concern about some producers who get access to these concessional loans. There's quite a bit of work being done that will set some of the guidelines into the future—certainly it's a policy position that I've been pursuing—that will tighten up and incentivise these producers to make themselves more resilient in certain circumstances, such as these dry conditions. I mean, it is an arid nation. As sure as night follows day, dry periods are going to follow more prosperous periods. These people are the subject of market conditions. Consequently, when it gets particularly dry, they're forced to sell their commodity—in this case, livestock. You can watch the marketplace over the last 30 or 40 years. I've studied it. Study the graph. When they most need a form of income, this natural disaster causes them to have to sell their livestock at a much reduced price, as is the case now. If we had drought-breaking rains right through the west of Queensland, you would find these producers—as I said in the earlier part of my presentation—having to pay 400 or 500 per cent more than the sale price of their old stock for breeding stock to replace their stock.

This is not legislation that's come into this chamber or anywhere else for an appropriation of money. This money exists. This money sits in the budget, and this money is administered as has been directed by this place and the other place with the governing legislation to date over time. It's not looking for additional funds; it is about managing the existing funds much more efficiently than we have seen in the past. By consolidating it under one Commonwealth roof, the Commonwealth will have the ability to move nimbly across the nation. In this case, it will make us nimble enough to intervene in the lives of producers and people in agricultural pursuits by supporting them at a much earlier stage; therefore offsetting some of the critical issues that occur when they get into such distraught financial circumstances that there's no recovery.

I've met with the banks over a long period of time, and the banks are anxious to ensure that they too support their customers in this space. They get it. They have been very tolerant. This is the private sector. Senator Leyonhjelm suggested it doesn't have a tolerance. Well, it does have a tolerance. Many of the banks or most of the banks, despite some of the publicity that's directed at them, have dealt with these producers in a very even-handed way. They've stood with them for many years, understanding that the cycles in the bush are more like the cycle of a decade than a cycle we might have in parts of the country where things are more predictable in terms of the weather conditions for producers of agricultural commodities.

I really do commend this legislation to the Senate. I think everyone in this place knows I have a serious place in my heart for people in agriculture and people who live in provincial Australia. I can tell you: I've looked at this legislation very thoroughly, and there is no aspect of it that I fear for our government either from a financial point of view or in creating artificial structures or architecture around primary production in this country. I do accept Senator Leyonhjelm's reference, though we disagree on volume.

I think by centralising this we will be able—I understand there's a mood for this—to put incentives and conditions around potential lending, when these people are fronted with natural disasters, which will incentivise them to somehow mitigate the prospects of drought or dry periods of time in their life. I think a lot of thought has gone into this. It's a very plain piece of architecture, for those who have studied the bill. It's not complicated. It's about centralising the distribution and management of the loans along with the water facility. I think it is a much better position than what we have at the moment, where each of the states is putting its own rules on. So it's my position that I commend this bill to the Senate.