David Fawcett (SA, Liberal Party) Share this | Hansard source

I too rise to make a contribution to this debate on the Regional Investment Corporation Bill 2017. I think it's really important that we move beyond the policy debate and the various barbs that fly across the chamber here and look at the real world. In the Adelaide Advertiser on 6 April 2017, the Australian dairy sector highlighted the issues with the current construct whereby the disbursement of any kind of government support or assistance for farmers who are struggling with things like drought conditions varies from state to state.

I will start off by recalling the points that you made, Acting Deputy President O'Sullivan, that Australia steps up to the plate willingly and comprehensively where we see natural disasters strike the coast in Queensland with cyclones and where we see weather events affect our neighbours in the Pacific. But, when natural disaster strikes our farmers in the slow and damning process of a drought, there are some in this place who would criticise the government for helping them. We see that the government is prepared to help, but, under the current construct, it depends very much on each state's administration as to how effective that help is.

In South Australia, back in April, it was highlighted that only seven of the state's dairy farmers were given access to low-interest-rate loans amongst more than 150 that were handed out federally. I've got to say, as a senator representing South Australia: why is it that we should see South Australian dairy farmers struggling with drought treated in any way that is less advantageous than somebody in Victoria or New South Wales or Queensland when it comes to coping with conditions that are beyond their control? There has been more than $73 million in dairy recovery concessional loans shared amongst 135 Victorian farmers, but less than $7 million was directed to support South Australian farmers. About half the money that was allocated in the federal scheme has actually gone unallocated. It would be bad enough if the rules of the scheme were such that it actively disadvantaged South Australian farmers, but what we see here is that half of the money made available to the state government under the rules set by the Labor government in South Australia, which could have gone to supporting farmers in South Australia who were struggling to produce one of the most basic commodities that our community needs, went unallocated. How can you possibly argue for a scheme where money is made available to be administered by the states, and the states don't even allocate it, even though there are farmers crying out for that support?

For those who want to sit in this glass tower on the hill in Canberra and talk about policy, about why this is a dreadful thing, and accuse the Deputy Prime Minister of all kinds of intentions in a New South Wales seat, can I direct your attention back to dairy farmers in South Australia who are calling out for reform of this scheme because they see that, compared to farmers on the east coast, farmers in South Australia who are facing equally legitimate challenges to the success of their business, producing one of the most basic commodities that our community needs, are being dudded.

Not only is money not being allocated but that which is being allocated is not being allocated particularly effectively. A recent National Audit Office report found the average processing cost for each successful application under the Labor government in South Australia, for similar concessional loan schemes, was $416,000. In other states, the cost was as little as $21,000. That's a staggering difference. We've already heard that in South Australia half the money wasn't allocated to people who needed that support. But, given the cost of actually processing these loans, why would you support a scheme that allocates responsibility to a state government where the cost of processing was over $400,000, while other states could do it for as little as $21,000? How does that make sense? How could you support that kind of inefficiency? These are the kinds of issues that have led to the conclusion that we really need a national approach to this. Mr Curtis, who's the head of the South Australian Dairyfarmers' Association, indicated the difficulty South Australian farmers had accessing these loans. This is not about the Deputy Prime Minister—certainly not in South Australia—this is about my constituents. This is about dairy farmers who need that support.

Let's look through some of the national figures, as at 31 August 2017. Let's have a look at the number of loans and the amount of funding that was allocated. If you ever need an example of why we need a nationally consistent approach to allocating the funding, these figures draw it out: in Queensland, over $400 million—$425 million—was allocated; in New South Wales, $345 million was allocated; in Victoria, $345 million was allocated; in South Australia it was a total of $105 million. That was from 2013-14 up until August 2017. As to the number of farm businesses that were approved, in Queensland, it was 456; in New South Wales, it was 306; in Victoria, it was 476; in South Australia, bearing in mind that this is a program that is delegated to the state government, it was 32. How can that possibly be fair to the taxpayers of South Australia? They see that the governments on the east coast have a scheme that is much cheaper and easier to access, with the result that we see far more farmers who are suffering from drought and other conditions getting the support they need, while in South Australia we don't.

It's no wonder that people like the Wattle Range Council mayor, Mr Peter Gandolfi, has written to Premier Weatherill, urging him to improve access for funding to the dairy farming sector. It's no wonder, surprisingly, that the SA agriculture minister, Mr Leon Bignell, said he welcomed a nationally administered scheme. Here we have the state government—and I give them some credit for the fact they've acknowledged there's a problem—saying that they would welcome a federally administered scheme. I think it's a pretty poor admission for a state government to say they're not up to the job and they'd prefer the federal government to do it. Certainly the dairy farmers in South Australia, as they look at the efficacy of other state governments, are calling for change because they realise they're not getting the support that they need.

Only two of the state's 65 suppliers to the Murray Goulburn and Fonterra milk companies have received the concessional loans that originate from the Commonwealth. That means that only $2 million of the $15 million available to South Australian dairy farmers—this was back in 2016—has been lent, while in Victoria in that time frame, farmers received over $30 million, and a further $20 million was made available.

Farmers in South Australia are looking for some clarity and they're looking for more cost-effectiveness in the delivery of the loans. They're looking for the money that's actually available to be administered and provided to those farmers who need it as opposed to just sitting in an account somewhere, not being dispersed. Even the state minister in South Australia has called and said that he would welcome a federally administered scheme.

That leads us to the Regional Investment Corporation. That's why the Turnbull government has introduced this legislation to establish the Regional Investment Corporation as a separate entity within the Agriculture and Water Resources portfolio. This means that in the future farmers will be able to access farm business concessional loans funding more quickly and more easily with a nationally consistent application and approval process. If for no other reason this Senate should support this measure, because for each loan, rather than looking at $400,000-plus, which is what the ANAO found in South Australia, that cost could come down as low as $21,000, which is what was found in other states. So, if all you are concerned about is the pure economics of it, the efficacy of the whole program, then you should be bringing it under more central control.

The intent is that the Regional Investment Corporation will administer up to $2 billion in concessional loans designed to encourage growth, investment and resilience in our rural and regional communities. These 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. Importantly for South Australia, we have a large irrigation community at the lower end of the Murray River. Investment there is important if these communities are to continue to be viable in terms of the businesses and the communities that support those businesses into the future. So the Regional Investment Corporation will also deliver the $2 billion National Water Infrastructure Loan Facility. This provides concessional loans to the states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to the states and territories to break ground on priority water infrastructure programs. These programs are things that can increase agricultural productivity and generate jobs and new opportunities for both communities and the businesses that they support; these are products that will support local and regional communities but also exports—an increasingly important part of Australia's economy. Certainly for South Australia, export has been an important part of our economy for a number of years.

Once established, the Regional Investment Corporation will provide flexibility for the Australian government to respond quickly and efficiently to emerging crises like drought. Once the bill has passed through this place the Regional Investment Corporation is expected to be open for business in 2018, with this government making it a priority to get it up and established as soon as possible. Until it's operational, farmers who need support would still be able to apply through their state government mechanisms but, as I've just highlighted, particularly for people in South Australia, those state government mechanisms are difficult to access, they're expensive, they're bad for the taxpayer in terms of the capital productivity of the money that is put into those schemes and, importantly, they're not actually delivering the money available to the farmers who need it.

Nationally, over $764 million in farm business concessional loans has been approved to over 1,400 businesses. When you look at that on a national scale, the amount that has come to South Australia is incredibly small. Some 257 farm businesses, equating to more than $141 billion, have been approved in the dairy sector alone. So, when you compare those national figures to the South Australian figures, you understand why the industry in South Australia is calling for a nationally consistent set of rules and an approach so that the government and the agencies—in this case, an independent body, the Regional Investment Corporation—will be available to respond quickly and effectively to the need of primary producers.

Unfortunately, those opposite have said they will scrap the Regional Investment Corporation. I'd encourage people in South Australia to consider who in this place is actually supporting the primary producers that produce the basics—things like milk—that they and their families need. The coalition government is putting in place a structure to make sure that support is delivered more efficiently. I come back to those figures: $21,000 for other states and $400,000-odd in South Australia to deliver the same support. Why would you support a scheme that is that inefficient? The coalition government is looking to make an efficient scheme through the Regional Investment Corporation. Those opposite in the Labor Party and some of those in the crossbench have indicated that they will not support it—in fact, they would scrap it if they got back into government.

The coalition is the government that recognises the importance of our agricultural sector. We're prepared to look at the facts and figures and work constructively with sectors such as the dairy sector to find ways we can provide them support. Taxpayers have provided that money through the federal government to date, but due to the inefficient structures that have been in place, particularly in South Australia, we have even the state minister there saying he would welcome a federal scheme. Taxpayers around Australia should expect this Senate chamber to support this measure tonight, not because, as those opposite are claiming, it's all about the Deputy Prime Minister but because farmers such as the dairy farmers in South Australia need support. They're not getting support currently. Where support does trickle through, it is incredibly inefficient compared to in the rest of Australia.

So the Regional Investment Corporation is a policy in response to real need that has been expressed by farmers on the ground in South Australia. I would encourage members in this Senate to support this measure and to pass it now. Support this measure in order to support the farmers of South Australia and, indeed, throughout the rest of the states and territories of Australia so we have a nationally consistent scheme which is flexible and effective in its delivery of support for those who provide the very basics that our families in this nation rely on.