Zed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | Hansard source

It's a pleasure to rise to speak on the Regional Investment Corporation Bill 2017. I think it is a very important bill and a very important debate. I will start by reminding senators how we got to where we are. The Regional Investment Corporation Bill, which establishes the Regional Investment Corporation, of course, is delivering on the 2016 election commitment which was made by the Deputy Prime Minister, Barnaby Joyce. We have seen, I think, a bit of a habit in this place from the Labor Party of doing all they can to stop the coalition from actually delivering on our election promises. It does go to their attitude when it comes to the meaning of election promises. We all remember what the previous Labor government thought about election promises. They felt they could scrap them five minutes after making it back into government—such as the promise, 'No carbon tax under a government I lead.' We have seen it with the frustration of many other parts of the government's agenda, where the coalition takes a promise to an election and the Labor Party ignores the mandate given by the Australian people and votes against it.

But let's look at what this bill would do. It would deliver up to $4 billion in concessional loans under both the Farm Business Concessional Loans Scheme and the National Water Infrastructure Loan Facility. It will also have the capacity to administer other programs in the future. Of course, this is pretty important to regional Australia. This is pretty important to encouraging growth, to encouraging investment and, of course, to ensuring that our rural and regional communities are able to continue to thrive and, in some cases, deal with the inevitable challenges that regional communities face.

I will go in some detail into various elements of the bill, but the intent is very much to streamline the administration of farm business loans. It's to deliver national consistency to ensure loans are prudently and speedily assessed to help farmers in need. It will also be able to provide independent advice to government on projects for consideration under the National Water Infrastructure Loan Facility and then, of course, to deliver approved grants of financial assistance to states and territories to fast-track the construction of priority water infrastructure projects.

Before I go further into other detailed aspects of the bill, it's worth talking about the Labor Party's position, because it's unclear where exactly they're coming from. The Labor Party says that it will scrap the Regional Investment Corporation. Labor announced after the 2017 budget that it would not support the RIC and proposed to pocket the $28.5 million in RIC establishment costs as budget savings. This is sort of the way that the Labor Party does budgeting, where their apparent saving would, of course, cost more than what they're proposing to save. If you look at the RIC over the past four years, you see that the government has paid $37.65 million to the states and the Northern Territory governments to administer the RIC. Of course, Labor states, such as Victoria and Western Australia, now want to be paid even more to deliver concessional loans. Up to five to eight per cent is what they're asking. Five to eight per cent is what these Labor states are claiming, and this would cost the Commonwealth a total of $59 million to $89 million over four years. Labor's approach—and we've seen this in all sorts of other areas of budgeting—would be to apparently save $28 million but see all of these additional costs. In making this ridiculous argument, the Labor Party falsely claims 'farmers are choosing not to take up the loans'. I can inform Labor senators that the reality is 1,402 farm businesses have been approved for more than $764 million.

I will come back to some other elements there, but I go to what this bill is intending to do. It would establish the corporation as a corporate Commonwealth entity with a skills based board to ensure the proper and efficient performance of the corporation's functions. It would describe the functions of the corporation, including administering farm business loans and, on behalf of the Commonwealth, administering grants of financial assistance to the states and territories for water infrastructure projects. It would also identify two responsible ministers who will appoint the board and issue the corporation with an operating mandate. It will provide a power for rules to be made by the two responsible ministers prescribing future programs to be delivered by the corporation. It would provide for the operating mandate to direct the corporation about the performance of its functions, including: the objectives it is to pursue, expectations in relation to the strategies and policies to be followed, eligibility criteria for loans or financial assistance, management of funding and other matters. It would allow responsible ministers to also direct on classes of farm business loans, individual water infrastructure projects and the location of the corporation but prevent them from directing individual farm business loans. It would require the board to appoint a chief executive officer responsible for the day-to-day administration of the entity and for entering into loan agreements on behalf of the corporation. It would allow the corporation to employ staff to assist in performing its functions and would require a review of the act before 1 July 2024. That, to me, seems a reasonable way to go.

If I can go back to some of the intent behind it, this would mean that in future farmers will be able to access farm business concessional loan funding more quickly and more easily with a streamlined and nationally consistent application and approval process. As Senator Fawcett touched on, that national consistency is important.

The RIC will administer up to $2 billion in concessional loans designed to encourage growth, investments and resilience in our rural and regional communities. Of course, we know that concessional loans support the long-term strength, resilience and profitability of farm businesses by helping them to build and maintain diversity in the markets which they supply. In addition, the RIC will administer up to $2 billion in the National Water Infrastructure Loan Facility and this of course will provide concessional loans to states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to states and territories to break ground on priority water infrastructure projects. Eligible water infrastructure projects will increase agricultural productivity, will generate local jobs and will create more opportunities for regional communities.

Once established, the RIC will provide flexibility for the Australian government to respond quickly and efficiently to emerging issues, like drought or an industry crisis.

Senator McAllister interjecting—

We get the scoffs from Senator McAllister. Somehow this is humorous to her but it's not humorous.

Senator Cameron interjecting—

Senator Cameron says that to respond to droughts is a slush fund. That is the Labor position on responding to severe drought in regional Australia, responding to severe strains on many of our rural and regional communities. Senator Cameron writes that off as a slush fund. We disagree. Fundamentally, it goes to the Labor Party's views of regional and rural communities, that they can somehow be dismissed.

Senator McAllister interjecting—

And there are the churlish interjections from Senator McAllister, who does seem to think that this is a joke. It is not a joke to those communities. It is not a joke to those who will be suffering in future. It is not a joke to those many farmers who have been taking up these kinds of schemes and who want to see this kind of certainty. The farm business concessional loans are currently open in Queensland, New South Wales, Victoria, South Australia, Northern Territory and Tasmania. And, of course, the government is also negotiating agreement with Western Australia to deliver 2017-18 concessional loans.

Going further, to the take-up, more than $764 million in farm business concessional loans has been approved to over 1,400 farm businesses, with over 1,140 farm businesses approved for a drought related or farm finance concessional loan. That is almost $650 million in funding. And 257 farm businesses, equating to more than $149 million, have been approved for a dairy recovery concessional loan. We know that these thousands of farm businesses are not just important to us as a nation in terms of what they produce on our behalf and they are not just important to us as exporters. They are also important to the families who are associated with them, they are important to those who are employed by them and they are important to those communities. When we see some of these farm businesses go under, we know that that can have a significant flow-on effect on these rural and regional communities.

I go back to the point about the Labor Party doing all they can to stop us from meeting our election promises, which is becoming quite a pattern. There are also the costs—and it is worth emphasising those costs. Labor claim that they are going to get a saving of $28.5 million, yet we know that Labor states such as Victoria and Western Australia want to be paid five to eight per cent to administer these concessional loans. That alone would cost the Commonwealth between $59 million and $89 million over four years. This is how the Labor Party make savings—by imposing additional net costs on the Australian taxpayer. Unfortunately, that's been the pattern when they have been in government in the past.

The coalition will work with the states and the Northern Territory to ensure farm businesses can continue to apply for concessional loans under the Farm Business Concessional Loan Scheme until the RIC opens for business. The government has made $250 million per annum available under the Farm Business Concessional Loan Scheme in 2016-17 and 2017-18 for drought assistance concessional loans, dairy recovery concessional loans and business improvement concessional loans. On business improvement concessional loans, in 2017-18 the Australian government has extended the eligibility of the existing Farm Business Concessional Loan Scheme to include farm household allowance recipients who exhaust their 1,095 days of entitlement on or before 30 June 2018. This will assist eligible farmers to continue to improve their farm businesses and become financially self-reliant, helping their local economies to prosper.

This is a really important point: loans under the Farm Business Concessional Loan Scheme are available for a maximum of 10 years at a variable concessional interest rate of 3.09 per cent as at 1 August 2017 and with interest-only repayments for the first five years. These are very good terms. Drought assistance concessional loans can be used by a farm business so it can maintain operation during a drought, recover when the drought breaks and prepare for future droughts. They are open in New South Wales, Queensland, South Australia, Tasmania, Victoria and the Northern Territory. Dairy recovery concessional loans are available to assist commercially viable dairy farm businesses affected by those very disappointing retrospective decisions in 2016 by Murray Goulburn, Fonterra and National Dairy Products to reduce farm-gate milk prices. They are available in New South Wales, South Australia, Tasmania and Victoria.

So it is a scheme that is well worth supporting and it builds very much on the coalition's record when it comes to drought policy—something Senator Cameron was dismissing as some sort of slush fund. We do have a strong record of delivering assistance to farmers who are doing it tough. Since we were elected, around $1.1 billion has been provided to support farmers and communities in hardship. Our policy program seeks to help build the sustainability and resilience of farmers to help them prepare to manage through droughts and other challenges affecting the farming industries.

This was not the case when we came to office in 2013. We effectively inherited an empty cupboard when it came to drought policy. Labor had abolished the longstanding exceptional circumstances drought support policy, had cut the agriculture department's budget in half, had abolished Land and Water Australia and threatened the longstanding policy to match farmers' R&D levies. Farmers well recall how former agricultural minister Tony Burke asked the Productivity Commission to review the rural R&D system. Labor wanted the R&D funds, which are matched by taxpayers, to go towards government priorities, not to the policies identified by the farmers who paid the levies. That is very important to note. The farmers pay those levies, and we believe that they should get the assistance when they need it. It shouldn't be ripped from them by a Labor government desperately looking to shuffle the money elsewhere.

That stands in stark contrast to the coalition's policy. We confirmed that farmers' R&D funds should be prioritised by the levy payers towards projects with the intention of boosting farmgate returns. We know the importance to those individuals, families, farm businesses, workers, regional communities and in the end us as a nation of making sure that our farming communities continue to prosper and of making sure that when they are doing it tough, when they are suffering through no fault of their own but because of the very harsh conditions that so often occur in this country, they will be given the assistance they deserve.

We've strengthened the rural R&D system with the $190 million Rural Research and Development for Profit initiative. We established the Farm Business Concessional Loans Program of $2.5 billion over ten years, which provides concessional loans with a 3.09 per cent variable interest rate on 10-year terms, with only the interest payable for the first five years. As I said earlier, thousands of farm businesses are taking this up, contrary to the claims of the Labor Party.

We have the opportunity to take a step forward with this bill. We have the opportunity to honour the election promise that was made. We have the opportunity to further support and strengthen our regional and rural communities to ensure that they are able to prosper, that they are able to build their productivity and that those communities continue to be supported and can continue to thrive. That is something that should be supported in this place. It is an election promise that we take very seriously. We seek the support of the chamber, and I commend the bill to the Senate.