“Barnaby Bank” to increase market competition

Nationals leader Barnaby Joyce.
Nationals leader Barnaby Joyce.

THE “Barnaby Bank” has taken another step towards fruition - to pressure other finance institutions into delivering lower interest rates to struggling farmers - with the Regional Investment Corporation Bill 2017 introduced into federal parliament this week.

The Regional Investment Corporation (RIC) was announced by Nationals leader and Agriculture and Water Resources Minister Barnaby Joyce in last year’s federal election campaign as part of the Coalition’s $240 million agricultural policy package.

Mr Joyce says the Bill will advance the initiative, by putting the $4 billion RIC on track to be established in 2018 at Orange, in regional NSW.

The new Corporation has been welcomed by farm groups as a means of delivering drought support loans more expediently to those who need it most by cutting out state government bureaucracies and it will also administer water infrastructure funding loans.

It was also raised in parliament question time this week, with Mr Joyce saying the government was working with the farming community to “make sure we get the very best outcome for them”.

“We cannot afford the interest rate subsidies anymore that we had in the past, but we can afford to make available concessional loans, which are not only better for the farmers - the rates are 2.47 per cent, the lowest rate at the moment - but also put the competition on the banks,” he said.

“You would think that by putting competition on the banks with the set-up of the Regional Investment Corporation we should have wide support to make sure that we get a very competitive price.”

Mr Joyce said the RIC had been a goal of the National Party and regional Liberals and even the member for Kennedy Bob Katter “for such a long period of time” but rather than talking about it, “we are actually doing it”.

“We are actually setting it up,” he said.

“It is going to capitalise up to $4 billion - $2 billion in water infrastructure alone, to build our dams and make our nation a stronger place, and $2 billion in concessional loans,” he said.

“It has the mandate in the future to expand where it goes.

“It will be set up in the member for Calare's seat, at Orange, where we already have Paraway financial, part of Macquarie Bank.

“We have a large section of the National Australia Bank's rural investment unit set up there, we have the Rural Assistance Authority and we have the NSW department of agriculture to create a centre of excellence at Orange in financing.

“We have a vision for creating Orange and making sure it grows as the premier venue for financing rural investments in Australia.”

In his reading speech on the Bill, Mr Joyce said since 2013-14, the Commonwealth had been offering concessional loans to farm businesses to help them through times of difficult and are being extended from July 1, 2018 to support eligible farmers who have exhausted their 1095 day eligibility for the farm household allowance.

“These concessional loan programs have been delivered through the states,” he said.

“There is no doubt these loans are successfully providing practical support to the farm businesses that have received them, with over $680 million in loans approved to 1270 farm businesses as of 30 April 2017.

“But the fact is that delivering through the states is unwieldy and there is a lack of consistency in delivery across the country.”

Mr Joyce said currently, the Commonwealth had to negotiate separately with each state government to change an existing arrangement or roll out a new program to farmers.

But he said “even with the best endeavours”, this can involve protracted negotiations over delivery, loan terms and administration costs - delaying the rollout of and farmers' ability to apply for this important government support.

“We have also found that loan decisions are not being made consistently across the country,” he said.

“For example, some states apply a very restrictive approach to assessing loan applications and have a very low rate of loan approvals.

“This is unacceptable.

“The Commonwealth should have more direct control over the delivery of its loans programs.

“We did not go to so much work to provide access to this facility to see it not rolled out by certain states.

“Establishing the corporation will remove the middle man, allowing us to be more responsive in providing loans to farm businesses.

“We also will be able to deliver a nationally consistent program focused on the needs of Australian farmers.

“Establishing the corporation will be a significant change in the way the Commonwealth works with farmers during times of need.”

Mr Joyce said the RIC would also have a “client focused culture” that was receptive to and understands the unique nature of farming.

He said the farm business loans offered by the corporation would help viable farm businesses return to normal operating conditions – but would not be the same as those currently offered through the states.

“The program will be broader, with loans drawing on constitutional authority that includes the Commonwealth's trade and commerce and external affairs powers,” he said.

“Existing loans which have been delivered by the state and Northern Territory governments will continue to be managed by those state delivery agencies for the life of the loan.

“As well as administering farm business loans, the corporation will administer the government's National Water Infrastructure Loan Facility.

“These projects will stimulate investment, economic growth and increased agricultural productivity in rural and regional economies, helping take the people in those areas ahead and giving them a better economic future.”

Staff recruiting process underway and asset write-offs extended

The government’s advertising for a chairperson and two board members for the RIC has also commenced and applications to find a permanent CEO for the Australian Pesticides and Veterinary Medicines Authority (APVMA) to be based in Armidale.

“It’s a big job, but I know that there is somebody out there who is just as committed as I am to delivering long overdue improvements to the APVMA’s performance and improving access to agricultural and veterinary chemicals for Australian farmers,” Mr Joyce said.

“Based on the incredible interest we received for the two Armidale based jobs advertised last month, which attracted more than 30 applications, I would expect a very strong response again as we continue our decentralisation program to grow jobs in regional Australia.

This week Small Business Minister Michael McCormack also welcomed the passing of legislation in the Senate to extend the $20,000 instant asset write-off that’s been a popular budget measure for small businesses, including farmers.

“From a Greek café in Parramatta which told me about the new kitchen equipment creating a ‘chain reaction’ in the local community and improving staff morale, to the Bundaberg jeweller whose new drill will help the family enterprise make its product more efficiently, I know this program helps small business grow,” he said.

“Already, a manufacturer of silo equipment in the NSW Central West is seeing an increase in orders for farm grain feeders and catering companies in regional Western Australia are looking to buy new fridges, thanks to this government’s extension.

“We also redefined ‘small business’ to a $10 million annual turnover, up from $2 million.

“This means thousands more small businesses are now eligible for the write-off, as well as paying less tax.”