A NEW Regional Investment Corporation (RIC) will be implemented by a re-elected Coalition government to streamline and fast-track the delivery of Commonwealth drought loans and lending for water infrastructure projects.
Deputy Prime Minister and Agriculture and Water Resources Minister Barnaby Joyce revealed the planned reforms during his National Party leaders’ election campaign address, held at the National Press Club in Canberra today.
In outlining the promise, Mr Joyce said the RIC would be established as the single administrator for the $4.5 billion in Agriculture and Water Resources portfolio financing and concessional loans initiatives, cutting out States and Territories as problematic middlemen.
The move aims to overcome bureaucratic inertia caused by ongoing disagreement and infighting at various levels of government and across political factions, in delivering drought support loans to struggling farmers.
Recently, the Australian National Audit Office (ANAO) released a report highlighting major failings in the provision of farm finance loans and drought concessional loans to producers, managed between Labor and Coalition governments over recent years, following the scrapping of the Exceptional Circumstances drought policy.
The ANAO report also made several recommendations to improve the loan delivery programs, including for Mr Joyce’s Department.
Mr Joyce has also accused Victorian Labor Agriculture Minister Jaala Pulford of “crude politicisation” of the dairy concessional loans program to support milk producers hit by the shock pricing crisis that he announced during the election campaign period.
Today, he said the Coalition was committed to streamlining Commonwealth financing and concessional loan processing to enable new dams to be financed quickly and ensure drought loans were speedily approved, to help farmers in need.
“No longer will the Commonwealth have to barter with State governments to process drought and dairy concessional loans to help farmers,” Mr Joyce said.
“Under a re-elected Coalition government we will be able to deliver this support direct to farmers in need.
“There is a clear need for such an institution, as we have seen over the past few weeks where the Victorian Labor government delayed delivery of dairy recovery concessional loans by playing crude political games.”
Mr Joyce said the Corporation would administer funds relating to drought concessional loans, the $2 billion National Water Infrastructure Loan Facility and loans already delivered under the drought recovery and farm finance concessional loans schemes.
He said the new Corporation would be fully funded from interest payments on the Commonwealth loans schemes.
“By cutting out the middlemen and avoiding the need to pay administration funding to the States, the new Regional Investment Corporation should be able to deliver cheaper finance options to farmers,” he said.
Mr Joyce said the RIC’s establishment was a sign of the Coalition’s strong commitment to supporting farmers in hardship and determination to incentivise the States to build job-creating, nationally significant water infrastructure and generate improved opportunities for regional communities.
The ANAO report pointed to various shortcomings caused by a rushed design processes for the $420 million Farm Finance Concessional Loans Program announced by the former Labor government in early 2013.
Labor’s program was designed to provide loans that assisted farmers in dealing with short-term viability issues caused by low commodity prices, high input costs and an ongoing high Australian dollar, at that time.
After the 2013 election, Agriculture and Water Resources Minister Barnaby Joyce reworked the scheme to direct funding towards larger States like NSW and Queensland facing more immediate drought pressures, rather than Labor’s equal distribution method.
The ANAO report also considered the Drought Concessional Loans Program, which State agencies also deliver on behalf of the Commonwealth, offering five-year interest-only loans at a maximum of $1m or up to 50 per cent of the farm business’ eligible debt.
The report said, as of February 29 this year, there were 410 farm finance concessional loan recipients totalling $196m and 320 drought concessional loan recipients at $192m.
It said the effectiveness of the Department’s design and establishment of the Farm Finance Program was adversely impacted by various factors but primarily its limited experience, and that of the Australian government, in delivering such programs.
Other factors were the condensed timeframe set by government to design and implement the program once a public announcement was mad; and the Department’s inability to appropriately consult with the intended delivery partners prior to the program’s announcement, due to confidentiality considerations.
The report made four main recommendations which the Department agreed to, including to develop a program evaluation strategy for current and any future concessional loans programs and to publicly report on established performance measures.
Colin Bettles
Has been the Canberra Bureau Chief for Fairfax Agricultural Media since 2010 - survived the hung parliament - former media manager at Western Australian Cricket Association now covering national agricultural and rural issues in federal politics.
Has been the Canberra Bureau Chief for Fairfax Agricultural Media since 2010 - survived the hung parliament - former media manager at Western Australian Cricket Association now covering national agricultural and rural issues in federal politics.
