Speech

E&OE

SUBJECTS: Farm Finance Package Announcement

TREASURER: First of all it’s great to be here and thanks to our hosts today. But we’re here today to make some important announcements about the future of Farm Finance. I’m joined by Joe Ludwig, our Agriculture Minister and by Bob Katter. By Rowell Walton, and also Cathy O’Toole and Bronwyn Walker.

We’re here today because this is a very, very important set of initiatives. Viable farmers are struggling under the weight of a high dollar, and of course reduced land values. That means a lot of businesses, that are good businesses for the long-term, really need some breathing space. They need some additional assistance and that’s what this Farm Finance package is all about; to provide some help to those farmers that are really battling against the headwinds of a high dollar and other factors within the overall rural environment.

So, great to be here, it’s great to be here with a number of people who’ve made a significant contribution to this package. At the end of the day this is a government package and it won’t necessarily be everything that people in the rural community would wish, but it is a very genuine attempt to address a series of issues when it comes to Farm Finance which will assist hard working farmers in our community.

So thanks very much to Bob Katter and all of the consultations he’s done in the rural community, to Rowell Walton and all of his input. And also of course to Agriculture Minister Joe Ludwig, who’s been working very hard on this package.

We had a Farm Finance Rural Debt Roundtable at the end of last year that certainly helped the Government a lot and we’ve continued to talk to the community. We understand how important it is to get access to concessional loans and that’s what this package does, and I’ll throw to Joe in a minute to talk about the detail, but concessional loans of up to $650,000 will

be available for viable farmers to assist them, particularly with debt restructuring. This is very important. In addition a number of other measures which are also going to assist in terms of providing financial advice to farmers.

It’s great to be here today. Thanks to everyone who’s been associated with the development of this package. And I’ll throw to Joe.

LUDWIG: Thank you Deputy Prime Minister. It is great to be here. This is good news for farmers right across Australia. I had an opportunity of working with the Deputy Prime Minister through that roundtable, and what came from that was essentially four elements.

The first element is concessional loans up to $650,000 and that will provide that assistance to farmers who need that assistance just during this difficult period that they’re going through. Right across Australia you do see a patchwork, you see farmers who have been very efficient and effective over a long period of time, got through drought and they find that with the high dollar, with depreciating land values, with high input costs, that they just need a little bit of assistance to be able to manage through this period.

In addition to that, what the roundtable also talked about was how we could support them through debt mediation. What we find is a patchwork across Australia with debt mediation. In Victoria they have legislation, in New South Wales they have legislation, but nowhere else is there the ability for farmers to be able to sit down with their bankers to be able to work through on a fair and even basis some of the issues that get thrown up. So what we want to do is to progress debt mediation, nationally consistent legislation across Australia to be able to help farmers in their conversations with the banks.

The third element of the package deals with what the National Rule Advisory Council also recommended, just recently on Friday, they came up with a consistent approach to allow farm managed deposits to be more flexible for our farmers. That gives farmers the ability to smooth their incomes, to be able to support farm businesses off farm income and also give them an extra tool to manage through difficult times. So it is welcome from the National Rule Advisory Council recommendation, one that I support, one that I will certainly progress.

In addition to that, the last element, is what farmers tell me – that they do need that additional financial advice. Rural Financial Counsellors right across Australia, 110 of them have been providing really good support for our farmers and producers across rural Australia. What we want to do is add to that, provide an additional 16 to give them that extra advice right across Australia. Because in those discussions with banks, in those discussions when they sit around the kitchen table and look at their finances, Rural Financial Counsellors play a vital role and all of that through the assistance of that roundtable, and I know Bob Katter played a vital role in being able to draw all those people together. Rowell Walton also provided that real support to be able to give us the lead as to what those four elements should look like.

Now, in addition to that package, of course what we do have is a National Food Plan to come, a land sector package to provide support in recognising how we can go to a low carbon economy. All of that fits well, because what we want to fundamentally do is prepare and strengthen our base. Strengthen the farmers so they can prepare for the future. And this will give them that opportunity to strengthen that base so that they can prepare for the opportunities that will come through the Asian Century White Paper.

Thank you Deputy Prime Minister again. It’s fantastic to be in Townsville to be able to be with you to announce this package because as I travel around rural Australia, you do talk to many from farmers, the producers, and the dairy industry who then say we do need that little bit of extra support to just get us through some of these strong headwinds.

KATTER: I want to put on record the gratitude of myself. I represent the biggest cattle-growing area in Australia and I want to put on public record our very great gratitude towards the Government on this.

I will also make the point that I’ve never see this done before, where the States have not put forward matching monies as well. So whilst there’s been $400 million put on the table by the Federal Government, we would like to see the State Governments, and if they don't, then don't go out there and say that you’re for the farmer, you've got no right to say that if you don't give that money. So with the $420 million of loans, and I stress that this is loans, there is no grants involved here or anything like that, this loans. The Federal Government is sticking their neck out for $420 million, and as I said I’ve never seen this sort of situation where the State Government - and the Federal Government have been kind enough not to make a political point here, they’ve not made that and they haven’t even made it conditional upon the State Government. But if the State Governments come to the party as they’ve always done before, it will make it a thousand million dollars. Rowell Walton is heading up the Rural Debt Summits throughout Australia, there are very grave problems in Western Australia, in Victoria in dairy, and of course particularly in the northern half of Queensland in the cattle industry. But, with your agreement, Rowell, come forward, who’s done an absolutely fantastic job. Rowell’s one of the biggest grain growers in Australia and has been heading up this taskforce throughout Australia. We wouldn't have got this breakthrough today without him. So whilst we thank the Government very, very sincerely and graciously today, we also want to put on record our thanks to Rowell Walton.

ROWELL WALTON: Thanks everybody. My voice has been a bit down for the last couple of days so we’ll just work through this quietly. I’d like to put on record for everybody in Australia the warmest congratulations to the Commonwealth Government for stepping up here. I think the Commonwealth Government are providing leadership in Australia at this time, particularly for rural people.

I want to thank the Commonwealth Government on behalf of all of those families who when they watch the news tonight will sit down at their dinner table and realise that somebody does care and that they may well be eligible for some assistance in the next couple of weeks.

I really think this is an important turning point in agriculture policy in Australia, and I really appreciate it from the Commonwealth Government.

Ladies and gentlemen this problem is much wider than just in Queensland, Bob. It stretches across into the Northern Territory and back into the north of Western Australia. The cattle ownership in the north are said to have 30 per cent of their operators actually in default in October when we had our first roundtable meeting. It stretches right down into the south of Victoria to the dairy industry and to the marginal and central wheat belt in Western Australia. This assistance will be really, really appreciated by many, many farmers. Thank you.

TREASURER: Over to you.

JOURNALIST: Mr Swan, Mr Katter mentioned that there was no condition for state premiers to step up. Collin Barnett in Western Australia this week announced an $8 million emergency assistance package for people in the wheat belt. He was criticised by his own MPs saying that didn't go far enough. Do you agree that wasn't enough?

TREASURER: Well we’d certainly like to see more. I’m acutely aware, particularly talking to Bob and Rowell, about what’s been going on in Western Australia. And Joe, I think, has been over there talking to them as well. So we’re acutely aware that there are patches in Australia, including in Western Australia, including in the cattle industry particularly in Queensland, stemming into the Northern Territory, dairy in Victoria where people are doing it really tough.

So what we’re putting on the table here is a package which recognises that many of these farms are viable for the long-term. We need them; we need them for the future of Australia. We need them to supply particularly the region. But at the moment there’s a conjunction of factors which, if you like, are conspiring against these viable businesses. And we think a package like this gives them some breathing space and it will be great if the state governments decided to add to this package so that we could do more for more farmers. Because I personally believe that agriculture has such a bright future in this country, particularly given the potential demand that is going to come from the region. But of course, we want our farmers to be in business, to take advantage of that, and that’s why this package has been brought forward in a very genuine way because we recognise that from time to time in our economy, parts of our economy suffer stresses and strains which make it difficult for people to see the horizon, or to get to the long-term. This is a package about the long-term, this is not a package about providing a hand-out, this is not a package about propping up a business which isn’t necessarily viable. This is a package which recognises the great strength of a whole range of rural enterprises across Australia that are threatened by a high dollar and other circumstances which are not working in their favour. We want them to be in business in the future, to do great business for their families, but to do great business for our nation. So this is a nation-building package recognising the importance, particularly of many rural properties which are largely family owned, who won’t necessarily have access to a great lot of finance that corporate Australia may have in different circumstances.

We want a mixture in our rural sector of people out there, the entrepreneurs if you like, or the family farmers – or whatever you want to call them – and we want to see them get there. We want to see them do well for Australia. We want to see them do well for themselves, for their families and for their children. So this package recognises all of that. So if the state governments were to get on board and build on it, well that’s terrific.

JOURNALIST: Is the Commonwealth effectively picking up the tab for the states?

TREASURER: First of all, we should be very clear about what the Commonwealth is doing here. We are providing concessional loans. And that is entirely appropriate. We’d like to see the states do a bit more. Concessional loans recognise some of the debt challenges faced by many of these businesses, caused by a disruption to global finance, the aftershocks of the Global Financial Crisis, the combination of a higher dollar coming with all of that. All of these things demand I think a bit of a helping hand that we are providing. But nobody is providing something for nothing here; we’re providing a concessional loan for hardworking people, recognising their circumstances and giving them a breather, if you like, from the weight that many of them are carrying which has got the potential to break their back. So what we’re doing here is, if you like, building up the resilience and strength of these

businesses by some additional help from the Commonwealth. We’re proud to do that and we’d like to see the state government pitch in as well.

JOURNALIST: (inaudible)

TREAUSRER: The Federal Government recognises that we are a great trading nation and as a great trading nation we export a lot of our produce, and we want to make sure that all of these farms are in the business of being able to do that as well. And they are around to reap the benefits and the prices which are going to come from increased demand in our region.

JOURNALIST: This is the second announcement within a month that you’ve made in Townsville with Bob Katter. Is there an alliance between the two of you?

KATTER: I think as the election gets close it might be a different sort of relationship, but let’s just say we’re batting on the same side of the fence on this. Look, there should be a bipartisan approach to this. Just to answer your question on Mr Barnett’s statement, it was reported in the media that a lot of it was for exit strategies. We don’t want to exit. It’s not about cattlemen or farmers it is about communities. If we lose 100 cattlemen from Richmond, I mean half the businesses in that town will close, and then two thirds of the jobs in that town will vanish. So I mean, we don't want an exit strategy – now some of that from Mr Barnett was very generous, we appreciate that. But really, the Rural Reconstruction Board State Bank approach which was used up until the 90s come upon us, this is the first movement we’ve had back to what has always been there in Australian history, so we’re very thankful that there is a move back to where we had a successful way of handling a crisis situation. This is the first move back in that direction. But it will be a very limited effect unless the states come in, and we must emphasise that.

TREASURER: I just want to answer your question about Townsville. Because you see, I am a Queenslander through and through. I’ve been up and down this coast all of my life, before I entered politics and I come here frequently since I’ve been not only as a Member of Parliament, but most particularly as Federal Treasurer. When I was here when we were in opposition and Mr Costello was the Federal Treasurer, I observed that he’d only been to Townsville I think once or twice in the whole twelve years that he had been Treasurer, and I said citings of Mr Costello in Townsville were rarer than citings of Migaloo. So, I made a point, because I believe that this part of Australia has so much to contribute to our economy, of coming here regularly. On many occasions I have actually been in the company of Bob and also not necessarily around election time. I’ll be in the company of anyone who wants to build our State up and build our economy up and make sure that we remain the powerhouse we are, and make sure that we build on that for the future.

JOURNALIST: Have you got any money to offer Townsville today?

KATTER: The benefit to this community, just down the road here, there is the big Meatworks, which you know provides effectively over 1000 jobs. That Meatworks is in very grave jeopardy because as a result of what is happening in the beef industry, out there prices are a third of what they were three years ago and they still have not bottomed out. So they are still falling. We lost five Meatworks the last time we had this crisis in the mid-70s, so this is very, very important years for Townsville, because there are 1000 jobs I can tell you, absolutely under threat at the present moment. So this is very, very big news for Townsville city.

TREASURER: Supporting jobs and economic growth is everything this Government’s about. Whether it’s in the rural sector, in our great services sector up here, in the manufacturing sector. The base of the Townsville economy is very broad and it’s a very important part of our overall growth story in Australia; with still low unemployment, solid growth, very big investment, lower interest rates and low inflation. They’re good strengths to have and we must build on those because we can't take our future for granted. But I guess part of what we’re on about here today is not taking the future for granted when it comes to our farmers, making sure that we put in place, if you like, a safety net, we give them a breather when it comes to some of the challenges they have with debt to make sure they get through the next few years and take advantage of what is surely going to come which is a revival of prices for some of the things that we produce which we have a world edge here.