Heat on cabinet over drought assistance

15 Dec, 2014 06:50 AM
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Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce: tensions over drought policy and rural debt are flaring at a time when internal Coalition debate dominates headlines.
The Coalition is straining over the issue of farmers being left destitute by banks
Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce: tensions over drought policy and rural debt are flaring at a time when internal Coalition debate dominates headlines.

ANGER among National Party MPs at banks' treatment of drought-stricken farmers is creating dangerous divisions in Cabinet, threatening further instability for the Abbott government.

National Party sources have confirmed the Coalition is straining over the issue of farmers being left destitute by banks, and Nationals Whip Barry O'Sullivan told Fairfax Media he was willing to cross party lines to protect his constituents.

Illustrating the anger, Queensland MP Robbie Katter, son of federal independent Bob Katter, said: "If (Agriculture Minister) Barnaby Joyce is not willing to cross the floor over this then he values his job in cabinet more than the farmers' livelihoods."

The dispute about debt-stricken farmers is flaring at a time when internal debate about the power of the Prime Minister's office and Coalition recriminations about the failure to sell Budget measures has dominated headlines.

Senator O'Sullivan, who will introduce a bill in the Senate next year to make it illegal for banks to foreclose on drought-hit farmers, said he was willing to deal with anyone in the Senate to get action.

"I'm telling my own government as it starts to wander over to the crossbench, don't forget to give me a glance," he warned.

"The National Party has been a very good Coalition partner in Canberra but this is a once-in-a-generation sort of crisis we have in Queensland."

Sources also said the illness of Nationals leader Warren Truss and speculation about his longevity in office has led to rising angst in Liberal ranks at the prospect of "Barnaby Joyce, Deputy Prime Minister".

Amid the tensions, Mr Joyce's office contacted three cabinet ministers last week to hose down claims in an open letter that has gone viral online that he openly refers to free market Liberals as "the s**ts in cabinet" for refusing to consider greater financial aid for drought-hit farmers.

The letter then identifies "uber-cool, city-centric" Communications Minister Malcolm Turnbull, Trade Minister Andrew Robb and Environment Minister Greg Hunt as the ministers who had provoked Mr Joyce's ire.

A spokesman for Mr Joyce said he "categorically denies using that language and also has no beef with those ministers".

Reports of Mr Joyce's collision with cabinet colleagues began at a recent rally in Winton, central Queensland, over the $60 billion farm debt crisis that has seen banks kick established farmers off their land.

At the rally, Mr Joyce alluded to friction in cabinet saying: "I'm being honest with people. If someone says 'start a rural development bank', I'm not going to get that through [cabinet]. You can only get that through if you've got the numbers, and it's just not going to fly."

An open letter by farmer David Pascoe, comparing the situation to Depression-era America, written after the meeting, went viral with the help of broadcaster Alan Jones and has been viewed more than 2 million times on social media.

In the letter, Mr Pascoe refers to Mr Joyce at the Winton rally as being in a "bitter blue-funk kind of mood that saw him mostly hunched over and staring at the floor".

"Joyce cannot get support from what he calls 'the s**ts in Cabinet' to create a desperately-needed Redevelopment Bank so that these farmers can get cheap loans to tide them through to the end of the drought," Mr Pascoe writes.

Mr Pascoe, who flew to the rally with Mr Jones, conceded Mr Joyce's words had come to him via a "third party" but said he stood by his letter, which has been credited with raising the pressure on banks.

ANZ last week announced a 12-month moratorium on foreclosures in the drought zone.

Senator O'Sullivan confirmed the divergence between the Nationals and Liberals on the issue of farm assistance. "Our Coalition colleagues are dedicated to free market philosophy, that water finds its own level. They tend to think we in the Nationals are inclined towards protectionist policies," he said.

A government source said: "Barnaby Joyce has a pretty good relationship with Liberal ministers but you can safely assume he drives people like [Finance Minister] Mathias Cormann up the wall with some of his views."

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READER COMMENTS

x
15/12/2014 7:12:53 AM

Tends to be an east Coast political football, how about Drought relief that is not distorted by States influencing an outcome, a level access field for all. This certainly is not the case for WA growers impacted by protracted drought.
JC
15/12/2014 7:21:09 AM

It is a very thin line that the pollies walk on this issue - talk of legislating to make it illegal for banks to foreclose could see avenues for finance for farmers disappear very quickly!
farmer Di
15/12/2014 7:28:41 AM

Way to go Barnaby. I'll take you for deputy PM any time. And listen up Campbell.
Helen Clark
15/12/2014 7:34:01 AM

When Australia is owned by overseas investors maybe the Government will notice. We are slowly selling ourselves out. We need to protect our Farmers.
Bushfire Blonde
15/12/2014 9:03:30 AM

JC, who would want any more finance from the Australian Banks - they are charging the highest rates in the Western World - about double those of America, Europe, England & Japan. And if you happen to breach the limit of your existing facility, they charge 16.72%! They deserve every bit of bad publicity that they are getting and give Alan Jones a medal! By the way where is Bush Basher Bill on this one - has his heavily subsidised Internet Connection broken down?
LC
15/12/2014 9:30:44 AM

X, obviously your local Coalition MPs are not as good or as interested in looking out for your needs. Better get on the phone to them and tell them to do something instead of playing politics with farmers future and ideologies over fake free markets.
Discusted
15/12/2014 9:36:54 AM

I have a news flash for you JC....the banks have already pulled the plug on Agriculture. Good luck getting them to finance you.
Qlander
15/12/2014 1:10:29 PM

Banks making sure people they loan money to will actually be able to pay it back before they give it to them. Is not a bad thing, for starters it does away for the need for 'risk' premiums on interest.
contrarian
15/12/2014 3:22:27 PM

Everyone take a deep breath. Droughts suck, markets are unpredictable, but they are foreseeable forces in ag. Banks , or at least Australian banks are public companies beholden to their shareholders with a responsibility to loan money to customers who then repay it. On the whole they are a beneficial keystone within our economy. There are some isolated instances where it seems the bankers actions are questionable if not downright unconscionable , but these are definitely in the minority. The rest of my compatriots in strife are victims of asset value correction . After overpaying for joints.
Bushie Bill
15/12/2014 3:54:24 PM

When I can get a cheap loan to buy a pie factory in the western suburbs or to develop a block of apartments in Bondi, it will be ok to give away money to unsustainable non-viable RARAs. When is my money truck arriving?
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