Senate to inspect “Barnaby Bank” claims

The RIC spearheaded the Coalition’s $240 million agricultural policy unveiled by Agriculture and Water Resources Minister Barnaby Joyce in last year’s federal election campaign and has been dubbed the “Barnaby Bank”.

An examination of the RIC’s enabling legislation by the Rural and Regional Affairs and Transport (RRAT) Legislation Committee was agreed to in late June, by the Senate, and is currently due to report its findings and recommendations by August 14.

The inquiry will test whether the RIC will meet core mooted goals like helping to fast-track the construction of dams and priority water infrastructure projects needed to stimulate investment, economic growth and increased agricultural productivity in rural and regional communities.

It will also investigate what the is cost benefit, to determine that it makes sense to locate the new Corporation at Orange and if the government’s farm business concessional loans program and National Water Infrastructure Fund will be budget neutral over their life-span.

Another angle of inquiry will be reference to the Australian National Audit Office’s report in May last year, which highlighted flaws in the federal government’s capacity to deliver drought support measures effectively to farmers.

The ANAO report into the Department of Agriculture and Water Resource’s administration of the farm loans program attacked shortcomings mostly caused by a rushed design processes.

The National Farmers’ Federation has welcomed the RIC as means of streamlining the delivery of drought support and other loans to farmers by removing state bureaucracies and is expected to make a submission to the Senate Committee inquiry, along with state farm peak bodies.

The investigation is also set to take evidence from state governments and the Department which administers the concessional loans that are handed to state and territory governments, via the $2b National Water Infrastructure Loan Facility, to co-fund the construction of water infrastructure.

The Fund’s administration and operation are due to transfer from the Department to the RIC, upon its flagged establishment in 2018, along with the management of any new drought loans approved to needy farmers.

The Senate has also raised possible hearing dates for the inquiry in early August (8-10), if needed, while public submissions are due by July 13.

The RRAT Legislation Committee is chaired by Queensland Nationals Senator Barry O'Sullivan and WA Labor Senator and veteran Committee member Glenn Sterle is Deputy Chair.

Victorian Greens Senator and the party’s agricultural and rural affairs spokesperson Janet Rice is also a Committee member.

The Regional Investment Corporation Bill 2017 was introduced into the Lower House last month following revelations it would be based in Orange.

In his speech to the Bill, Mr Joyce said the RIC was announced during the 2016 election campaign, “to be the single delivery agency” for the Commonwealth's farm business concessional loans program, the National Water Infrastructure Loan Facility and any future programs.

He said concessional loan programs have been delivered through the states “But the fact is that delivering through the states is unwieldy and there is a lack of consistency in delivery across the country”.

“Currently, the Commonwealth has to negotiate separately with each state government to change an existing arrangement or roll out a new program to farmers,” 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.”

But Mr Joyce 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 April 30, 2017”.

“The Regional Investment Corporation will have a client focused culture that is receptive to and understands the unique nature of farming,” he said.

Amid a raging debate over the decentralisation of government agencies and a concerted push by the Nationals, Mr Joyce has told media be expects the RIC - which had a $28.5m allocation in this year’s federal budget to establish it by mid-2018 - could base up to 100 staff once fully operational.

He says it “makes sense” to base it in Orange given an existing base of agricultural investment institutions like the NSW Rural Assistance Authority and Macquarie Bank’s Paraway Pastoral livestock enterprise.

Meanwhile, an ongoing inquiry by the RRAT References Committee into the effect of market consolidation on the red meat processing sector is due to release its final report on August 17.

The inquiry first started in March 2015 and lapsed due to last year’s double dissolution election but was re-referred in the new parliament and has had seven different reporting dates.

Another inquiry launched in September last year into the Australian dairy industry, by Senate Economics References Committee, has had its reporting date extended for a fourth time.

The original reporting date was set for February 24 this year but has now been pushed back again to August 10.