Future of “Barnaby Bank” not guaranteed

Future of “Barnaby Bank” not guaranteed

Barnaby Joyce backing the Regional Investment Corporation.

Barnaby Joyce backing the Regional Investment Corporation.


ESTABLISHING a new Regional Investment Corporation at Orange in NSW to help deliver drought support loans to farmers is not guaranteed.


ESTABLISHING a new Regional Investment Corporation at Orange in NSW to help deliver drought support loans to farmers more efficiently in times of need is not guaranteed with Labor set to block legislation passing the Upper House.

A Senate report tabled this week from a short and sharp inquiry by the Senate Rural and Regional Affairs and Transport Legislation Committee made one recommendation, that the bill to formally establish the RIC be passed.

But a dissenting report by Labor Senators from the Senate inquiry said they believed the government had “neither established a policy rationale for the establishment of RIC nor justified the cost”.

“We recommend the Bill be rejected by the Senate on that basis,” it said.

“At the very least, the Government must address the governance concerns raised by the Senate Committee for the Scrutiny of Bills and other witnesses including the National Farmers' Federation.”

The RIC enabling legislation is currently before the House of Representatives with a debate on it due to occur today where Shadow Agriculture Minister Joel Fitzgibbon is likely to attack his counterpart Barnaby Joyce who is under extreme pressure due to unanswered legal questions about his dual NZ citizenship and eligibility to sit in parliament.

Greens Victorian Senator and party agriculture spokesperson Janet Rice participated on the RIC inquiry but her party’s position on voting for the legislation have not yet been made public.

With the support of the Greens and One Nation, the Coalition would have the votes needed to pass the RIC legislation in the Senate, or the three Nick Xenophon Team Senators and another crossbencher like Liberal Democrat David Leyonhjelm.

Labor’s dissenting report said the government had offered mixed messages on the RIC’s policy intent and failed to undertake a cost-benefit analysis to “give confidence that the $28 million cost of establishing and operating the RIC delivers good value for the Australian taxpayer”.

It said the government had also “deliberately structured the enabling legislation to minimise parliamentary scrutiny and/or veto of Ministerial directions”.

Labor also raised governance concerns saying the government had “failed to properly consider” the effectiveness of the RIC’s board size “with regards to the range of expertise requirements and safeguards against political interference”.

It also cited concerns that the government “intends to keep the ministerial review of the operation of the Act a secret”.

The RIC was a core election promise by Mr Joyce in the government’s agricultural policy revealed last year’s federal election and has been dubbed the “Barnaby Bank”.

It aims to try and remove state bureaucracies and set up a Commonwealth delivery agency for $2 billion in drought loans and other financial support and $2b in water infrastructure funding and is backed by farm groups.

That National Farmers’ Federations (NFF) inquiry submission – cited in the report – said it was “supportive of having farm business loans controlled and operated out of a central location, as there is less scope for funds to be lost through administrative costs”.

“There is hope in the farming community that the lag between political announcements about farm business loan programs and that the actual delivery will be significantly shortened,” it said.

“Thus, during tough seasons, a streamlined and centrally administered farm business loan program could prove vital to farmers across the nation.

“Paramount to a functional and useful RIC will be to eliminate unnecessary paperwork and to process applications in a timely manner.”

The Senate inquiry report revealed that NFF also shared concerns held by submitters about the size of the proposed RIC board and potential politicisation.

“The Pastoralists & Graziers Association of WA (PGA) argued that a board membership of three was too small, and that the governance arrangements 'enshrine political influence' into what should be a purely commercial operation,” it said.

‘It suggested that the size of the board and its composition should be similar to that found in private financial organisations in order to cover the range of qualifications, skills and experience listed in section 17 of the bill.

“Similarly, the (Australia Institute) queried whether a board of three members would be 'sufficient to effectively govern' the RIC and that there was a risk that the board would 'end up having a limited range of experience'.

“These concerns were also raised by the NFF.

“The Western Australia Department of Industries and Regional Development (WADIRD) also raised concerns about the proposed board in terms of both the membership under clause 16, and what constitutes a quorum under clause 29.

“It argued that as RIC is to manage a loan portfolio of $4 billion, and up to 1000 clients, while operating across all jurisdictions with variations in climatic and production zones, three members would provide an 'insufficient spread of skills and experience for effective governance'.”

In March, Mr Joyce revealed Orange would become the RIC’s home base aiming for mid-2018 to start, as part of the government’s decentralisation policy agenda.

The Regional Investment Corporation Bill 2017 was introduced into federal parliament in June.

A spokesperson for WA One Nation Senator Peter Georgiou said his party was still considering the proposed Bill.

The spokesperson said the RIC but had merits “on the surface - but we still have a number of concerns”.

Those concerns include where the scheme has been successfully administered, would the staff involved be retained in order to maintain a level of consistency, and what was the current cost versus the new one.

“The proposal is to base the administration of the $4 billion scheme from Orange - coincidentally in the Nationals held Federal seat of Clare - wouldn’t it be better to maintain State offices with oversight from a central office rather than having it all based in one town; especially from the point of view of Western Australia which is on the other side of the country,” the spokesperson said.

Senator Rice said the Greens were going to vote against at the second division in the house.

“The Greens have put on record that we have problems with the bill as it currently exists,” she said.

“This shouldn’t be read as the Greens landing on a final position on a potentially amended Bill.”

NFF CEO Tony Mahar said his group supported any attempts to streamline and improve the efficiency of delivery arrangements for drought assistance and other concessional loans programs.

“We want to ensure the Corporation has robust governance arrangements, has adequate transparency and independence and ultimately builds on the performance of State and Territory service delivery agencies,” he said.

“Ultimately the Corporation should aim to contribute to the resilience and productivity of Australian farmers.

“To that end, the Australian government has been constructively engaging with industry stakeholders, including the NFF and its members and we will continue to consult with government on the key operational settings in due course.”


From the front page

Sponsored by