Katter to ransom PM over debt buyback for flood-hit farmers

Katter to ransom PM over debt buyback for flood-hit farmers


Politics
Member for Kennedy Bob Katter. Photo Dominic Lorrimer

Member for Kennedy Bob Katter. Photo Dominic Lorrimer

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Concessional loans don't cut it and government must step in to restructure pastoralists' bank debts, says Bob Katter

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Bob Katter is warning Scott Morrison he expects support for his plan to fund a bank debt buyback for flood-hit North West Queensland cattle producers.

Mr Katter wants the government to take on pastoralists' existing debts and charge them discounted interest rates.

Media reported yesterday Mr Katter had won support for a concessional loan scheme after he threatened to vote against the precariously-poised federal government.

But what  Mr Katter really wants is far more ambitious.

He demands the federal government buy bank loans using a $4 billion taxpayer-funded rural loan facility - the Regional Investment Corporation - which offers loans with 2.5 per cent repayments.

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Most producers were cash-strapped after years of drought and would struggle to repay a new concessional loan scheme on top of their existing bank debts.

“The banks won't extend any more credit to these businesses, and I don’t think cattlemen can take on any more debt anyway,” Mr Katter said.

Mr Katter wants the RIC to absorb flooded cattle producers' entire debt burden, which means all their repayments would be at a concessional rate of 2.5 per cent.

The RIC could also extend credit on top of existing debt, to rebuild farm infrastructure and restock cattle herds.

If Mr Katter doesn’t get his way, he’s threatening to withdraw his vote from the government in the last seven sitting days which remain in the Lower House before the federal election is due.

“I’ve got a very short fuse. People tell me I’m crazy and I wouldn’t deny that. I could do anything,” he said.

Mr Katter believes the banks would likely agree to sell their loans at 30pc for two reasons.

Firstly, banks need a publicity boost after damning misconduct findings from the banking Royal Commission.

Also, many producers don’t have the capacity to meet their current repayments.

“These are bad debts now and I’d be surprised if we can’t buy them at a discount, given the brutality of what would happen when they start to foreclose on these people,” Mr Katter said.

His plan would see the RIC buy a theoretical debt of $1m off a bank, with repayments of $60,000 to $80,000.

That debt would be transferred to a concessional rate of 2.5pc, cutting repayments to around $20,000.

“You could borrow another $300,000 to restock and rebuild and the repayments are still only worth $30,000,” Mr Katter said.

The Katter’s Australia Party leader represents the vast North Queensland electorate of Kennedy where the majority of livestock producers are still counting the costs from unprecedented flooding.

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