Aug 2012

QUESTIONS WITHOUT NOTICE: The developing rural debt crisis

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Mr KATTER (Kennedy) (14:44): My question is to the Treasurer. The Treasurer would be aware that much of rural Australia is struggling under an insurmountable debt burden. Reliable sources continue to quote that between seven and 20 per cent of farmers are facing foreclosures within two years, and with forced sales widening loan-to-value ratios, fire sales must start, sparking a raging financial bushfire that cannot be quarantined from the Gold Coast, Norther Rivers and Cairns and an economy already undermined by falling metal prices.

In view of, and in thanking the Treasurer for his comments in the Financial Review, would he agree to meet with responsible agriculturalists, businesses and bankers to consider potential ways— (Time expired)

The DEPUTY SPEAKER: The member's time has expired. I allowed you to go over. Does the member for Kennedy have more to add to the question?

Mr KATTER: Would the Treasurer agree to meet with agriculturalists, businesses and bankers to consider prudential pathways forward?

Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (14:46): I thank the member for Kennedy for that very important question. The government does take very seriously the issue that there is an adequate supply of finance to our rural sector. Certainly, when I was in tropical North Queensland some weeks ago with the member, this issue was raised with me by a number of representatives from the farming community in the areas we visited. It is something I also have heard elsewhere in the country.

Whilst we had a very good flow of finance, considering global conditions during the global financial crisis, one of our strengths was the strength of our banking sector. So, prudent lending is also very important. I also know from the people I spoke to, with the member for Kennedy, that there are many people out there with very good businesses who are currently experiencing some challenges in terms of raising their finance.

That says to me that there is really an issue here. Therefore, I think it is a good idea that we get some representatives of the rural sector together with the banking sector and sit down and talk our way through some of these issues. So, I am pleased to say to the member for Kennedy that we will be having a rural finance round table as soon as we can in the coming months, most probably in Brisbane, to sit down and discuss these issues.

It is also a broader issue. It is not just about the rural sector. It is also about many in small business who are having these challenges. So I will take the opportunity to broaden some of those discussions out.

I take very seriously the challenges of our farming community because I think that in this country our farming community has a very, very bright future. The demand that is emerging from the growing middle classes in Asia is going to be a very important source of jobs and activity and wealth creation in our rural sector if we get all of the other policy setting right. It is not just a question of the flow of finance. I also acknowledge that there are questions about market power and a whole host of other questions we are looking very closely at. We have great faith in the future of the rural sector.

We also know that there are some particular challenges to the rural sector at the moment, particularly in my home state of Queensland—for example, the decision by the Newman government to slash 200 staff from the department of primary industries. I think that is very challenging for the rural sector in that state. Also, their decision to scrap the new biosecurity facility planned for North Queensland, for $18 million, is a dagger to the heart of the rural sector in Queensland. They are also closing the doors of an existing facility in townsville. These are big challenges for regional Queensland, as is the slashing of jobs right across our great state by the Newman government, completely contrary to a promise they gave to the people of Queensland.

Mr Hockey interjecting—

The SPEAKER: The member for North Sydney was warned earlier!

Mr SWAN: But we will work with the member for Kennedy because we come to the table in good faith.


SOURCE: Hansard www.aph.gov.au/hansard

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