KAP Member for Mt Isa Rob Katter has put forward a lifeline for Queensland producers, with the introduction of a bill devised from the recommendations of the Rural Debt and Drought Taskforce.
The Rural and Regional Adjustment (Development Assistance) Amendment Bill 2016, introduced into Queensland Parliament yesterday, will operate as a reconstruction authority to help stabilise the agricultural sector.
The proposal is to establish a concessional lending facility, more effective than the existing drought concessional loans.
“We already support the Clean Energy Finance Corporation which plays a similar role for the renewable industry; if the public thinks that it is important that we have an appropriate lending mechanism to stimulate that industry, why not do the same for agriculture?,” Mr Katter said.
“When you are looking at trying to fix this industry the biggest problem is rural debt, the focus should be to provide structural change and a pathway to put this industry back on its feet.
“We aim to create an alternate lending instrument that may operate like a bank but takes viable customers that don’t fit the banks’ criteria,” he said.
Mr Katter said the bipartisan supported taskforce into rural debt and drought released a number of recommendations, all highlighting a need to find new ways to tackle the debt problem in regional Queensland.
“As part of that taskforce there was a strong evidence to support the fact that most people are burdened by the interest they are paying on their debt, and that current measures are not working,” Mr Katter said.
“According to DAF figures as of December 2015, of the 265 drought concessional loans, only four went to the Mount Isa electorate.
“That area represents a third of Queensland and is arguably the worst drought affected area, the current scheme just does not work and does not do its job.
“The industry out there is dying with no help at the moment,” he said.
The Northern MP believes the bill is a viable solution, that is very sympathetic and possibly beneficial to the Queensland taxpayer.
“Everyone says that it is terrible that we cannot support agriculture, and we cannot prop up industries that are unviable,” Mr Katter said.
“We have to ask the question: what is unviable and what is uncompetitive? If we look at OECD (Organisation for Economic Co-operation and Development) figures, the last time I checked the average subsidy and OECD nations for agriculture were 38 per cent, and the equivalent for Australia was around 5%”.
“You then have to ask what fair competition means,” he said.
Mr Katter said his proposal is not a new one and similar models have in fact operated twice in Queensland’s history and multiple times in the nation’s history.
“One of the mechanisms used previously was the QIDC; it was sold for over billion dollars, a benefit to the taxpayers,” Mr Katter said.
“These sorts of vehicles can be of benefit, while in the meantime, you are enabling industries and reinvigorating them and the towns they support.”
A variety of banks have also shown interest in the scheme highlighting the need for government to create a home for viable producers.
“There needs to be somewhere for these people who are good producers and who will be fantastic contributors for the next 30 or 50 years to the Queensland economy,” Mr Katter said.
“These people have hit hard times and they need to get through this period. Drought concessional loans are not doing the job.
“This problem has been around for four years, it has not cropped up overnight,” Mr Katter said.
“We needed a solution years ago, there is a real risk that banks will hit the red button on places unless we progress with this bill; we must act now” he said.