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Janet on the Regional Investment Corporation

Speeches in Parliament
Janet Rice 16 Oct 2017

I rise to speak on the Regional Investment Corporation Bill 2017. I'd like to start with the bits of the proposed legislation that sound, on face value, to be what the Greens should be able to support. The primary function of the proposed Regional Investment Corporation is to administer business loans to farms and to finance water infrastructure projects. In and of themselves, these sound like two decent propositions. But, when you look closely and read the fine print of what's included in this legislation, it is clear that the bill isn't anything so simple. It's very clear that this bill shouldn't be supported—that it would be setting up, basically, another dodgy slush fund for the corporate mates of the government.

With regard to loans to farmers, there's a long history of government lending to farmers, supporting them in times of financial distress, and, in some cases, providing an alternative to the predatory behaviour of the big banks. Most importantly, the government has the ability to step in in times of drought, which is an absolutely critical role in an age where we can see droughts becoming more prevalent and harsh and affecting more of the country. Given the impacts of climate change, with global warming affecting our country, and given the lack of action by this government on addressing global warming, it is to be expected that, very sadly, we will continue to see more extreme and more frequent droughts.

So, with the power to administer business loans, the Regional Investment Corporation looks, at first glance, to be set up to facilitate these loans to farmers in a timely manner. However, first glances can be very deceiving, and I'll come to these deceptions later.

It is clear that, with regard to lending by banks, there is a political appetite for reform. The 2016 inquiry into the failure of loans provided by banks uncovered yet more dubious conduct by the banks, including banks not providing property evaluation documents to farmers, and banks charging unreasonable fees for compulsory property valuations, re-evaluating farms to engineer mortgage defaults and using single organisations that are known to undervalue properties.

The Greens agree with both the government and the Australian National Audit Office that there have been problems with the existing arrangements for the government's concessional loans programs and that farmers haven't been able to access the loans as easily as would be preferred. We also acknowledge the submission of the National Farmers' Federation during the committee inquiry into this proposed bill, which was supportive of the bill, stating that there is hope in the farming community that the lag between political announcements about farm business loan programs and the actual delivery will be significantly shortened. Thus, during tough seasons, a streamlined and centrally-administered farm business loan program could prove vital to farmers across the nation.

However, the bill being proposed by the government is far from the solution. On the one hand, yes, we've got a problem. But it's a very different question as to whether the proposed solution is the best thing to meet that problem. The answer to this egregious, predatory behaviour by the banks is not to give unfettered power to a minister without parliamentary or even cabinet oversight.

The Greens are concerned that, in setting up this Regional Investment Corporation as proposed, the minister has complete discretion as to the creation of the operating mandate and the classes of loans that the Regional Investment Corporation will supply to farm businesses. And there is very little in the legislation to guide or to limit these decisions. We are also seriously concerned about the ability of the Regional Investment Corporation, through a disallowable instrument, to create totally new classes of loans, not currently contained within the legislation. This is a radically new and dangerous idea—that the minister responsible for a government corporation should have such a wide-ranging ability to change its operational objectives, the very objectives of the corporation, with very limited parliamentary or cabinet oversight. It is putting far too much power in the hands of one minister.

A second function of the Regional Investment Corporation is to administer, on behalf of the Commonwealth, financial assistance for water infrastructure projects that are granted to the states and territories prior to the enactment of the Regional Investment Corporation Act. Alarmingly, this bill would also allow the minister to have the power to direct the board to fund specific water infrastructure projects without any requirement for a cost-benefit analysis, without any environmental impact statement and without any conflict-of-interest considerations for the minister. This is an obscenely unaccountable way to do infrastructure development, and it would put both the financial solvency of the Regional Investment Corporation and the health of our waterways seriously at risk.

We have already seen, as we have evidence of it from this government, what happens when too much power is held by a few select ministers when it comes to the water of the Murray-Darling. In the light of this, we would be going completely in the wrong direction if we were to give a partisan person like Minister Joyce further power to administer something as critical as water infrastructure and to direct investment in water infrastructure. He is a minister who has seemingly been incapable of tackling issues such as the proven water theft from the Murray-Darling Basin.

We also understand that the bill would allow the minister to propose the preferred location for the corporation. Minister Joyce stated in May that he intends to locate the Regional Investment Corporation in Orange, which is, of course, bang in the middle of the seat that the New South Wales Nationals lost to the Shooters, Fishers and Farmers Party at the 2016 by-election. We believe that this, in itself, is an indication of how the minister intends to use this corporation—as a facility to pork-barrel resources to the electorates that suit the political objectives of the Nationals rather than the policy needs of farmers. We cannot support this, and any parliament or government that is concerned about having an objective assessment of such critical decisions, including where a corporation should be situated, should not support the minister having the unfettered ability to direct where the location of the corporation is going to be.

But this is par for the course. We've already seen Minister Joyce, in the case of the Australian Pesticides and Veterinary Medicines Authority, disregarding a negative cost-benefit analysis and deciding to go ahead and shift the APVMA to Armidale, in his electorate. He has shown how comfortable he is with pork-barrelling, moving an entire agency into his own seat to shore up support in that seat. We have seen what the result of that has been. We have seen the decay in the institutional capacity of the APVMA. There has been an absolutely dreadful decline in the approval of new pesticides, animal medicines and other agricultural chemicals. That's what happens when you give such unfettered power to a minister—the minister has the power to make decisions that aren't in the national interest; they are in the political interest of that minister. Giving further unfettered power to any minister, let alone the current minister, will essentially allow him to direct financial spending wherever he thinks it's most needed and to serve his political agenda rather than the needs of farmers doing it tough. Not only that; given that the operating mandate is not disallowable, relevant ministers will be able to change the corporation's direction without parliamentary agreement. That's not democratic; that's not transparent. That is giving ministers a mandate to do backroom deals that serve their political agendas at the expense of farmers who need help. But, 'Oh well, sorry. You don't live in an area that is going to serve a minister's politically expedient needs.'

The Australia Institute has rightly expressed its concern about the explicit power that the bill provides to the responsible ministers over the recipients and the terms of the loans. Very substantial aspects of the corporation's lending activities would be at ministerial discretion. This creates serious risks of politically directed spending without rigorous oversight or analysis. Of course, this is familiar too. This is exactly the criticism—quite justified and serious criticism—of the government's proposed Northern Australia Infrastructure Facility. The government has form in setting up these financial institutions to fund projects that are going to serve their political interests and serve the interests of their corporate mates. We see it across the board from this government. They create unaccountable entities which are stacked with ex-lobbyists and industry interests and they avoid any trace of transparency and accountability.

We expect that the government, in their contribution to this debate, will raise the Clean Energy Finance Corporation as a reference point. Because, yes, the CEFC creates its investment mandate by legislative instrument. But it's really important to note that the CEFC has much clearer parameters in its policy objective, on the classes of investments that it's eligible to fund and, unlike this proposed Regional Investment Corporation, there is absolutely no ability for the minister to direct resources to a specific project. As written, the Regional Investment Corporation would be legislated almost entirely by non-disallowable delegated instruments.

Finally, the Greens are still unclear on exactly what policy objective the minister is trying to meet with the creation of this corporation. We would welcome further measures to streamline the existing farm business concessional loans programs. There is a problem there and it does need to be solved, but the powers of this proposed Regional Investment Corporation are far too wide ranging and much too compromised by the heavy touch of the minister for us to be able to support this bill. So, given all of these programs, the Greens will not be supporting this bill and we'll be encouraging the government to return to the drafting table to create something that will actually help our farmers who are doing it tough, rather than the political objectives of the government.

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