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Get submissions in now for rural debt review

The Australian Reconstruction and Development Board have been referred to the Senate Economics Committee for report, and primary producers are being urged to have their say.
The Australian Reconstruction and Development Board have been referred to the Senate Economics Committee for report, and primary producers are being urged to have their say. Bev Lacey

THE Australian Reconstruction and Development Board have been referred to the Senate Economics Committee for report, and primary producers are being urged to have their say.

Submissions are open until February 10.

Miles farmer and economist Ben Rees has worked extensively on the Reserve Bank Amendment (Australian Reconstruction and Development Board) Bill 2013, and said the importance of everyday farmers telling the Federal Government exactly how the industry was performing could not be understated.

Mr Rees said the aim of the bill was to examine, reconstruct and improve the financial status of the Australian agricultural sector.

"This is about ordinary people telling their stories," Mr Rees said.

In essence, the aim was to rein in the spiralling rural debt while providing an option to banks and producers to guard against potential foreclosures.

Introduced into the Senate on December 5 by Independent Senator Nick Xenophon and Democratic Labor Party Senator John Madigan, the Bill has called for submissions detailing the extent of rural debt.

The Bill's background state's Australia has "developed a highly-regarded capability to provide its own foods and agricultural products, and to trade surplus produce for the sustenance of others".

"This capability has been diminished by recent events including a combination of adverse conditions originating beyond the farm gate, which have reduced farm incomes and imposed great strain upon production systems," it stated.

"Rural Australia is struggling under an insurmountable debt burden, characterised by low farm income and lending practices of financial institutions in deregulated financial markets.

"In 1980, debt in Gross Value Farm Production was at 32% and this has escalated to historically high levels of debt, reaching 135.4% in 2012.

"Forced sales are widening loan-to-value ratios, leading to a risk of 'fire sales', which could precipitate a raging financial contagion that may not be contained to rural and regional Australia."

It goes on to state the uncertainty and risk to the agricultural sector, and its associated industries, made reconstruction critical to return to a sound financial base.

"The ARDB will also play a vital role in researching and monitoring industries to provide advance warning of emerging problems and to initiate reconstruction, development or other activities as deemed necessary," it stated.

"The ARDB will provide a means of identifying and resolving serious financial imbalances, sectoral stresses and development shortfalls."

The Committee is due to report to the Senate by March 26, 2014. Email economics.sen@aph.gov.au, or post to Committee Secretary, Senate Economics Legislation Committee, PO Box 6100, Parliament House, Canberra ACT 2600.