Drought Assistance

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (14:31): I seek leave to make a brief explanation prior to asking a question of the Minister for Primary Industries and Regional Development on drought.

Leave granted.

The Hon. N.J. CENTOFANTI:The Advertiser reported today that a survey of more than 130 farmers has revealed that one in two farmers are struggling to convince their banks to lend them money. The opposition has been calling on the government to offer no-interest and low-interest concessional loans to drought-affected farmers for some months now. Alarmingly, one in two grain producers are struggling to access financial credit, with banks tightening conditions and. in some cases, refusing support altogether unless a formal drought declaration is in place.

As one grain producer put it, and I quote, 'Our bank advised that if a drought declaration is made, then it gives them more scope for hardship lending.' I think that single comment captures the crux of the issue. My question to the minister is: what actions, if any, is the government taking to ensure drought-stricken farmers have access to finance?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (14:33): I thank the honourable member for her question. First of all, I might refer to some comments made on ABC's Country Hour on 5 June with Gillian Fennell, the chair of Livestock SA. She says:

There's been a lot of producers who are asking for drought declarations to be reintroduced because they believe it will treat certain elements of things, especially dealing with the likes of ATO and banks. I'd like to advise producers, if your banks tell you that they are waiting for an official drought declaration that they are actually very incorrect.

That is true. I had a forum that I co-hosted with Primary Producers SA at the end of last year with pretty much all of the major financial institutions, and I am very concerned to hear that despite the undertakings they gave that all of their staff are aware that drought declarations do not happen, and because they do not happen they are not a prerequisite for hardship assistance from financial institutions, this is still occurring.

I believe it was Grain Producers SA who ran the survey that is being referred to by the member opposite. I will be asking Grain Producers SA if they are able to provide details of those who have completed the survey with this sort of response—and de-identify it—so that we can find out who these banks are and who was telling them this information, because it is wrong. It is the wrong information. If some members in the banking community are continuing to say this, I would like to be able to provide that information to the banking institutions because they have said they are telling all their staff that this is not required because drought declarations no longer occur.

So I am very happy if I have the details of which institution, which branch and, ideally, which staff member so that we can actually get that fixed, because that is incorrect and it's very unfortunate if that is still continuing to happen.

In terms of the other question around no-interest and low-interest loans, it was interesting at the forum, the round table, that I had with the Premier in the South-East last Friday with drought-affected farmers from the Mallee down to the Lower Limestone Coast and throughout that area. There were mixed views around whether that was actually the right approach—whether it is something that governments should be involved in.

We are all aware, I think, of the RIC loans provided by the federal government. The Premier and I have both been advocating to the federal government to look at those provisions, particularly the interest that is currently being charged. I can recognise that the interest charged is certainly lower than some rates that people have been quoting to me. I remember one farmer who said that the commercial rate being charged to him was 12 per cent. So for him the I think 5.2 per cent from the RIC loans, if I remember correctly, was certainly a benefit, and he had availed himself of that. But those who are able to access finance at rates that are closer to that discounted rate obviously won't see the benefit of a particular gap.

So it's something that is certainly within the remit of the federal government, more easily than the state government, and I do acknowledge that there are a variety of views around this, including within industry.