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Wednesday, 6 December 2017
Page: 9950

Senator HANSON (Queensland) (17:25): I present the report of the Select Committee on Lending to Primary Production Customers, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator HANSON: I move:

That the Senate take note of the report.

Not long after I was elected in July 2016, at my first meeting with the Prime Minister, I requested that there be a royal commission into the banking sector. At that time, the Prime Minister was reluctant and didn't believe that it was necessary to have a royal commission. I've got to say, the Greens plus the Labor Party have actually supported the royal commission on this. We knew at the time that was not possible, so One Nation actually secured a Senate inquiry into the lending sector for primary production customers. It was a foot in the door, I believed. I hope, having had this inquiry—another one of many—that the inquiry and its recommendations are going to be taken into consideration in the royal commission.

Listening to this inquiry—it was first chaired by Malcolm Roberts, who was a senator but is no longer a senator in this place, and I then took the chair—I have to say that there were a lot of submissions from all Australians, and meetings were held across Australia. I think it's very important for this chamber and the people who will read this Hansard, or are possibly listening to the debate, to understand some of the stories that came out at the hearings and in the submissions. I think it's one of the most heartfelt Senate inquiries that anyone could attend; to listen to what many of our fellow Australians have been confronted with, and for their stories to be heard. These people have felt absolutely hopeless: that no-one was listening to them and no-one was interested in listening to try and make changes. A lot of them know there's no hope for them, but they're hoping that it won't happen to their neighbours, their friends or their relatives. Some are in hope that they may get compensation. When I read stories like this, these matters of primary producers in financial difficulties are not only commercial but also very emotional:

People's livelihoods, homes and whole lives revolve around the property. They are part of the community. When things go awry, it's not just one person that's affected; it's generally a whole family, and it can be generational.

The report goes on to quote another submission:

I have experienced and seen the impact of the recovery practices used by certain senior managers of a number of banks which have not only in some cases physically removed farmers from their homes, but also abused, threatened, intimidated and divided families to the point of unnecessary suicide.

In another submission from someone from the Roma area, the comments were:

You have no idea what is happening out there in the banks, I'm sorry. It is horrific. You should listen to how they can torture you for three or four hours. They twist your mind. At the end of it, you have no hope. You walk away with no hope. It is about two or three days later, when you will go to shoot a cow, that somebody will say to you in your head, 'It would [be] so much easier to shoot yourself'.

That's the sheer fact of it: the suicides that we are seeing and we will continue to see if we do not intervene and bring some justice. Then we go on to other stories, people and their comments:

For example, the committee was informed of a case of a cattle property in Queensland that was valued in 2009 at $3.3 million bare (i.e. no stock on it). In 2012 the receivers for the property valued it at $1.6 million bare, but ultimately sold it for $800,000 with 800 head of cattle given in. Given that 800 head of cattle would be valued at approximately $400,000, the property itself was sold for only $400,000.

I go on here with another one. It was alleged that:

… his receivers charged approximately $700 000 over three years. He provided the committee with an example of what he considered unreasonable fees charged by his receivers:

   "... we had no money, nothing, because all the finances were cut off. When we had to pay an account, a phone bill or something like that, we had to get their permission to write the cheque out so that they could pay it—but they charged us $40 for every cheque. Whether it was only a $20 cheque or a $50 cheque, they charged us $40 on every cheque."

The committee heard from Dr Graham Jacobs, a former MLA for the region of Eyre in Western Australia, who outlined a situation which involved exorbitant receiver fees that he had come across during his time as an elected representative. He said:

   "I sat with a farmer east of Ravensthorpe as he told me this at his kitchen table. The receiver's fees were charged against the remaining farm asset and reduced all remaining equity. The costs could be exorbitant. In one case, when they appointed the receiver they took over the spraying program to knock down weeds. This was ordered by the receiver. That cost $350,000. An earlier program, which could have been done by the farmer, would have cost $100,000. The ongoing management fees by the bank receivers and the lawyers can be up to $50,000 a month."

There are many more cases here. Some recommendations of the committee are very important to the people, such as:

The committee recommends that:

the government introduce higher standards of accountability and transparency for insolvency practitioners regarding the costs they incur while conducting receiverships;

insolvency practitioners be required to disclose their estimate of costs of the receivership prior to being engaged;

insolvency practitioners be required to account for all incurred fees and outlays and report these to both the lender and the borrower; and

insolvency practitioners be required to provide monthly reports to the lender and the borrower on their farming management and fees incurred (including future plans).

The lender is not told anything. He's not told about fees; they are not advised whatsoever. The committee recommends that:

… statutory time limits for legal proceedings be removed in circumstances where a bank or its agents have changed the details of loan documents without the customer's knowledge, or the bank or its agents have acted unethically in the course of the commercial dealings with the borrower.

Another recommendation is:

… introducing minimum 90 day notice periods for:

all general restriction clauses and covenants (except for fraud and criminal actions);

any decision with respect to the rolling over of a small business loan; and

any decision to commence action against a small business customer for default under a credit contract.

Another recommendation is:

financiers be prohibited from making fundamental, unilateral changes to the loan agreements where such changes are detrimental to the customer;

provided that a customer is meeting all terms and conditions of a loan, financial institutions must be required to bear any costs associated with a variation of a loan term, if the variation is sought by the financial institution;

should a customer suffer any detriment as a result of any unilateral change to a loan agreement by a financier, that the financier be liable to pay for those losses and damages.

There are many more recommendations here. We're actually advising that the new body that is being set up, the Australian Financial Complaints Authority, be able to:

consider disputes relating to loans of up to $10 million and award compensation up to $5 million, with these figures to be reviewed every 5 years;

review a customer's complaint within a three year period after the completion of farm debt mediation if the customer provides reasonable grounds for review …

There are other recommendations here. There are 27 recommendations.

I think a big thank you must go to Malcolm Roberts for the tireless work that he did in setting up this inquiry and for working with the farmers. A big thank you must also go to the farmers themselves. Those people have been through so much hardship. When they came before the committee we could see on their faces, 'Not again. Do we have to tell our story again?' It tears them apart. That is why it's very important that we get some results out of this for them.

I would also like to thank Senator John 'Wacka' Williams. He's been marvellous in working with One Nation on this inquiry with his experience and his knowledge. I'd like to thank Don Bundesen from my office. He's been working with farming families. He has saved five family farms from being taken over by the banks. He is helping another 10 farming families, and he will be meeting another 60 in North Queensland. Another person I'd like to thank is Sean Butler from Senator Georgiou's office. I also thank the farmers who have come here today.