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Wednesday, 18 October 2017
Page: 7808

Senator CAROL BROWN (Tasmania) (09:34): Yesterday, Minister, you stated that you were not aware of any discussions the minister or his department is having about outsourcing functions of the RIC. At the public hearing of the Select Committee on Regional Development and Decentralisation in Bendigo on 9 October 2017, Ms Gartmann, the managing director and CEO of the Bendigo Rural Bank, gave evidence in response to the following questions:

… can you let us know if there's been any consultation with rural finance about the Regional Investment Corporation? Has anyone reached out to you about what's worked and what hasn't worked? Going forward, are you concerned at all about this federal organisation coming in and taking core business?

Ms Gartmann replied:

There certainly has been a large amount and a continuing number of engagements between the Commonwealth agencies and Rural Finance Corporation/Bendigo Bank representatives to discuss what is currently being executed in Victoria in partnership with the Victorian government and to explore areas to strengthen and improve the delivery of the government concessional lending and drought-and-disaster support. That continues to take place. Certainly we're always open to supporting a national approach and collaborating and partnering in whatever model is finalised going forward as of July next year.

As was outlined by Marnie, the balancing act is having some efficiency by coordination from a central, national point as opposed to the current delivery by the states and territories. It is the efficiency gained by having one system as opposed to multiple and balancing that out with an entity that is then further removed from the customer base that it is there to support and serve by having a national entity as opposed to those based in states and across the regions. That balance is yet to be worked out. We've still got a number of months to go before that is supposed to be up and running on 1 July, and we will certainly continue to share the experiences of Rural Finance Corporation with the relevant individuals and agencies to try to create a model that will serve and support all the farmers.

Ms Gartmann went on to say:

The offset accounts. They have traditionally not been available to agricultural businesses. But it is a common practice in residential lending. Legislative changes last year at a federal level were passed and that allowed the farm management deposit offset account to be created, which allows farmers to offset funds held in a farm management deposit account against eligible variable rate term lending, thereby reducing their farm lending costs. Rural Bank is the only bank in market offering that at the moment. But those sorts of legislative changes can demonstrate that it leads to positive business and funding changes for an industry, when done and supported by the private sector.

During a break, Ms Gartmann said that Bendigo Bank/Rural Finance was hoping to be able to tender for RIC work, which would be a front, but Bendigo Bank would continue to do the work. Ms Gartmann said they were in discussions with the department about a tender process.

Now that we know there have been discussions about outsourcing functions of the RIC, can the minister provide detail to the Senate about any other discussions? Is the minister aware that the department is having discussions with agencies that are currently delivering concessional loans? Has any work been undertaken regarding the cost these possible arrangements may incur? Will the RIC be regulated in a similar fashion to other financial banking institutions with regard to receivers, evaluators, lenders and who can provide advice to farm businesses seeking a loan?