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Thursday, 27 April 1972
Page: 2063

Mr CORBETT (MARANOA, QUEENSLAND) - Does the Minister for Primary Industry agree that many primary producers have kept themselves outside the scope of the rural reconstruction provision only by working properties under great difficulty and that many of them are now seriously short of finance with which effectively to operate their rural holding? In view of the need for the provision of more rural finance, will the Government give urgent consideration to the provision of long term loans through a Commonwealth bank - either a rechartered development bank or a new rural bank - to enable them to utilise their properties fully and thereby recover a degree of prosperity to their own benefit and to the benefit of country towns and decentralisation generally?

Mr SINCLAIR (NEW ENGLAND, NEW SOUTH WALES) (Minister for Primary Industry) - It is true that many primary producers face real difficulties because of escalating costs. One of the significant areas of costs has arisen from the increased borrowings by primary producers which, since 1951, have increased at the rate of about 1\ per cent per annum. This has been part and parcel of the capital intensive nature of operating most agricultural holdings, and of course this is also true of almost every other sector of primary industry. As regards the problems associated with providing adequate long term finance, I think it is also necessary that honourable members should recognise the existing agencies that have been created and some of the problems that exist in relation to borrowings from them. Honourable members will be aware of the term loan fund, the farm development loan fund, the Commonwealth Development Bank and the rural reconstruction scheme. The maximum term of loans from the first three I have named is 15 years. For debt adjustment purposes it is 20 years and for farm build-up it is now up to 30 years. Yet with each one of these agencies, while the facility for relatively long term loans has been available, the lending authorities themselves have, in conjunction with borrowers, generally made funds available for a substantially shorter period than the maximum term.

If any new facility is to be considered it is necessary to ensure, as far as possible, that producers can borrow funds for the maximum period or for a period approximating it. It is of concern that where existing sources are available so many loans are for a much shorter term. I agree that this is an area which is of significance to primary producers. For that reason I have commissioned the Bureau of Agricultural

Economics to look at the whole range of availability of rural finance to see whether or not there is a shortfall. It there is a shortfall, the Government can consider whether some extension of existing facilities is necessary and, if so, of what character it should be.

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