HE promised a rural debt roundtable in Canberra in late September would not become a bank bashing exercise, but Barnaby Joyce's political rhetoric since then has escalated dramatically.
Before, during and after the recent public meeting at Winton, Queensland, which ventilated issues over an expanding rural debt crisis, Agriculture Minister Barnaby Joyce has sought to publicly pressure the big four banks into managing farm debt more diligently.
His threatening tone also increased as political competition ramped up, with independent Queensland MP Bob Katter moving to “name and shame” any banks that foreclose on farmers facing debt issues.
But as the Australia and New Zealand (ANZ) Banking Group announced a 12-month moratorium on foreclosures last week, Mr Katter said he would start to “name and fame the good guys” rather than publicly embarrass banks for continued foreclosures.
“Every time you do sell up a farmer, we’ll name you,” Mr Katter said.
“To sell a property at the end of the dry season, before the wet season and before the Chinese and Indonesian markets kick in next year, it is a bastard act.
“From now on it’s name and shame and also name and fame.”
Watching the banks
This week, Mr Joyce told Fairfax Media the ANZ announcement, along with moves by other banks to improve foreclosure measures after the Winton meeting, worked “hand in glove” with the government’s other drought support programs.
He said the Coalition had implemented new policies allowing 4400 people to receive the Farm Household Allowance, and 430 people to receive concessional loans.
The government also recently announced an additional $100 million in concessional loans, at an interest rate of 3.21 per cent over 10-year terms, to support farmers in NSW and Queensland facing one in 50-year and one in 100-year drought events, he said.
“Now, ANZ called the moratorium, CBA (Commonwealth Bank of Australia) said openly they don’t intend to kick anybody off their place because of the drought and the other two banks are also very much on notice as to how people are treated,” he said.
“I’ll watch that space particularly closely.
“There is more we can do if we need to.
“I don’t particularly want to.
“I want the banks to manage it themselves and the signs I’ve been getting from them is that’s precisely what they’re going to do,” he said.
“But everybody knows the long-term future of agriculture is strong and therefore removing someone purely because of the drought would be a bad move.”
Evolution of a solution
It’s understood the banks are privately frustrated that the recent political rhetoric has downplayed improved interactions with farmers in recent years, around management of stressed assets.
At the September roundtable in Canberra, Australian Bankers Association (ABA) CEO Steven Munchenberg said different views existed about the actual level of rural debt and what that debt means, while reporting the current level is at $61 billion.
The meeting also resolved to restart the national rural debt mediation process that had been in place until last year but “fallen off the radar”.
“Different States have different processes that handle the mediation of debt and some of them are working better than others,” Queensland LNP Senator Matt Canavan said.
“It seems right and proper while we have this debt issue that we try to harmonise those and come up with the best model across the country.”
The roundtable occurred after Queensland graziers Barry Hughes and Rob Atkinson raised concerns about their industry’s future, with 70pc of the State drought declared, and demanded a change of conversation between industry, banks and government officials.
A survey by the Gulf Cattlemen’s Association - which was also instrumental in making the Winton meeting a reality - showed a 28pc decline in property values had occurred since the live export ban in June 2011, coupled with a 22pc debt increase.
Mr Joyce acknowledged a combination of forces had contributed to the banks changing their position on foreclosures, not just the Winton meeting and his veiled threats.
“All things make up pressure,” he said.
Mr Joyce said Prime Minister Tony Abbott and Treasurer Joe Hockey were also concerned about the various issues at play.
He said the government was serious about the debt issue and “we’re not going to sit idly by just let whole swags of people get kicked off their farms”.
“That’s unacceptable and we’ve made that point abundantly clear,” he said.
“Obviously the Winton meeting brought the nation’s attention to this issue but I’ve also been working in the drought space consistently, since becoming the Minister.
“I’ve had three iterations of drought packages in one-and-a-half years.
“People will always complain that it’s not enough and I understand that.
“There’s always more you can do but you do the very best with what you can, noting there was no drought policy when I arrived,” he said.
“Apparently, in the previous government, we’d had a miracle and all the droughts were over so I’ve had to create a drought policy, from the ground up.”
The roundtable chaired by Mr Joyce also committed to getting updated and accurate data on rural debt.
The subsequent ABA report showed that the number of farm properties in northern Queensland that are 90 days in arrears for payments on bank loans increased from 1.9pc in 2012 to 3.4pc in June 2014 – above the nationwide average of 3pc.Author: COLIN BETTLESSource: Queensland Country Life