MAY 2, 2014

Topics: Commission of Audit, Bass Strait shipping schemes, Farm Finance, Rural Financial Counselling Service, R&D


JR: The Federal Government's Commission of Audit, which was released yesterday, has some particularly significant recommendations for Tasmania. Let's start with freight, there has been a recommendation to cut the Tasmanian Freight Equalisation Scheme (TFES) which is worth about $130 million per year and is a freight and passenger equalisation scheme. Where do you stand on that?

RC: I think that has been pretty clearly put to bed over the last 24 hours by some of my colleagues already. We went into the election campaign committed to retaining both of those schemes and we're part way through a process where we've had the Productivity Commission do a review of those schemes, committing to retaining them, and that Productivity Commission report is currently with the government. An answer you'll probably get sick of by the end of this interview is that is being considered as part of the budget process.

JR: Cadbury was another election promise and your government promised $16 million to Cadbury in Hobart. The report has recommended that money shouldn't be given on the basis that it will drive local tourism, which is not a federal issue, and that it will make their private entity more valuable rather than putting anything into the general community. Is the government still committed to providing that money?

RC: Yes we are because it was an election commitment. It's important to note that the Commission of Audit is a report to government, not a report of government. It's already been made clear by a number of colleagues that we won't be accepting all of the recommendations of the Commission of Audit report, we've dealt with two of them already this morning and we'll see the rest of in in ten sleeps time.

JR: Another issue that was raised and which is something that potentially has a further reaching impact for the rural community in Tasmania, is that backing up a recent Productivity Commission report, the government should cut back on research and development (R&D) funding Australia-wide. Going into the election the Coalition committed to increase R&D funding by $100 million, are you still committed to that?

RC: Absolutely, I've spent a lot of time working with our R&D corporations during the time that I've been in the parliament and they are a vital part of the improvement in agriculture. We talked at the Outlook conference here in Launceston only this week about an increased demand for food, more than doubling by 2050, and we have to be in a position to be able to meet that. We've had a plateauing off of productivity so in my view we need to have an increased investment in R&D and that's why we made a commitment to put in an additional $100 million over four years in our election promises. Again, we're working through the process of implementing that promise. So that is another circumstance where I disagree with what the Commission of Audit has said and it's not in line with our election commitment.

JR: There have been some recommended changes to policy that has only just been implemented and has been worked on for many years, with both the Labor and the Liberal government. The Farm Finance Concessional Loan Scheme has only just closed applications yet this recommends that it be cut all together. Do you agree that the concessional loan scheme, which offers discounted loans to farmers who are in debt crisis due to drought or other hardship, should not be available anymore?

RC: You're right in saying we've only just started rolling this out and the first round of applications has just closed. There are another few years of this program to run and I have no expectation of that changing. You're right this is something that the previous government put into place, particularly in respect to some issues in Western Australia that were occurring but also now some issues we have in some parts of the country where they're in really desperate circumstances with drought. It's important that the government provides something to assist farmers with the weather risk and that's generally something they do well. But you get into a particular time-cycle where unexpected things happen and we think, and have thought for a long time, that it's appropriate that governments provide assistance when those out of the ordinary circumstances occur and farmers aren't in a situation to be able to deal with them in their ordinary business.

JR: Another issue associated with financial hardship and one that when you think of an event like Agfest that is very heavily dependent on a broad range of farming communities, is the Rural Financial Counselling Service. That's closely linked with the need for debt relief, which you do provide at the moment, and that's been recommended to be axed all together. Do you support that?

RC: We've just put some more money into Queensland for rural financial councillors and I've had the opportunity to work pretty closely with these organisations over the last six or seven years and they do a great job and are trusted very much by the farming community. They become part of the local community and can seek out things that other government agencies can't necessarily seek out.

JR: It's been recommend though that those services could be provided by private institutions and paid for. Just quickly, because we have to wrap it up, what's your take on that?

RC: I'm not sure that's exactly right because you need a willingness of the customer to go and visit those institutions and sometimes farmers aren't happy to go and visit their bank and they're not necessarily happy to go and talk to Centrelink. I've heard some very amusing stories about farmers who will travel four or five hundred kilometres from where they live to visit Centrelink only to see their next-door neighbour there too. So the Rural Financial Counselling Service provides a particular service that is trusted by the community and I think that is important.

020514 Interview with ABC Country Hour - Colbeck - Commission of Audit
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