AN audit of the federal government’s low interest rate loan scheme has revealed drought stricken SA farmers are the big losers, with less than 1 per cent of applicants successful.
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Even more alarming is the cost the state government has charged the federal government to administer the loans in SA – a massive $416,666 per successful application.
The Australian National Audit Office report released last week shows SA farmers have received just $3.7 million from the $60m made available under the federal government’s Farm Finance and Drought Concessional Loan schemes.
Just six SA farmers were among the 730 successful loan applications for the federal government support, administered through the state governments.
Three applications were successful in the Farm Finance Loan Scheme from 51 applications with $1.6m in loans provided.
In the Drought Concessional Loan Scheme, three of 14 applicants were successful and loaned $2.09m.
This is despite many Upper South East farmers battling their lowest three years of rainfall on record.
Opposition agriculture spokesperson David Ridgway said it was “not good enough” and called on the state government to do more.
But SA Agriculture Minister Bignell said he had written to Federal Agriculture Minister Barnaby Joyce seeking his support to establish a working group to look at changes to the scheme’s eligibility criteria and framework, to ensure it provides the necessary support.
This proposal would include representatives from state goverment departments and Primary Producers SA chairman Rob Kerin.
Mr Ridgway said Mr Bignell needed to explain why SA’s uptake was the “worst in the nation”.
“In terms of total funding, SA farmers received less than 1pc of the total amount of funding approved nationally,” he said.
“Minister Bignell owes our farmers an explanation as to why the SA government seems to be dragging its heels in administering these programs.”
Mr Bignell said the report vindicated SA’s concern about overarching flaws in the Drought Concessional Loans Scheme. He remains committed to working with the federal government to roll out the scheme.
He said a NSW loan scheme administrator had reviewed a sample of applications declined in SA to see if SA’s administration was different to other states. It was determined those applications would not have been approved in NSW either.
“This reaffirms the need to have the scheme reviewed to ensure application numbers and approval rates improve,” he said.
Federal Member for Barker Tony Pasin said the report showed the former Labor government’s assistance programs were “ill conceived” and “ill delivered”.
It also confirms his long-held belief the SA government has administered the guidelines differently to other jurisdictions.
“It has been a painful experience for many SA farmers to undertake the lengthy process and most likely be refused, but hopefully the report will lead to either a Turnbull-led Liberal government or Shorten-led Labor government designing better drought programs,” he said.
“The six SA farmers who have benefited from the two programs are not even a drop of water in the River Murray. What we need is to make the money more widely-available and have a scheme to respond more quickly.”
Mr Pasin said SE farmers would be “horrified” by the state government’s high administration costs, equating to more than 2.5 times the rate relief.
“Based on a conservative estimate of a 5pc discount in interest rates, the successful SA farmers would receive a total of $184,650 a year in interest rate relief so $923,250 in total for the five-year loan compared to $2.5m in administration costs,” he said.
