A LEADING rural accountant has called upon the banking sector to provide the data required to complete the overdue QRAA rural debt survey.
Held bi-annually since 1994, the latest rural debt survey was due to be released in 2013 but was abandoned when the major banks failed to co-operate.
Speaking at the AgForce 360 Series in Roma last week, Bentley’s Brisbane managing director, Ben Cameron, said it was time for the banks to get behind the survey to ensure it continued.
“Everyone needs to realise it is an issue and if we keep telling the politicians that it is fine then we are pushing the issue under the carpet all the time,” he said.
“As mature stakeholders in the industry I think we need to recognise the issue and all sit around the table and work out what we need to do.”
The most recent QRAA rural debt survey released in 2011 found that total debt for the Australian farm sector had increased 17.2pc to $9.1billion.
The survey also found the number of Queensland beef industry borrowers considered non-viable was up alarmingly from less than 1pc in 2009 to almost 7pc.
Mr Cameron doubts rural debt levels have dropped since 2011 but said it was impossible to be definitive on the issue without solid data.
“No one wants to talk to each other about debt,” he said.
“Rural people keep their business to themselves but if you have some data to talk about then it holds everyone focused.
“No one is looking for handouts but we do need to adjust the framework in order to facilitate an orderly exit from the industry for those who need it and an orderly system for those to refinance who need it.
“At the moment no one can refinance because we have four big banks with the same criteria so if you are having problems with one bank then you probably won’t get a better result with another.”
Mr Cameron doesn’t believe establishing the widely proposed rural reconstruction bank or providing access to more low interest loans will solve Queensland’s rural debt issue.
“When you really look into it how many people are actually accessing those loans and benefiting from them?” he said.
“And if they do access the loans are they still on them 10 years later?
“Those are the sort of studies that need to be done.
“I think there are some things that we could do along the lines of taxation where people can trade their own losses in.
“Those things aren’t hard to change.”
Mr Cameron said he would be “far more concerned” about rural debt levels without the positive market signals currently coming out of Asia.
“Mostly all we need is time to adjust, acknowledge there is an issue and be innovative,” he said.
Meanwhile Queensland Nationals Senator Barry O’Sullivan believes a full Federal Senate inquiry into rural debt structures and agribusiness banking lending practices across Australia may be necessary if the banking sector continued to refuse to participate in the proposed rural debt surveys.
“It is in the best interests of the banks to assist in the attempts by State Governments to undertake these rural debt surveys,” Senator O’Sullivan said.
“This should serve as a warning to the banks because, ultimately, the final recommendations from any Federal Senate inquiry may not be beneficial to the banking sector.
“Such an inquiry might produce consequences for rural lenders that do not benefit their businesses.”
But co-operation from the Australian Bankers Association (ABA) looks unlikely at this stage.
In response to questions from Queensland Country Life this week, ABA CEO, Steven Munchenberg, said a number of banks had raised questions about the effectiveness of the QRAA rural debt survey and the “considerable investment” required to contribute the data.
“The banks also have reservations that the survey does not have broad-based coverage, there are some inconsistencies in data reporting and also in aggregation of data, there are other data integrity issues and the data are dated by the time it is released,” he said.
“All of which limits its usefulness.”
Mr Munchenberg said the banks felt there were other sources of similar information that were more timely and reliable and “higher quality”.
“We are also discussing with agriculture representatives how we can improve the quality and timeliness of information that is available,” he said.
“The banking industry believes that high quality information is essential for good policy formulation and is committed to ensuring this information is developed and available.”
Senator O’Sullivan said the Government’s ability to deliver effective public policy was being hampered by the stance of the ABA.
“…banks are refusing to assist government collect the necessary data to gain an accurate picture of the current debt loads across the agriculture sector, especially in Northern and Western Queensland, where farmers are dying a death by 1000 cuts,” he said.
“The banks could do themselves a massive favour by acting as responsible corporate citizens and agreeing to support the rural debt survey process.”