Treasury officials appearing before Senate Estimates have vindicated claims by State and
Territory agriculture ministers last weekend that the Gillard Government is seeking to turn a
profit from its proposed Farm Assistance package, according to Victorian Nationals Senator,
“Treasury officials on Wednesday said it was accurate to say the Government was offering loans
to farmers at 4.5 per cent interest while borrowing the money at just 3 per cent,” Senator
McKenzie: “There is a 1.5 per cent difference; what will that be used for?”
Official: “Um…well it goes into consolidated revenue.”
Senator McKenzie said the Government could not explain or justify the difference between the
two figures, beyond Finance Minister Penny Wong saying it was ‘a government decision’.
“The difference certainly appears to be greater than could be justified by a reasonable risk
premium, particularly when the Federal Government is not assuming responsibility for
administering the loans,” Senator McKenzie said.
“The bottom line is that the Federal Government is making money on the loans while expecting
the States to wear the entire cost of managing them.
“First Labor announced this money spinner without consulting the States; then it demanded
they fund 100 per cent of the admin costs; and now blames them for not signing up to the
“This is typical of the cavalier way the current Federal Government bullies the states and it is no
wonder they have banded together to demand the Government negotiate a fairer package for
“The idea of a concessional loans scheme for farmers is a good one as many primary producers
are in dire straits through no fault of their own, but Canberra needs to match the goodwill
shown by the State and Territory Governments to ensure the funds flow ASAP,” Senator
Media contact: Kathleen Tonini 0400530027