I rise to support the Regional Investment Corporation Bill 2017. The introduction of this bill into parliament is another significant step towards seeing the $4 billion Regional Investment Corporation open for business by July 2018. Before I talk about the Regional Investment Corporation, I want to make a couple of comments about the contribution by the member for Bendigo. When I listened to that speech, I thought it was a long and meandering contribution. On the one hand, she seemed to be saying that the Regional Investment Corporation was a bad thing and that it shouldn't be supported. On the other hand, she was saying that it should have come to Bendigo. Well, member for Bendigo, I've got some advice for you. I'm trying to get the member some jobs in her own seat through the Murray-Darling medical school. If she is serious about building employment in her region, she should get up, put her shoulder to the wheel and do a bit of fighting and lobbying for projects like the Murray-Darling medical school, instead of coming into this place and giving long and meandering incongruous contributions, like that which she gave this afternoon.
The Regional Investment Corporation is one of the key election commitments of the Liberals and Nationals. It will improve the delivery of funds to farmers and ensure greater national consistency in farm business loan assessments. It will determine guidelines, policies and procedures needed for the delivery of farm business and water infrastructure loans. It will assess farm business loan applications. It will make decisions on farm business loan approvals, and it will work with states and territories and other parties on water infrastructure proposals. It will also provide expert evidence to the government on water infrastructure proposals. It will enter into agreements, on behalf of the Commonwealth, with states and territories for those water infrastructure loans and it will administer approved farm business and water infrastructure loans. It will provide advice to the government on the needs of the agricultural sector and opportunities to improve its programs.
While it's not a bank in a formal sense, the RIC's delivery of loans makes it a significant financial institution. It won't mean the Australian government becomes a lender of last resort. It is expected that the eligibility criteria will require applicants to be viable businesses, with the support of their existing commercial lenders. It will be administering $2 billion in concessional loans, which are designed to encourage growth, investment and resilience in our rural and regional communities. To date, more than $725 million in farm business concessional loans has been approved to over 1,340 farm businesses, with over 1,100 farm businesses approved for drought-related or farm finance concessional loans.
As we've heard in this House today, currently the Australian government's farm business and concessional loans are delivered through the states and territories. But we're committed to $350 million in farm business concessional loans per year for 10 years in the agricultural competitiveness white paper. It's fair to say that, in the past, the delivery of these loans has proved very challenging, which is why we need the RIC, because we've had protracted negotiations with the states on loan guidelines and administration funding, and they've led to delays in making loans available to farmers experiencing drought and hardship. The different state assessment processes have also resulted in a lack of national consistency in the delivery of these loans, and some states have even refused to make some loan products available, denying farmers access to the same facilities that are available to farmers in other states. That's just not right. We need to be getting help to farmers when it's needed and we need to get them that help quickly. It needs to be done as efficiently as possible, and that's what the RIC will do.
Additionally, the RIC will deliver the $2 billion National Water Infrastructure Loan Facility, providing concessional loans to the states and territories to fast-track priority water infrastructure projects. These loans will provide an incentive to states and territories to get these projects cracking. Water security is vitally important to our country communities, and a lack of water security is one of the biggest impediments to growth in regional Australia. I'm speaking here of economic growth, population growth, and the development of these communities generally. Indeed, in 2010 Orange itself almost ran out of water. Water security is very close to the hearts of country people, and this facility can make a big difference to country communities. There wouldn't be a country community anywhere in Australia that wouldn't support this facility and this initiative.
Now, the introduction of this legislation of course follows the announcement by the Deputy Prime Minister on 16 May that central western New South Wales will host the Regional Investment Corporation. I have to say that that announcement was warmly welcomed by the communities of the west. We need all the help we can get out there. I heard the member for Hunter say in this House last night how well Orange is going economically. The inference was that the Regional Investment Corporation isn't really needed there, because Orange is going okay and it can take care of itself. When I heard those words, it sounded to me like an excuse for inaction. It was very disturbing.
Let me tell you what's happened economically in our area in recent times. Orange is resilient, but it's taken its knocks and so has the whole area. Electrolux was once one of the largest employers in our area. It was Australia's last fridge-making plant. The factory had been operating in Orange since the Second World War, and it was making a healthy profit. It was making millions of dollars in profit every year for its owners, and that was thanks to the great work of its managers and its wonderful local workforce. But in a boardroom in Sweden, the management of Electrolux decided that, despite the Orange operation being profitable, more money could be made in Thailand, where the workers are paid $2.50 an hour. In the blink of an eye, 550 jobs were gone. We not only lost those jobs, but we lost another 100 to 200 contractors as well. Up to 750 jobs were lost in one hit. Tens of millions of dollars in wages alone was ripped out of the local economy—that's tens of millions of dollars gone every year. The knock-on effect from the closure has been keenly felt. There are still ex-Electrolux employees looking for work. There have been a number of major closures around Australia in recent years, including those relating to the car industry and the power industry. But if you look at the job losses on a per capita basis in Orange, there would be few areas that have copped a bigger hit in recent times. On top of the Electrolux hit, we've had other losses, such as the rail engineering firm Downer EDI pulling out of Bathurst—with the loss of 100 jobs—and the downturn in mining, and there have been others.
The RIC will initially mean 25 to 30 jobs, but, in country communities, those jobs matter. Given the economies of Bathurst and Orange are now so closely connected, with hundreds of people commuting between the two cities every day, there is no doubt that folks from Bathurst, Blayney and Cabonne will certainly get a chance to apply for, and indeed bag, one of those jobs. The Labor Party should be supporting jobs in Orange. The member for Hunter can be sure that at the upcoming local government elections, the state election in 2019 and the next federal election, I'll be reminding the communities in our area which party turned its back on these communities and these jobs.
Following the 2017 budget, Labor announced it would not be supporting the RIC and would be pocketing the $28.5 million in RIC establishment costs as budget savings. But, over the past four years, the Commonwealth has paid $37.65 million to the states and Northern Territory governments to administer the concessional loans. Labor states such as Victoria and Western Australia want to be paid even more to deliver these loans by up to five or eight per cent, which would cost the Commonwealth between $59 million to $89 million over four years. So the RIC will save the Commonwealth government money. It's a good deal for taxpayers. It's also revenue neutral. The interest rates it will charge are intended to be set at a level that covers the cost to the government of raising the capital for the loans and also the corporation's operating costs. I note that Labor has falsely claimed that the farmers are choosing not to take these loans up, but the reality is that 1,342 farm businesses have been approved for $724.4 million. So the RIC will stimulate growth and development in country communities, and that's precisely what the Australian government should be doing. I note that the recruitment for the RIC board positions and chair has already started, which is very positive news.
This announcement has had widespread support from Regional Development Australia. The RDA vice-chair, Reg Kidd, said that the announcement:
… represented a huge boost for the region and was recognition that Central West NSW was one of the most suitable and attractive regions in the country for investment and the location of government agencies.
… … …
It not only benefits our regional communities, but it provides the government with much stronger regional partnerships and taps in to the expertise we already have here.
I think that that was very well said by Mr Kidd and Regional Development Australia.
The National Farmers Federation has welcomed the announcement. President Fiona Simson has stated:
It just make sense for an agency charged with administering concessional loans to farmers to be based in the regions where farm businesses operate.
What she says is true. She knows country Australia. She's from the New England area herself on the Liverpool Plains.
Orange is an important agricultural hub in our region, and the Orange branch of NSW Farmers has also been very supportive. Bruce Reynolds, Peter West, Fiona Hall, Sim Gaeta and Annette Brown have all been very positive about this. One of the reasons that Orange has been chosen is its proven track record in agricultural and rural financing. It's renowned for its rural-financing sector, with the New South Wales Rural Assistance Authority; the New South Wales Department of Primary Industries; Macquarie bank's rural investment arm, Paraway Pastoral Co.; and NAB's rural-banking arm all based in the area. In 2015, Paraway Pastoral Co.'s head office was decentralised as well from Sydney to Orange. It's a huge operation in terms of its large-scale sheep and cattle enterprises across Australia, and it has become one of the largest pastoral landowners in the country with over 4.4 million hectares.
So we have this track record, and we have the expertise out here. The member for Hunter said in his offering last night that it's because of political threats that it's coming to Orange. Cast your mind back to the last federal election, Member for Hunter, where we were fortunate enough to win every booth in Orange, including those booths that the Labor Party used to call their own. They are some of the most disadvantaged communities in Australia, and they don't vote for the Labor Party anymore. The reason they don't vote for the Labor Party any more is that the Labor Party have forsaken them. The Labor Party don't represent country people anymore, don't represent people of disadvantage in the regions and don't speak for them.
Mr Champion: What nonsense!
Mr GEE: You don't. You turn your backs on them, you ignore them and you take them for granted. That's not the way we operate in country Australia. As I've indicated, the people in Orange will remember who has supported them and who is not supporting them.
This is just part of the wider decentralisation strategy of the Australian government, and we need to support it. And when the opponents of decentralisation in the Labor Party stand up and say that we shouldn't be doing it, that we shouldn't be moving jobs out of capital cities, to people in the country, they're talking a totally different language. It just epitomises the great divide between the cities and the bush, the way the Labor Party talks about decentralisation. I just don't understand it. People in country New South Wales and country Australia understand the value and importance of decentralisation, but every time you say you want to decentralise a government department those on the opposition benches scream blue murder and say the sky is going to fall.
The member for Hunter should take note of a number of those councils in Labor controlled seats that made submissions to the recent Senate inquiry supporting decentralisation. People support it, and they want it, and they want their elected representatives to go in and fight for it. By not supporting decentralisation the member for Hunter is failing to back the country communities he claims to represent. Those on the opposition benches who continually oppose decentralisation are selling regional communities out; you really are. That's why you're losing touch. It's because of the influence of the city interests, which have basically taken hold of the opposition benches, which is very disappointing. There was a time that, when they had these seats, they used to stand up and fight for them, and they'd back them. But they don't anymore.
The Liberals and Nationals have a very strong record of standing up and fighting for people in the country. We've got the backpacker tax sorted; we've got the wine equalisation tax sorted; the instant asset write-off has been sorted; Gonski funding has been sorted, with country schools being the biggest winners; and country-of-origin labelling laws—the list goes on and on. And this latest decentralisation initiative is part of a wider Australian government policy of decentralising departments to country areas and letting all Australians share in the wealth of this nation, which is what we should be doing, and I commend this bill to the House. I also commend it to other members and hope that they will support it. (Time expired)