EXPLANATORY STATEMENT
Issued by Authority of the Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management and the Minister for Finance
Regional Investment Corporation Act 2018
Regional Investment Corporation (Agribusiness Natural Disaster Loans – 2019 North Queensland Flood) Amendment Rule 2019
Legislative Authority
The Regional Investment Corporation Act 2018 (the Act) establishes the Regional Investment Corporation (the Corporation). The Corporation’s functions are set out in section 8 of the Act and include administering programs prescribed by rules.
Paragraph 8(1)(g) of the Act provides that it is a function of the Corporation to administer programs prescribed by the rules. Subsection 8(5) of the Act provides that the rules may prescribe one or more programs to be administered by the Corporation.
The Regional Investment Corporation (Agribusiness Natural Disaster Loans – 2019 North Queensland Flood) Amendment Rule 2019 (the Amendment Rule) is made under section 54 of the Act.
Section 54 of the Act provides that the responsible Ministers may, by legislative instrument, make rules prescribing matters required by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Purpose
The purpose of the Amendment Rule is to amend the settings for loans under the Regional Investment Corporation (Agribusiness Natural Disaster Loans – 2019 North Queensland Flood) Rule 2019 (the Rule) available to eligible farm businesses that have suffered direct damage as a result of the North and Far North Queensland Monsoon floods between 25 January and 14 February 2019.
Eligible loan activities currently include restocking, replanting and refinancing commercial debt of up to 50 per cent (or up to 100 per cent for farm businesses that have lost all or majority of their stock or crops). The Amendment Rule amends these loan activities to add infrastructure replacement/restoration costs and operating expenses associated with flood recovery work as eligible loan activities.
Background
The North and Far North Queensland floods in early 2019 were a catastrophic event that continue to require a significant Government response to assist farmers in the region to recover and rebuild. On 4 April 2019, the Rule was made to allow the Corporation to lend to affected farm businesses to aid their recovery from the floods.
Concessional loan funding from the Government and administered by the Corporation delivers effective, long-term financial relief to affected farm businesses and assists farmers with the flood recovery process.
Impact and Effect
The Amendment Rule will allow the Corporation to lend more flexibly to farm businesses that have suffered direct damage as a result of the North Queensland floods of January and February 2019.
Farmers are now able to use the loans for restoring or replacing infrastructure, such as storage sheds and fences that were damaged or lost as a result of the floods. Farmers are also now able to use the loans as a source of the cash funding they are required to have for the infrastructure component of the North Queensland Restocking, Replanting and On-farm Infrastructure Grants delivered by the Queensland Rural and Industry Development Authority (QRIDA) on behalf of the Commonwealth.
The Amendment Rule provides farmers with more flexibility in using the loans.
In particular, they are now able to use the loans to cover:
- infrastructure replacement and/or restoration costs as a result of the floods;
- operating expenses associated with flood recovery work; and
- co-funding contributions for other Commonwealth flood assistance measures.
Further, farmers are also now able to use the loans for eligible operating expenses that relate to recovering from the flood damage. Examples of operating expenses relating to flood recovery can include bills arising from the loss or illness of livestock, consumables essential to carry on the farm business, and employee salaries or wages for work associated with recovery efforts.
Consultation
The Department of Agriculture consulted with the Department of Finance and the Corporation in drafting the Amendment Rule.
Details / Operation
Details of the Rule are set out in Attachment A.
The Amendment Rule is a legislative instrument for the purposes of the Legislation Act 2003.
The Amendment Rule is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A statement of compatibility is set out in Attachment B.
Attachment A
Details of the Regional Investment Corporation (Agribusiness Natural Disaster Loans-2019 North Queensland Flood) Amendment Rule 2019
Section 1 – Name
This section provides that the name of the instrument is the Regional Investment Corporation (Agribusiness Natural Disaster Loans 2019 North Queensland Flood) Amendment Rule 2019.
Section 2 – Commencement
This section provides for the Amendment Rule to commence on the day after registration.
Section 3 – Authority
This section provides that this instrument is made under section 54 of the Regional Investment Corporation Act 2018.
Section 4 – Schedules
This section specifies that the Regional Investment Corporation (Agribusiness Natural Disaster Loans 2019 North Queensland Flood) Rule 2019 is amended as outlined in Schedule 1 of instrument.
Schedule 1 - Amendments
Item 1 – Item 1 amends Subparagraph 8(1)(c)(iii) to add two additional categories of eligible loan activities, including restoring or replacing on-farm infrastructure lost or damaged as a result of the floods, and operating expenses relating to damage arising out of the floods.
Item 1 also adds a description of an example of operating expenses referred to in subparagraph (c)(iv).
Item 2 - Item 2 amends Subparagraph 9(1)(c)(iii) to reflect the addition of the two categories of eligible loan activities as outlined in subparagraph 8(1)(c)(iii).
Item 3 - Item 3 amends subparagraph 9(1)(d) to provide a description of an example of operating expenses referred to in subparagraph (c)(iv).
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Regional Investment Corporation (Agribusiness Natural Disaster Loans-2019 North Queensland Flood) Amendment Rule 2019
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of this Legislative Instrument is to insert new categories of eligible loan activities to allow the Regional Investment Corporation Act 2018 to provide more flexible loans to farm businesses that have suffered direct damage as a result of the North Queensland floods of January and February 2019.
Human rights implications
This Legislative Instrument engages an applicable right in Article 17 of the International Covenant on Civil and Political Rights, that is, the prohibition on interference with a person’s privacy, family and home, because the original Legislative Instrument amended by this one permits the Regional Investment Corporation (the Corporation) to take loan recovery and foreclosure action.
However, the foreclosure action is not arbitrary; rather, the Corporation may only take foreclosure action on farm business loans for recovery purposes. Further, under subsection 12(3), in developing its policies and procedures in relation to flood loan management activities, the Corporation is expected to have regard to the concessional nature of the flood loans and consider the impact on the farm business of any proposed action in relation to the flood loan. The Corporation must also offer, and undertake when required, farm debt mediation. These provisions ensure the limitation on the prohibition on interference with privacy and the home is reasonable, necessary and proportionate to achieve the legitimate aim of flood loan recovery.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon. David Littleproud MP
Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management
Senator the Hon. Mathias Cormann
Minister for Finance