12 February 2019
76 recommendations were released last week in the Royal Commission’s Final Report into Misconduct in the Banking, Superannuation and Financial Services Industry, all of which the Federal government and Labor have said they will support and implement.
A summary of the key findings we considered to be most relevant to Boyce clients are as follows:
Farmers and Small Business
The commissioner looked to provide stricter and clearer rules to better protect farmers in times of financial distress such as drought, key recommendations as follows:
- The establishment of a national farm mediation debt scheme where banks ensure mediation occurs soon after a loan is distressed, not as a final measure
- The appointment of administrators or receivers is a remedy of last resort and banks to cease charging default interest where no realistic prospect of recovery
- Banks to ensure agricultural land valuations are independent and that valuations should consider likelihood of external events such as drought and floods and time it may take to sell the land
- Distressed loans to be managed by experienced agricultural bankers to reach an outcome best for the customer and the bank
- No default interest on loans secured by farm land in drought declared areas or other natural disaster
- Lending to small business was largely unchanged as there were concerns that any further regulation may tighten lending for small business. There was a recommendation to expand the definition of small business under the Banking Code to be any business employing fewer than 100 people and turnover up to $5m
10 January 2019
The Federal and State governments are working together to deliver $12 million in rebates for drought-affected livestock farmers to buy and upgrade on-farm water infrastructure. Farmers in NSW will be able to apply for the rebate from 14 January 2019.
Through this scheme, drought-affected livestock farmers in NSW can claim up to 25 per cent on new farm water infrastructure costs up to a maximum of $25,000. Farmers in NSW can apply for the rebate via the NSW Rural Assistance Authority website at www.raa.nsw.gov.au or call 1800 678 593. We understand that the relevant information on the RAA website will be available next Monday. The rebates will cover eligible work undertaken since 1 July 2018. The expenses must occur in the same financial year as your claim.
Based on information provided by the Department of Agriculture and Water Resources, in order to apply you must be a primary producer, a property owner, share farmer or lease holder, in an area defined as drought affected and in the grazing industry.
The rebate scheme can be applied to new purchases and installation of pipes, water storages and water pumps, de-silting dams, and associated power supplies such as generators. New infrastructure must be for grazing livestock that you own (not agisted), be for an animal welfare need and improve your drought resilience. For more information, click here.
We encourage you to contact the RAA or access their website for further information or speak to your Boyce accountant.