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Graziers concerned over drought plan

Saturday, 9th November, 2019

Matthew Jackson, President of the Pastoralists’ Association of West Darling. PICTURE: Myles Burt Matthew Jackson, President of the Pastoralists’ Association of West Darling. PICTURE: Myles Burt

By Callum Marshall

The President of the Pastoralists’ Association of West Darling (PAWD) has expressed concern about the federal government’s interest-free loans for graziers, as well as the state government’s sacking of the NSW Drought Coordinator.

A program allowing small agricultural businesses to apply for loans of up to $500,000 to pay staff, buy equipment and refinance was announced on Wednesday. 

But speaking to the BDT yesterday, Mr Jackson said there were a lot of questions about the way the loans were structured and what the overall impact would be for graziers.

“I commend them for making a move in attempting to help people on the land with either loans or other financial assistance,” he said.

“I’m just not entirely sure about these interest-free loans, depending on individual situations, whether that’s just going to increase their debt levels and make that more difficult to pay back down the track.

“It all sounds rosy, interest-free for a couple of years, interest-only for another couple and then repay the principal within five years after that period.

“It depends how they use it.”

Mr Jackson said he was worried about how the loans would play out in the long term and whether graziers would have to go back to the banks once the government loans ran out. 

“I don’t know whether you’re able to use it to offset loans you already have, to reduce your loans at one of the banks or any other institution,” he said.

“Or whether they’re using it just to get by between now and when it rains and then start getting the income.

“(But) to go along to (the banks) and say, ‘I’m getting interest-free loans from the government for a couple of years, I’d like to reduce my debt by paying some of it out with the government loan’ and then five years down the track...come back and buy that money again, they mightn’t like that so much.

“I’m not saying it’s detrimental to loyalty because sometimes I don’t know if there’s a lot of loyalty in banks anymore, but at the end of the day you just need to weigh your options in case that does become a problem down the track.

“I’d like to research it a lot more so I can find out a bit more about it, how it’s going to work, the implications or the benefits.”

Another issue, said Mr Jackson, was the difficulty associated with the loans.

“I believe you have to prove that you’re going to be profitable in the next two years after it rains,” he said. “So it’s not open to everyone.

“It definitely won’t be because some people might not be in that position to be profitable in the next few years after rain.

“No one really knows where this drought is leading to. There’s no sign of it ending. 

“It’s a bit like ‘how long’s a piece of string?’

“But we’re happy to see anything come from the government in terms of assisting people on the land to get through this drought and become sustainable and more resilient down the track leading into next drought.”

Complicating drought matters though is the sacking of the state’s Drought Coordinator, Jock Laurie, this week.

Mr Jackson said it had come as a shock to PAWD and pretty much everyone in NSW affected by drought.

“Being the Drought Coordinator and also the Commissioner for Land and Water, he had a lot of input, a lot of knowledge with water,” he said.

“His feet were on the ground. He was in the area and he knew what was going on.

“He was an important conduit, feeding information from people on the land back to government departments.

“He’d only been doing it for a short while but he made inroads and he was getting a lot of information in the community.”

The state government’s announcement of an Office of Drought Response to replace the Drought Coordinator brought with it a lot of questions as well, said Mr Jackson.

“They say they’re going to replace it but who will be managing that and how much of an idea do they have of the issues people face on the land?

“Are they going to be city folk who’ve never really had much to do with agriculture, just put into a position to manage whatever department they’re going to put up there?

“My concern is how in touch they’ll be with people on the ground now that we’ve lost that link. Jock was an important link.”

Mr Jackson said several graziers had praised the work of Mr Laurie.

“A few graziers that I’ve spoken to have been very positive and supportive of his position that’s now been made redundant.

“Since this has happened I haven’t had the opportunity to speak to anyone or I haven’t heard from anyone yet.

“It’s obviously still filtering through and sinking in but no doubt down the track we’ll hear a bit more.”

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