ABC 774 DRIVE
WEDNESDAY, 25 MAY 2016
SUBJECT/S: Murray Goulburn milk crisis.
RAFAEL EPSTEIN: Farmers aren’t happy in Spring Street outside state parliament speaking to Claire Rollinson our 774 station reporter. The Federal Government has now said that the hundreds of millions of dollars of concessional loans that were on offer to farmers in drought affected areas will now also be available to dairy farmers. Joel Fitzgibbon joins us he is the Shadow Minister for Agriculture, part of Bill Shorten’s Opposition. Joel Fitzgibbon, good afternoon.
JOEL FITZGIBBON: Thanks, good to be with you.
RAFAEL EPSTEIN: Look it’s a good idea isn’t it? I know the loans have problems but extending the criteria to dairy farmers in trouble that can help some can’t it?
JOEL FITZGIBBON: Well it’s not a bad idea and every little bit helps, but you know this package comes 4 weeks after the crisis first emerged. Concessional loans can help some people but standing alone they’re certainly not the solution and this package obviously falls short of dairy farmer expectations.
RAFAEL EPSTEIN: Well what would you do differently?
JOEL FITZGIBBON: Well we need a suite of things. I had a briefing from the Department this afternoon so I could work out exactly what the Government’s spending and what it might cost to do some other things. By the way, Barnaby Joyce keeps spruiking this is a half a billion dollar package, it’s nothing like that, it’s about a $40m package. Barnaby Joyce always includes the total value of the headline figure of the loans, you know if I lend you a hundred dollars I count the hundred dollars but if I’m getting that back with interest of course. So it’s a fairly modest package and everything in the package is ok and we support it But the key thing here is, you know, you can have an argument about long term issues on price but you can’t fix that overnight. Even if you have the solutions. We need to get cash into the bank accounts of farmers so they can pay their bills and keep those banks from the front gate and the concessional loans might help some people who can qualify for them, it might even give them $150 per week, if they can get the loan which will be at least a couple of months off. But we need a succession of things that add to that amount that helps them - you know pay those bills and keep the banks from the door.
RAFAEL EPSTEIN: Sorry, I’m just not clear what you’re saying. Are you talking about some sort of grants that are not a loan to get people through a tough time? Is that what you’re proposing?
JOEL FITZGIBBON: Well I’ve talked about a few things and I can’t be expected to respond today. We need to go and develop our own alternate proposals if we think more can be done. One thing I did announce yesterday - and I asked Barnaby Joyce to join with me - I mean everyone’s looking to the tax payer to help. I’m more interested in looking to the retailers and to Murray Goulburn and Fonterra for the solutions. I mean Murray Goulburn did the wrong thing here and there’s a mechanism in their prospectus which they used to raise capital on the market and that mechanism says in extraordinary circumstances like this, they can change the profit sharing arrangements so that less money goes to the Collins Street investors and more money goes back to the farmers as a higher farm gate price. Now this is a win win for everyone and it puts cash straight into the pockets of the Murray Goulburn farmers. Because Fonterra’s prices are linked to Murray Goulburn’s they go up too and of course, the investors get a win because in the long run Murray Goulburn’s not going to be worth anything and their notes aren’t going to be worth anything if they don’t have any dairy farmers . So we could fix this tomorrow if we just get the Board to make this decision. This would put at least a couple of hundred dollars of cash back in the pockets of the farmers. Now if they get a loan as well that might be another $150-200, if they can now get Farm Household Allowance that’s another few hundred dollars a week so it becomes cumulative. Barnaby Joyce now though said he’s going to fix the problems with Farm Household Allowance-
RAFAEL EPSTEIN: I want to examine your proposed solution in more detail Joel Fitzgibbon, just let me, 1300222774 is the phone number. It is not at all clear to me what the solution is to dairy farmers. Many of you texting about buying non- supermarket branded milk, I’m sure that makes a difference. I’m not sure if that’s going to give the dairy farmers a prospectively fantastic future. 1300222774 is the phone number. What is the solution? I’ve got no idea. Joel Fitzgibbon speaks on these issues for Bill Shorten’s Opposition. Joel Fitzgibbon the element that you say is in the milk buyers prospectus, is there anything the Governments can do to force that to happen? I mean how would that need to be triggered, how would that work? That’s not clear to me.
JOEL FITZGIBBON: Well only embarrass them to be honest Rafael. I mean I’ve been calling for the Board to invoke this mechanism. If Barnaby Joyce was prepared to do the same, I think the pressure on the Murray Goulburn Board, which by the way has shown no contrition throughout this whole debacle-
RAFAEL EPSTEIN: Here you’re essentially asking them to cough up more cash more quickly to the farmers.
JOEL FITZGIBBON: Yeah absolutely. Absolutely. And it’s in their power to do it-
RAFAEL EPSTEIN: Why would they do that if they’re floated and they are a private company, why would they do that?
FITZGIBBON: Well they’re not a private company. They are still a co-operative
FITZGIBBON: They sought the permission - authority - from co-op members to raise money on the market. So these are note holders and will make some money and they’ll promise big returns as were of course the producers themselves and it all collapsed and of course, the investors have taken a bit of a bath too. But the money that they have lost isn’t going to cost them the next meal. They’re not worried about-
EPSTEIN: No I understand that Joel Fitzgibbon I just suppose I don’t understand if Murray Goulburn is going to be clawing back a certain amount of money over the next year or two why would they voluntarily say well actually that’s fine, we will take back less? I don’t know why they would do that-
FITZGIBBON: No no sorry, these note holders – people who have invested money – expect an interest payment on their notes. What I’m saying is don’t pay it, don’t pay it, pay the money to the farmers –
EPSTEIN: That’s a breach of a legal contract isn’t it?
FITZGIBBON: No, not at all. They went in eyes wide open with this investment and the prospectus clearly says that the Board retains the right in extraordinary circumstances to readjust the profit distribution. It is in their legal remit to send that money away from their investors and back to the farmers.
ESPTEIN: Can I ask you Joel Fitzgibbon, we don’t all understand the detail behind this. When you asked Murray Goulburn to do that what did you say?
FITZGIBBON: Well they are just refusing to budge obviously in the same way the Chairman refused to budge when I said he should resign. Someone has to be accountable for what has happened here and we’ve had no apology from Murray Goulburn, no contrition, in fact the Murray Goulburn Chairs said they wouldn’t have done anything different.
ESPTEIN: Joel Fitzgibbon I’ll get to calls in a moment. Can I just ask you a broad election question?
EPSTEIN: Are confident Bill Shorten can actually win the election?
FITZGIBBON: I’m sort of mildly confident. We are the underdogs but we are absolutely in this race and very competitive. With five and a half weeks to go anything is possible. I think if the election was this Saturday we’d possibly win it but in five and a half weeks things can change a lot of good things can come along and a lot of mistakes can be made on both sides five and a half weeks out is trying to predict the winner of the Melbourne Cup five weeks out. There are a lot of variables between now and then but we are certainly very competitive.
EPSTEIN: Ok thank you for your time.