Live Export

Slow uptake undermining push for more live export support

James Nason, 22/08/2011

The slow uptake of Government assistance by businesses hit hard by the live export ban is fuelling perceptions in Canberra that financial impacts are not as bad as previously claimed, rural leaders say.

Northern cattle industry businesses have reported losses ranging from hundreds of thousands to millions of dollars as a result of the ban, and industry leaders have estimated that losses for the sector will total more than $200 million.

A Government-funded report released last week also found that many producers would “suffer severe financial pressure” as a result of the suspension.

On June 30 the Federal Government announced $30 million in cash support to businesses affected by the ban, in the form of $25,000 in cash grants per enterprise.

However, almost two months later, just $3.5 million has been taken up. That represents less than 12 percent of the available funding.

Various reasons have been offered to explain the slow uptake, including a lack of information about how to access the funding, and computer system breakdowns and long phone delays reported by those who have tried to access it.

Some have also pointed to a cultural reluctance among producers to be seen accepting Government assistance, despite the heavy losses many have incurred as a result of the ban.

Others said the $25,000 available per business as so small compared to actual losses that it was seen as an insult.

“When it first came out it had a real dampener effect on people’s mental outlook,” NTCA executive director Luke Bowen said. “They thought, these people don’t know what we’re up against, and it made them feel more depressed than they already were.”

Mr Bowen said there were signs that the lack of uptake was undermining the industry’s attempts to explain to Canberra that greater support was needed.

The NTCA had lobbied Federal Ministers to make more assistance available, and had urged against “support” that pushed already-stretched businesses into further debt.

Two weeks ago the Federal Government announced an expanded assistance package comprising $8m in interest rate subsidies to encourage affected businesses to take out new commercial loans of up to $300,000 to cover the losses they have sustained.

“We really feel as though they have made the wrong call,” Mr Bowen said.

“Based on discussions I have heard out of Cabinet, they have based that (package) on the fact the uptake of the $30 million wasn’t particularly good.”

AgForce Cattle president Grant Maudsley agreed that the lack of uptake was weakening industry calls for greater support.

“It is very hard to make a case that we need more dollars when we’re not using what we’ve got,” he said.

The Government’s approach of encouraging producers to go into further debt to cover their losses was “a big ask” in the current environment of global economic uncertainty, Mr Maudsley said.

Mr Bowen said the level of uptake had risen in recent weeks thanks to the work of a Rural Financial Counsellor who was helping businesses and individuals to apply for funding.

He said there were also signs that banks were starting to grant overdraft extensions where producers were able to secure live export contracts.

“I was talking to a person two days ago who said the bank has just given them an extension to their overdraft of $600,000,” he said.

“They were up to their limit, the bank had taken over their cheque book, they weren’t paying the bills for them, and wouldn’t let them pay the bills and they had debt collectors chasing them, and the bank wouldn’t extend their overdraft until they got a contract for cattle.”

  • The Rural Financial Counselling Service, a free service that can provide financial advice and assistance applying for available funding, can be contacted by calling 1800 1800 836 211.

RELATED STORY: Ludwig urges northern businesses to access support

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