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Review backs Rural Financial Counselling Service, but suggests some cost-cutting

Beef Central, 11/11/2014

A review has recommended improvements to the Rural Financial Counselling Service (RFCS) and a cut in overall funding to improve its efficiency, but has strongly supported its continuation.

After consulting broadly with a wide range of agriculture industry stakeholders from May to July, the National Rural Advisory Council this week released the report from its review of the RFCS.

NRAC found the RFCS program was providing quality outcomes for primary producers, fishers and small rural businesses that are suffering financial hardship.

“In general, NRAC found the RFCS to be a well-respected service that was delivered by devoted, hardworking rural financial counsellors,” the report states.

“Based on the evidence available, the RFCS is providing quality outcomes for both clients and rural communities.”

NRAC said the specific types of assistance provided by the RFCS—such as crisis assistance, business improvement services, referrals to other professionals, debt mediation and pre-referral succession planning—were important for
achieving the objectives of the service.

While it found the RFCS program to be functional and well designed, the council suggested improvements in both administration and delivery of the service.

The report lists 41 findings and makes 33 recommendations.

Key recommendations include:

  • moving to a state-based delivery model;
  • improving professionalism and quality of service provider boards;
  • gaining greater clarity in the governance roles and responsibilities of the Australian Government and service providers;
  • making funding arrangements more responsive to demand;
  • increasing flexibility in the RFCS workforce;
  • introducing more robust eligibility criteria;
  • more structured monitoring and evaluation, supported by an improved data collection tool.

The council said a 20pc reduction in overall costs could be achieved by removing excess capacity and improving the efficiency of the program’s structure and service delivery, without signifantly affecting the delivery of the service in New South Wales and Queensland which are currently experiencing challenging climatic conditions.

“Taking this into consideration with the efficiencies possible from improvements to program structure and service delivery, there is potential for significant cost savings,” the report states.

“As such, there should be a commensurate reduction in total RFCS program funding.

“While it is difficult to quantify efficiency gains achievable and the level of under-use of the service, NRAC’s general observations suggest savings could be in the order of 20 per cent of total program funding.

“However, NRAC acknowledges it may take time to realise efficiency gains and there must be no significant, short-term impact on service delivery. Consideration must be given to providing the time and resources required to effectively manage change within service areas. ”

Additional resources should also be provided under a needs-based funding model, the council has recommended.

Overall the council said the RFCS had played an important role in rural communities and had been an enduring policy success for Australia’s primary industries.

“While the many benefits provided by the RFCS are often difficult to quantify, discontinuing this service would be detrimental to rural Australia.

“The changes recommended by NRAC should improve client outcomes and ensure that the RFCS continues to be efficient and cost-effective.

“Nonetheless, governments and service providers must drive ongoing innovation and improvement so that the RFCS remains a relevant and valuable service over the long term.”

Agriculture minister Barnaby Joyce Today Minister for Agriculture, Barnaby Joyce, said he had heard “over and over” of the invaluable assistance the RFCS was playing to provide those in need.

“Importantly, the independent review strongly supports the continuation of the RFCS—as do I, and outlines a number of ideas aimed at improving this vital service so that it better meets the needs of those who rely on it,” Minister Joyce said.

“I would like to thank Mick Keogh and his NRAC colleagues for their work on the report.

“I’ve now asked my department to seek further input from RFCS providers as well as the state and territory governments who contribute funding to the service.

“I will then consider this input, along with the NRAC review report, to ensure the government’s response to the review provides clear steps forward for an even more effective RFCS for the future.” Minister Joyce said.

The Australian Government provides grants to 14 not-for-profit organisations to employ suitably qualified rural financial counsellors—there are about 125 financial counsellors currently working across Australia. State governments and the Northern Territory government also contribute funds to the service.

NRAC is an independent advisory body, which provides advice and information to the Australian Government on a range of agricultural and rural issues. NRAC comprises eight members, with representatives from the Australian Government, the state/territory governments and the National Farmers’ Federation, with other experts in rural and agricultural matters also appointed to the council. Mr Mick Keogh is the chair of NRAC.

To read NRAC’s Review of the Rural Financial Counselling Service, visit agriculture.gov.au/agriculture-food/drought/nrac/review-rfcs.

 

 

 

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