Banks urged to show support to CQ graziers - Flynn MP O'Dowd
MEMBER for Flynn Ken O'Dowd has urged banks to give CQ graziers a break and hold off property foreclosures.
In a speech to parliament on Monday, Mr O'Dowd made a passionate plea for financial institutions and governments to do what they could to support the region's cattlemen and their families. He said he'd been told of a suicide a week in the industry.
Last week banks had also started to foreclose on properties with Mr O'Dowd saying default notices had been handed to about 30 properties in his electorate.
He said the industry had been crippled by the combination of the live cattle export ban, drought and low prices.
"In Gracemere last week you could pick up a pen of fat cows - and there were some fat cows there - for 80 cents a kilogram. That is an unbelievably low price which has not been seen for many decades," Mr O'Dowd said.
"On top of this, there are falling property valuations. In some cases properties have fallen from 30% to 50% in valuation."
He said if graziers got good rain now it would still be another 18 months to two years before it returned any cash flow to their businesses.
"It is obvious some will not survive," Mr O'Dowd said.
"This is a disaster of historic proportions."
He said as well as banks holding off, the federal government needed to look at buying some of these properties and selling them back once good weather and good markets returned.
"That would be a win-win situation, and the landholders at least would be able to leave the industry with some dignity," Mr O'Dowd said.
See Mr O'Dowd's full speech below:
Mr O'DOWD (Flynn) (21:05): Tonight I would like to speak about the dilemma facing the cattle industry in not only Queensland but also New South Wales.
Over the past two years the cattle growers have suffered a lot.
It started with the banning of live cattle exports to Indonesia.
This led to a halting of cattle movements throughout Queensland and it gutted the market completely.
Then two years ago the drought hit, which compounded the problems. Queensland is now 80 per cent drought declared. Prices of cattle have plummeted.
In Gracemere last week you could pick up a pen of fat cows-and there were some fat cows there-for 80 cents a kilogram.
That is an unbelievably low price which has not been seen for many decades. Grain prices are high and feed lots are full.
The producer cannot get back that cost of the feed lot when they sell the cattle.
On top of this, there are falling property valuations. In some cases properties have fallen from 30 to 50 per cent in valuation.
This makes our cash equity with the banks an intolerable situation.
Bank interest rates are still relatively high.
Although we have a cash rate of 2½ per cent, I can tell the House that graziers are paying much more than that for their loans.
Furthermore, the banks in my area started to foreclose on some properties last week and default notices were handed out to about 30 properties in my electorate.
Breeding stocks have been sold, so where do they go from here?
If they get decent rainfall now it will still be another 18 months to two years before it returns any cash flow to their businesses.
It is obvious some will not survive.
Some will survive with federal and state government drought assistance-four per cent loans over five years.
Some individual companies will survive and carry on regardless, and probably buy out those who go down the gurgler.
My concern is the future, with the financial institutions selling these properties up. There is no redundancy package for these property owners.
They will not have a roof over their heads.
Where do they relocate to?
In most cases, all they know is cattle, how to look after cattle and breed good stock.
Sadly, there are suicides-one a week, I am told.
This is a disaster of historic proportions.
And we cannot see the end of this-it is not just around the corner.
What needs to be done? We, as a government-both state and federal-must focus on the real issue and make it a high priority.
Banks need to hold off; many of these businesses will be viable in the long run if only they are given a break.
I ask the federal government to look at buying some of these properties and selling them back once good weather and good markets return.
That would be a win-win situation, and the landholders at least would be able to leave the industry with some dignity.
The downturn is not just with the cattlemen themselves and their families.
Whole rural towns that support the cattle industries are also suffering.
Motels in the area have dropped from 80, 90 to 100 per cent occupancy in the good old days when we had the resource industry booming and the cattle industry booming down to two and five per cent.
This is a tragedy for small towns. If farmers go, businesses go and small communities go-schools, police officers-and we also know that post offices are all under threat in these rural areas.
We need people to stay in the bush.
And we need people from the cities to come and help.
To those people in the cities who are unemployed: you are needed out in the bush, please come.
Services are stretched and so are the bank balances, but there will be an end to it and, hopefully, it will be a good end when the rains fall shortly."