Central West Rural Financial Counselling Service

About this Item
Speakers - Turner Mr Russell; Amery Mr Richard
Business - Private Members Statements

CENTRAL WEST RURAL FINANCIAL COUNSELLING SERVICE

Mr R. W. TURNER (Orange) [4.37 p.m.]: I acknowledge the presence of the Minister for Agriculture and thank him for his concern for the plight of the Central West Rural Financial Counselling Service. The service urgently needs financial support to maintain the community service it currently provides to land-holders within the Orange electorate and beyond. In June 1992 that service employed one rural counsellor and a part-time administrative assistant. Since 1992 the service has grown considerably to a point where an average of 200 to 250 clients are assisted annually. The past 12 months has seen a significant increase in the workload due to a change in the type of work conducted by the service.

Previously the majority of clients contacted the service seeking help with interest subsidy applications or other rural adjustment scheme assistance. Currently 80 per cent or more of the clients contact the service seeking assistance with bank negotiations, refinancing proposals or business analyses. There has also been a significant increase in farm debt mediation work, acting as an advocate for the farmer. This type of work is far more time consuming and stressful and has led to an unsustainable workload for only one counsellor. As a result, the service has been forced to employ
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another assistant, on a casual basis, to assist the rural counsellor with the increasing workload.

Subsequently this casual position has progressed, on a demand basis, to approximately 30 hours per week to keep up with the increased workload. It is now obvious that a full-time additional counsellor is required to fulfil the demands being placed on the office by the clientele. In addition to this increase in workload, the service is also being asked to contribute to an increasing number of rural industry reviews and offer opinions on industry issues such as the effect of the withdrawal of banks from rural communities. This is, therefore, having a significant affect on the overall workload and will ultimately lead to counsellor stress and burnout if additional financial assistance is not provided by way of the employment of a second counsellor.

When the service was first set up, it was located in the grounds of Bloomfield Hospital, which was an advantage to the cost of running the service as the rent was donated back to the service. However, this had a detrimental affect on clients who were loath to attend interviews as they were concerned they would be labelled as having a mental problem because they were seen on the grounds of the hospital. Therefore, due to the necessity to move to larger premises because of the increased workload and the inappropriateness of the service being located within a mental hospital, it was decided to relocate the service. Unfortunately this had a negative effect on the budget, because the service now has to pay $9,000 rent per year.

I am aware that earlier this year, additional funding was given to the Macquarie Rural Advisory Service in Dubbo to employ a second counsellor. I ask that the Government provide an additional $50,000 to fund an additional counsellor for the Central West Rural Financial Counselling Service. The demand for the service is expected to increase over the next 12 months as farmers in this area continue to experience the after-effects of drought, low cattle prices, low pome fruit prices and the ever increasing prevalence of ovine Johne’s disease.

Even though there has been an upturn in the wool market recently, producers do not expected a large return, because farmers cannot afford the high costs involved in the purchase of additional stock. In addition, there is the additional burden of the continuing drought, which is linked to the El Niño phenomenon. The workload of the Rural Counselling Service has also increased as a result of banks becoming more heavy handed with rural clients, especially those who have been unable to reduce their debt. The service is now seeing a number of clients with 80 per cent to 90 per cent equity, who are experiencing bank problems. This trend is likely to continue as the banks move more towards cashflow lending rather than equity lending.

The average equity of rural counselling clients in the Cabonne shire - 35.5 per cent of all clients - has risen to 73 per cent in the last 12 months. Even though equity levels are rising, the average client is still suffering cashflow problems indicating mounting financial problems in this region. These problems are exacerbated by the fact that banks are centralising or rationalising their operations, pulling out of rural communities and pushing clients towards seeking advice from rural counselling services as they refuse to offer rural clients a service without large imposts. A breakdown of the areas covered by the central west service includes Cabonne, Evans and Blayney.

Mr AMERY (Mount Druitt - Minister for Agriculture) [4.42 p.m.]: I thank the honourable member for Orange for raising this matter. I acknowledge the great role that rural counsellors play, as would the honourable member for Bathurst from his championing of the Farm Debt Mediation Bill. The honourable member for Orange referred to the increased workload for many financial counsellors. The arrangement with funding for financial counsellors is that basically 50 per cent of funds come from the Federal Government, 25 per cent from the State Government, and the remaining 25 per cent is contributed by the community, on a needs basis. In some areas the Government has picked up the community contribution where its funds were short.

In past years, because of the severe drought, the State Government has picked up that contribution. In the future, as rural conditions improve, communities will return to the practice of contributing 25 per cent. Financial counsellors provide valuable financial advice to farming families experiencing financial difficulties. Counsellors are an excellent source of advice to farmers who are stressed when banks approach them. Counsellors advise farmers whether they should remain on the farm or leave and take up another occupation.

I assure the honourable member for Orange that I will seriously consider the application by the Central West Financial Counselling Service for extra funding. As the honourable member pointed out, the Government has provided extra funding to the Macquarie service. Pressure is placed on counselling services to look at their overheads; the central west service has incurred a charge of $9,000 a year in
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rent as a result of a change of venue. I will ensure that this matter is thoroughly investigated and I will reply directly to the honourable member for Orange in the near future.

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