Deputy speaker –
As the deputy chair of the Standing Committee on Agriculture and Water Resources, I welcome this report into superannuation fund investment in agriculture.
Firstly, I’d like to thank the chair, the Member for O’Connor, and the rest of the committee for their hard work in this inquiry. I’d also like to thank everyone who made a submission and attended public hearings to contribute to the outcome of this report.
As the opening statement in this report says, “agricultural commodities provide approximately $60 billion annually to the Australian economy, making the sector a major economic contributor” yet it has the potential to be bigger.
Australian agriculture is uniquely appealing due to the size of our nation, our proximity to Asian countries allowing exportation opportunities, and the ‘variety of climatic zones’ that enable producers to offer a diverse range of commodities.
The Group Chairman of Duxton Asset Management, Mr Ed Peter, explained the benefit of investing in agriculture over other assets like energy, metals and mining, is that agriculture ‘is a gift that keeps on giving’. He stated “with both energy and metals and mining, once I dig it out, it’s gone. [Agriculture] is a gift that keeps on giving. As long as I husband my land, I will get a return every year.”
Interestingly, both ASIC and APRA indicate that no specific regulatory or legislative barriers to agricultural investment exist within their remits. Yet despite this, industry analysis suggests that Australian superannuation funds ‘only [hold] a very small portion of farm assets in Australia’.
It was the duty of the committee to understand why.
This inquiry analysed a number of perceived barriers preventing the potential of superannuation fund investment in agriculture in Australia.
This analysis came to a few important conclusions;
As identified throughout this report, the cause of low superannuation investment in Australian agriculture is complex and contested. No one single barrier—regulatory or otherwise—is to blame.
The recommendations put forward by the committee will be the first step to addressing these points.
I’d like to finish by sighting the conclusion from this report, as it effectively represents the finding from this inquiry.
“The Committee does not believe that the issues identified and the recommendations outlined in this report will solve this issue overnight. However, there is room for incremental improvement in data capture and analysis, unintended taxation impacts and sector understanding. The recommendations outlined in this report will hopefully lead to change in both the superannuation and financial sector and the agriculture sector, to bring about mutually-beneficial relationships going forward.”