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Overview of performance

2019-20 was the RIC’s first full year of operation with its permanent workforce in place. During that year we approved $715 million worth of Farm Business Loans and continued to lay the groundwork for the NWILF by exploring potential projects. Due to the maturity level of our organisation and its data capture systems, our aim in 2019-20 was to establish baseline data to enable measurement of our progress in future years. In that context, we achieved initial results against the measures outlined in the table below. We identified that the 2019-20 measures could have been defined more broadly to give better context to each performance indicator and will adapt our approach accordingly in our 2020-21 Corporate Plan.

We conducted market research surveys to assess critical aspects of our performance during the reporting period. We received valuable input to a quantitative online survey from 332 RIC-assisted farmers, six water infrastructure proponents and 14 Farm Business Loan stakeholders. We also conducted qualitative in-depth interviews with seven RIC-assisted farmers, six water infrastructure proponents and eight Farm Business Loan stakeholders. The key insights from this research suggest that RIC Farm Business loans are making a difference to growth and resilience in the agricultural sector, which represents early-stage progress towards achieving our purpose to build a stronger regional Australia.

Building awareness

We have established a solid foundation for our Building Awareness objective. In 2019-20 we undertook a raft of awareness-raising activities through engagement with our key stakeholders, refinement of our customer communication channels and establishing a network of staff across the country who worked directly with our clients’ trusted advisors to aid the application process. We experienced unprecedented demand for our Farm Business Loans and saw our water infrastructure stakeholder engagement efforts begin to uncover potential projects for NWILF loans. It is clear from customers and stakeholder surveys that RIC Farm Business Loans are having a positive impact on Australian farming families. Our research also indicates that water infrastructure proponents strongly agree that NWILF has the potential to improve water security and sustainability in regional communities.

Strengthen delivery of our functions

We have made inroads towards achieving our Strengthen Delivery of our Functions objective by ensuring our loans are attractive and accessible to eligible applicants. During the reporting period, the RIC could only provide NWILF Loans to state and territory governments, therefore limiting the number of viable NWILF loan projects. We have further work to do to ensure the NWILF loan is fit for purpose to loan recipients in terms of risk and interest rates and to increase accessibility to NWILF loans for water infrastructure proponents. The 2019-20 year showed that we have further work to do to improve our Farm Business Loan processing times to meet customer expectations on timeliness. The main factor in 2019-20 that lead to lengthened processing times was a spike in demand from November 2019 onwards due to changes to our loan products and the introduction of new products. In 2019-20, the RIC received over 2,300 Farm Business Loan applications compared to an original estimate of between 300 and 550. 2020-21 will see the continuation of this objective to ensure a focus on improvement initiatives that enable us to streamline our service delivery and improve the customer experience.

Improve products

We saw encouraging results against our Improve Products objective, with research indicating RIC Farm Business Loans are having a positive impact on farmers’ profitability and confidence in their place in the agriculture sector. However, 2019-20 showed that our loan processing times need to be reduced to ensure loan funds reach recipients as soon as possible.

Performance

Indicator

Measure

Source

Measure

Result

Analysis/

Commentary

Corporate Plan Objective 1: BUILD AWARENESS – Achieved

Our stakeholders are aware of the RIC and understand how we contribute to regional and economic growth through our loans

Case study analysis and referral data to establish a baseline

Market Research, qualitative in- depth case study interviews (pages 26 & 29) Base: All respondents (n=14)

Achieved

Most RIC stakeholders (85%) are aware of the RIC and half of these stakeholders agree the RIC contributes to regional and economic growth.

$500 million is made available to eligible farm businesses in need to improve their circumstance*PBS

Department announcement and budget commitments Market research report (page

9) Base: All respondents (n=332)

Achieved

The RIC made available the funding allocated by the Australian Government and in 2019-20 approved $719.9 million in loans. Awareness is demonstrated by the level of demand experienced in 2019-20.

Most RIC-assisted farmers (80%) agree that the RIC contributes to regional economic growth and investment. A similar proportion agree that the RIC contributes to resilience in Australia’s regional communities (76%), providing a strong indication that RIC loans are contributing to broader regional outcomes.

Corporate Plan Objective 2: STRENGTHEN DELIVERY OF OUR FUNCTIONS – Largely achieved, but continuing in 2020-21 with a shift in focus to customer experience

RIC is contributing to improved financial and lending services

Case study analysis and surveys of staff to establish baseline

Application data Staff survey Market Research qualitative in-depth case study interviews (page 30) Base: All respondents (n=14)

Achieved

Half (50%) of Farm Business loan stakeholders believe (to ‘a great extent’ or ‘some extent’) that the RIC is contributing to improved financial and lending services in the agricultural and farming sector.

The median processing time of 252 days between application and settlement has increased significantly since November 2019 as a result of demand following the Australian Government’s announcement of a two-year interest free period. The RIC received over 2,300 applications compared to an original estimate of between 300 and 550. Median processing time data has been collected since March 2020.

During the reporting period, 66% of applications received were incomplete. Staff consultation confirmed that the performance improvement measures that have been implemented in the 2019/20 financial year will continue to reduce the outstanding number of incomplete applications and will reduce processing times in the 2020/21 financial year.

Water infrastructure proponents feel supported by the RIC

Market testing through surveys with satisfaction and referral indicator to establish baseline

Market Research qualitative in-depth case study interviews (page 20) Base: All respondence (n=6)

Achieved

All water infrastructure proponents feel supported by RIC either ‘adequately’ or ‘to a great extent’ and most indicate they know a lot about the RIC, a reflection of their close dealings with the RIC and its staff.

Views are mixed when it comes to RIC processes, however, with proponents leaning more towards satisfaction than dissatisfaction.

All eligible farm business have access to farm businesses loans and flood recovery loan *PBS

Establishment of a nationally consistent delivery model

RIC guidelines, policies and procedures, compliance review checklists

Achieved

This establishment of a consistent delivery model was reported as achieved in the 2018-19 Annual Report, with federally funded loans now centralised and assessed by the RIC in a nationally consistent way.

RIC maintains loan guidelines, assessment policies and procedures and a loan audit program that reviews consistency of assessment that applies to all applicants regardless of location.

In 2019-20 we continued to audit disbursed loans and found all applications were assessed in a consistent manner according to our eligibility guidelines and processes.

The water loan facility is available to states and territories *PBS

No days are lost in the transfer of the administration of the loan facility to RIC

N/A

Achieved

This item was reported as achieved in the 2018-19 Annual Report, with the RIC having assumed responsibility for the NWILF on 1 July 2018. No days were lost in transferring the administration of the loan facility to the RIC.

The NWILF continues to be available to all state and territory governments.

Loan monies (farm business loans, flood recovery loans and water loans) are disbursed and received accurately and in line with contractual and legislative requirements *PBS

100 per cent

Compliance review checklists

Achieved

Post-settlement checks were undertaken to review consistent approaches to security that is taken to support a loan, that security has been documented and registered correctly, the loan product is appropriate based on the assessment of eligibility criteria, the loan is considered viable in terms of the assessment process that has been implemented and any exceptions to this are recorded with the appropriate mitigations presented.

The review and audit process did not identify any funds being disbursed inaccurately or contrary to contractual obligations.

Corporate Plan Objective 3: IMPROVE PRODUCTS – Achieved

RIC-assisted farmers have stronger balance sheets

Market testing through surveys of farmers across the regions to measure confidence in the strength of their balance sheets

Market Research quantitative survey (page 14) Base: All respondents (n=332)

Achieved

79% of respondents agreed RIC loans provided greater confidence in the strength of their farm balance sheets.

RIC-assisted farmers are more profitable

Market testing through surveys of farmers across the regions to measure confidence in their profitability

Market Research quantitative survey (page 14) Base: All respondents (n=332)

Achieved

76% of respondents agreed RIC loans provided greater confidence in the profitability of their farm.

RIC-assisted farmers are more confident about their long-term future in agriculture

Market testing through surveys of farmers across the regions to establish baseline

Market Research quantitative survey (page 14) Base: All respondents (n=332)

Achieved

82% of respondents agreed the RIC loans provided greater confidence in their long-term future in the agriculture industry.

*PBS denotes performance criteria from 2019-20 Portfolio Budget Statements