Farms owned by self-managed superannuation funds?

Why indeed ?

Why indeed would Australian farmers put their farms into self-managed superannuation funds?

The benefits are reduced taxation of farm profits. From what I have seen in a very long career of advising farmers on taxes and financial matters, there are so many tax concessions for farmers and seasonal conditions vary so much, that a lower tax rate is not their highest need.

Those saved taxes could be used for family holidays, dinners in town, off-farm investments, tertiary education for the children. Or it might be reinvested in the farm and fade into the background of it. It could build up substantial funds in the bank, clear the bank debt or buy new equipment.

Which do you think will be most likely to happen? Is that good or bad?

So what might be the downside.

The cost of paying for the self-managed super fund to be formed, documented and run by professional accountants or fund managers might be high. Lawyers to check out the legal implications may be expensive ands o may fees for it to be audited. That can be fairly big money to begin with and annually.

Then there is the fact that if farmers don’t pay reasonable taxes then we will not get decent schools, hospitals and roads in the bush or relief packages when droughts, bushfires and floods arrive.

Scrambled eggs!

You’ve heard of unscrambling eggs? For most farm families dealing with the accounting, tax and legal implications of a self-managed super fund when one wants to sell the farm can be daunting. When the next farmers want to actually own the land the farm is on, it can become costly. Or the farmer who set it up dies and the family fights over the estate assets, then some very expensive experts get involved in that unscrambling exercise. When it is all done and dusted the cost may just exceed the market value of the farm.

Double, double toil and trouble!

What self-managed superannuation funds and trusts often do when used for the farm ownership or operations, is cause more trouble than they are worth. One of my early professional Chartered Accountancy partners once remarked to me “ Never mind the tax. No matter how much tax you pay there will always be some profit left for you. Concentrate on making the profit, not reducing the tax.” After two significant farms I agree with him 100%.

When a self-funded superannuation fund is used for avoiding taxes on farm profits the farm may effectively move out of the absolute ownership and control of the farming family, to professionals.

I may be old-fashioned, but I have always wanted to be in complete control of my farms and businesses. If taxes were excessive I would try to find a better way of saving tax. They mostly aren’t for farmers with decent accountants.

Succession Planning

And on that subject I think there are a good few farmers in Australia being grossly over-charged for “farm succession” plans that stand every chance of causing massive disputes and perhaps legal arguments between family members after the death of the current generation. When I purchased my last farm from a relative with four daughters, we developed a very simple plan that worked very well for him and them as well as for me, over the next two decades. Simplicity is the best solution.

Greed driven banks seek riskier loans

Never satisfied, Australian banks today want the federal parliament to allow them to lend voters into even more risky loans. That is in today’s SMH. Riskier for the borrowers that is, not risky for the banks. The banks hold the mortgage over the properties and guarantees for the loan repayments. The borrowers risk everything including their loan repayments. Those can easily be eaten up in bank charges if the loan terms can’t be met. Aussies also suffer from being substantially crowded into capital cities where home prices are off the graph.

Borrowers don’t check until it’s too late!

Few borrowers ever read the restrictive and punitive loan contracts. These bind borrowers to sell their souls to the bank s. The banks make huge profits out of clever Debt Traps. Once the borrowers cannot make the scheduled loan repayments, the Aussie bankers jack up the interest rates. So if the repayments were hard before, they become impossible now. That can continue for years before the bank actually forecloses. then it often takes all the repayments and the proceeds of the mortgaged property.

Bank profits skyrocket as tax rates fall

Bigger profits and lower taxes are keeping Big Bank Bosses in the style to which they have become accustomed, while many Aussies battle to pay their weekly bills. $20,000 to $100,000 a DAY is what big bank CEOs earn. Not bad pay, for a day! Massive increases in profits back those pay packets. In 2023 CBA earned 4,500 times, in real money terms, what it earned in 1971 when I started my Chartered Accountancy practice.

Back in 1971 the company tax rate then was 48% and in 1986 it was 49%, same as the personal tax rate. Today as bankers count their profits in billions rather than millions, our politicians have reduced the company tax rate to 30% compared to the top personal tax rate of 45%. Borrowers need to use their power as voters. They are treated badly mainly because they do not engage with their MPs.

Debt sucks money out of the economy

The huge increase in demand created by high Australian immigration and the large amounts of money some immigrants bring with them, is increasing prices. The ability of people to put much of their spending “on tick” with the banks has also created a spending boom like never seen before. When we no longer need money to buy what we want, life is fabulous. Champagne and caviar all round. Problem is that the interest just adds a little bit more to the price of what we buy. If we leave it on the card then it can make a huge difference to the prices of what we buy. The hangover begins as the bank debt becomes too high to come down. In that way we pay into Big Banks large amounts of money for what we buy, but big banks are cutting back on what they spend on customer services, also to boost their profits.

Much money is moving from consumers to banks via many businesses selling on credit, so banks are rich and customers are poor. The gap widens and people need to borrow more money even for essentials. That is when the Debt Trap works best. People wanting a home or car just want the loan to buy the home. Only later will they think about what happens if the don’t do what the loan contract, that they have not read, requires.

Not just consumers but public services too

That the big banks are sucking money out of our economy in profits and are being taxed at highly discounted tax rates explains why our economy cannot afford to fund schools, hospitals, police and emergency services and many of the other public services that we used to enjoy. The pay rates for university educated nurses, teachers, police and emergency workers, even in the highest ranks, pale into insignificance compared to the Big Bank CEOs

100% loan mark up

There is no need for banks to charge the interest rates they do. Home owners are charged 5% to 6% ; business overdrafts 8% to 10%. Banks can pay as little as 1.5% on savings accounts, 5% is a bit higher than most term deposit rates. So banks are paying 1% to 5% and lending at 5% to 10% or more. That means means a mark up or gross profit margin of 100% on the cost of money. At the same time customer service cost has been halved. It also means that the rates are negotiable. That I where the Borrow Better site saves money. It gives borrowers the best loan going and the ability to negotiate.

Customer alternatives

Bank customers have a few good options. They can hunt around to find the best possible bank loans. Rather than go to a bank-paid broker they can use the Borrow Better website to quickly find and negotiate the best loan deal from their viewpoint. Forget bank-paid brokers on $8,000 to $10,000 per customer.

They can engage a Banking Consultant to help protect them financially and a lawyer to help with the legal protection they need

They can also join Bankwatch and help persuade the elected parliament to develop a customer focussed banking industry with a government bank to boost customer care and provide fixed interest loans.

Let’s stop and take a deep breath before we move on. It pays to expand then consolidate, expand then consolidate.

Aussie Debt Solutions

The biggest crisis we face in Australia today is with unaffordable debt. We see businesses closing down or put into the hands of receivers. They are the financial vultures of our time. We see homebuyers forced to sell their homes and sometimes lose all the payments and stamp duty they have paid with money they worked so hard to earn.

In order to understand why we need specifically Aussie debt solutions it is important to understand the Aussie debt circumstances that have caused the problem.

Avoid debt like the plague

The best debt solution is to avoid debt like the plague, unless it is for some large project with the prospect of capital gain. To pay interest on a home loan which will provide a roof over your head for life, is a lot better for most people than paying rent. That provides no long-term benefit at all. So borrowing for home work well for most people, depending on how much they pay for a home. It took my wife and me 2 years of searching every weekend to find one that was what we wanted and could afford.

Never borrow for consumables like food or clothing and if borrowing for a car make sure it is very affordable and the car is good value

Check out the market then negotiate hard

When it is sensible to borrow, check out the Aussie debt market carefully. Most people borrow at absurdly high interest rates, like on credit cards. The wise people go without until they can afford to pay cash for it or borrow a lot cheaper than on the card.

GBAC Advisory established an easy “Borrow Better” service that is a lot better than being led to the unsuitable debt slaughter house by a bank paid broker. The broker is going to be given $7,000 or more to deliver borrowers like lambs to the slaughter.

Deal with defaults wisely

Turn the tables with some good advice on how to manage defaults and serious debt issues in a uniquely Aussie way. That delivers the borrower some substantial gains. At GBAC Advisory we seriously tackle the way the moneylending industry abuses customers after deliberately leading them into unaffordable loans. Those interested can email greg@gbac.au or reach in via the GBAC.au website.

Government in the pockets of the moneylenders

The moneylenders have got our Aussie federal government right in its pocket. The moneylenders had a special Aussie regulation passed to prevent GBAC Advisor from offering Debt Management Services to home owners .

The best Aussie debt solution is to avoid the mortgage brokers and instead use the Borrow Better service. It is more like a Borrowers Broker except that it does not accept any commission from any bank. It usually gets the bank to reduce both its charges and interest rates.

Aussie debt solutions are the way to go for Aussie home, business and farm borrowers seeking fair and affordable mortgage loans to suit Aussie situations.

Spending a fortune on succession planning?

Are you spending a fortune on succession planning? Are you lining up to spend tens of thousands of dollars on Succession Planning consultants and perhaps setting up a structure that is so complex that nobody will ever be able to disentangle it except the consultant who set it up for you?

What is required

Succession planning is very important for those running family farms and businesses, but it is not very complex and it is not very difficult. It is not hard to enable current owners to come up with who they want to own the operation when they don’t want to. Sorting out a fair solution for other family members is not difficult once the first decision has been made. Then the timing and trade-offs can be put in place.

Simple jig-saw

Succession planning is like a fairly simple jig-saw puzzle. The key is making sure that control rests where the owners want it for as long as they want it and how that is achieved. Like moving livestock, it works best if you take it a bit quietly and make sure that everybody stays happy as the process moves along.

People before profit

Whilst all consultants hope to make a profit out of advising their clients, in order to earn a crust for their own families, succession planning is about people more than money. It is about tradition and heritage. It often gives us a piece of the family history that is more precious than the land or the profit it generates. Younger generations are not always as tuned in to that as the older ones so both must be accommodated. Decades ago I lobbied parliaments successfully by Votergram to get more favourable tax and duty treatment of inter-generational transfers.

Experience

What is vital is that the consultants actually know from experience what it is like to hand on or take on family farms or businesses. I bought the farm my great-grandfather had settled in 1865 and I took over the business my grandfather had started in 1937. Succession planning should not be seen as a “good source of fees”, but as a chance to give professional assistance to a family in order to facilitate succession in a way that avoids causing dispute or disappointment within the family.

It needs time, not money

For that reason the earlier it is thought about the better, without necessarily putting anything in place too early, because family situations and goals can change over time. Early planning allows flexible options to be developed so that changing circumstances can be easily managed.

In one winery business that we consulted, the winning factor was time for everyone to go away and mull the proposal over, then come back and adopt it a year and a half later, with everyone happy with the outcome.

It’s a molehill not a mountain

Some advisers, consultants and counsellors are making a mountain out of this small molehill and a motza of money in the process. What the consultant needs to know about the farm or business is:

What it is, where it is and roughly what it is worth.
Who owns it now and who might own it after them.
What others might be contenders for succession.
What average annual net profit was for the previous five years.
Retirement plans of current owners, no matter what age they are now.

Don’t waste hard-to-earn money on complex solutions when simple ones are better. If you want to know more give GBAC Advisory a call on 0428 417 496 or email greg@gbac.au Happy to just chat about it.

Farm loans – what is different?

Plenty is different. Farming is different and farm loans need to be different. Otherwise they just become debt traps for the unsuspecting farmers.

Weather

Weather has a huge unpredictable impact on the ability of farmers to make loan repayments. That means the terms of the loan contract need to be tailored to fit with the weather pattern.

Bad seasons

Bad seasons are a key reason for loan defaults so the loan contract needs to provide flexibility in repayments to cope with floods and droughts. They are what farming in Australia is all about.

Fire

Bushfires rage in Australian summers destroying crops, pastures and often killing stock, so there needs to be a provision in each farm loan contract to cover what happens in the case of fire, flood and drought.

Pests

Mouse or locust plagues sweep Australia when seasons are just right for breeding and apart from costing a fortune to control, when out of control they can be very destructive of profits. Allowance needs to be made in the loan contract for pests.

Disease

Sometimes disease strikes, like bird flu, and devastates properties . This too needs to be taken into account when loans for as long as 15 or 20 years are taken on.

Stock on hand

This is a very valuable asset in any family business, but in city businesses stock on hand is inert and can be stored in a building. In farming the stock is alive and kicking and its nature can change in a matter of months depending on the factors listed above.

Loan management skills

Farmers are skilled at managing livestock, crops, pastures, soil, fencing, byers and sellers. They are not necessarily skilled in farm loan management because they are not doing it on a daily basis. At GBAC we are, on a national scale.

Borrowers Broker

We don’t call GBAC the Borrowers Broker, because we are not brokers and we never take any commission or other payment from lenders. We work only for the farmers and they pay us. It is rare for us not to be able to save them a lot more than what they pay us if fees, in the interest rate and charges they pay the lender.

Whoever pays the piper calls the tune

Don’t ever think that the broker who will be paid a fee of around $10,000 to deliver yo0u to a lender, is working in your interests above those of the bank that pays them. That is just impossible, no matter what the law says. Common sense is a lot more helpful than laws made by politicians who receive very large “donations” from the moneylenders.

Get it right from the start

When you want to get your loan working in your interests as well as those of the moneylending bank, give us a call at GBAC 0428 417 496, 0422907155 or 02 9988 3312 and let us get your loan set up correctly from the start. Farmers are caught like pigs in a trap by bankers who make loans on terms that are impossible for farmers to meet. Then when the farmers fail to do what is required the lender jacks up the interest rates to make it harder, bleeds the farm for as many years as it can until the debt approaches the market value of the farm, then sells the farmers up. Don’t get caught in this nasty debt trap and lose the farm!

Is the advice or assistance good or bad?

As consultants we have to constantly ensure that the advice we give is good for our farm and small business clients. That means helping them do what they want, but also warning them of dangers and pitfalls. Because we have farmed and run our own businesses, at the same time as consulting clients all over Australia, we do know many of the dangers and pitfalls.

Government paid advisers

How good is the government at governing? Does it know how to run your farm or business? What does it want to achieve by paying people to advise you. Is it trying to help you or help itself?

What are the government’s objectives
Governments want increased turnover from you to give them increased taxes to spend. They seek increased turnover from you to pump up the economy and make the money go around faster. The more debt you carry the more you will be able to boost the economy with the money you borrowed. People in debt often work harder and faster to cope with the burden of that debt.

Are you thriving or suffering?

There is nothing like a farm or small family business to pump sales proceeds straight through in expenses paid out to suppliers and government bodies.

The point of farming or running a small business is not just to enjoy the fabulous independent lifestyle. It is to earn money to share with our family, to enhance their future, expand their horizons and provide them with enjoyment outside of the farm or business.

Has the advice or assistance you received, increased the amount of money left over for you and your family at the end of each financial year. Or has all that adviser-driven expansion and borrowing in fact left the bank balance in the red? Could owner-operators have been led into mortgage debt that drains the farm or business of most of its profit or even places the farm itself at risk of foreclosure?

Benefit of doing it before advising others?

The government has never run a farm or small business. When governments lose money they just borrow more or increase taxes or both. Have your advisers run their own farms or businesses?

We learned a lot by running our own merino sheep property in the NSW Central West and our own beef cattle property and stud in the Southern Tablelands. We’ve also run our own sub-division, equipment hire and art rental businesses, as well as working for global corporations and small businesses.

There is merit in carefully assessing the advantages and disadvantages of using government resources including government-funded advisers. Farming requires special skills as does running a small family business. They are very different to the public service.

Check the outcome
No matter what we do or who we listen to, it pays to reflect on the result. Some of the advice I have received from government advisers has been superb but some of it has been quite costly. I have formed a view over my life that I get what I pay for. The person I pay works for me and with me, considers me first when giving advice. I pick them on the basis of experience, knowledge and past performance. Life is too short to find out later that the advice worked against me.

The financial statements are a good indicator in any business venture, as are the people you serve. High profit is what to aim for. If your stock or crops are up to scratch, if your goods and services are as good as your marketing says, your customers will know and spread the word.

Aussie Farmers Beware of the bank financial supermarkets

Farmers borrowing from only one bank-paid broker is like selling produce to just one Supermarket. The banks have become financial supermarkets fleecing farmers with the skill of a gun-shearer. They close branches, cut phone staff to keep you hanging on for ever then want you to travel miles to prove who you are.

Farmers come out worst. The 4 Big Banks alone earned a profit last year of $36 billion. That is to say they charged their customers $36 billion more than the services cost. The Banking Royal Commission revealed that many of them act illegally, dishonestly and deceptively. That is why as a farmer/HELP consultant I established the Borrow Better concept and service. It is how you lay the foundations for a loan that determines how well it works for you

The key to farm borrowing in Australia is to:

Prepare a good loan application explaining to the bank why it should lend to you
Use the Borrow Better presentation to each of the banks most likely to lend to farmers
On receipt of offers negotiate the cheapest loan with best terms and most friendly bankers
Ensure that all loan terms are clearly understood to avoid unpleasant surprises
Ensure that loan repayments are readily affordable in all seasons and circumstances.
Establish systems to ensure that repayments can be made in advance in good seasons to cover relief in bad ones.
Aim to clear the debt as early as possible
Ensure title deeds are safely recovered and mortgages discharged on repayment.

That is why it is better to borrow the “Borrow Better” way. And it is run by people not robots. Put some competitive pressure on the banks to win your farm loan business. We all work better under pressure. That is when banks give you the best deal.

Unseen brokerage costs farmers dearly
For every $1 million borrowed through a bank broker, the bank pays the broker around $7,000 which the bank recovers in interest and charges from the farmer. The farmer will possibly get the loan, but how the contract terms suit the particular farmer’s budget or circumstances is another thing. Neither the bank nor the broker will be that much worried about the farmer paying the loan back as long as the security is enough for the bank to sell the farm up anytime it wishes. The contract probably lets the bank do that anytime. But as long as the farmer works sunup to sundown to pay the bank interest of $60,000 to $100,000 a year per $1m borrowed, the bank will be no hurry for the loan to be repaid. But just when things get tough on the land is when the bank will often cut and run, calling the loan in at the worst possible time for the farmer. That is often when farmers call me at GBAC.

Borrow Better
That is why I set up the Borrow Better human app in 1987 when banks were first de-regulated. Some farmers will remember we called it Moneygrams then. One of the first users paid the $100 fee and made a cool $300,000 in interest savings because of it, without moving banks! It is better to get the right help earlier rather than later. We help farmers obtain the most suitable, cheapest loan, with the most suitable contract terms from the most agreeable banker, right at the start. GBAC is a HELP consultant.

When taking the bait watch out for the hook
What is not obvious to most people when borrowing is that the money is the bait and the contract the hook. Like fish, many farmers offered the loan happily grab it while it is going, without noticing or even reading the contract on which they are hooked, with their family farm on the line.

The Borrowers’ Broker
Sometimes I think of us as the Borrowers’ Broker because we take the borrower to all the banks and tease out the best one for each particular borrower on the basis of the farm production, seasons, prices and government policies and the family needs of the farmers. We also help the farmer to clear that debt as fast as possible because very often the bank earns more out of the farm than the farmer does. (Compare your “Interest paid” with your “net profit” or “taxable income” to see how it is for you).

Inherited debt – the farmers curse
Leaving the debt to be passed on to the younger generation is not a good idea. Plenty of farmers remember when the interest rates went up to 24%. At present, rates are low because recession is hanging over the world and has been since well before Covid struck. The good thing about recession for farmers is that they can usually feed the family, but it can make a big difference if the farm income drops and the debt goes into default, so that the bank forecloses. My second cousin, from whom I purchased the beef cattle property settled by my great-grandfather, told me that when he was young and depression struck, the only reason the bank did not sell the farm up from under his family was that its value had crashed and would not nearly cover the debt. Today the bank just sells the farm and writes off the rest of the debt. Banks make so much money that a write-off is just like a drop in the ocean. We often turn that to the advantage of the farmers tricked into unaffordable loans by ruthless bankers. My cousin took over running the farm, cutting costs to near zero. The day, decades later that he cleared the debt and recovered his title deeds he took his staff to the pub to celebrate. It concerns me greatly that some rural consultants and counsellors may be encouraging farmers to have their children borrow from a bank to buy them out. One farmer described that to me as “Child Abuse”.

Drought
As he handed the farm over to me on a substantial cash deposit and long payment terms, he warned me, “Remember, when you come out of each drought, you are heading into the next one.” It was sound advice. As revenue came in I saved money and hay for those long hot sunny days when there was not a blade of grass on the ground. Then I adopted a policy of gradual de-stocking as drought hit and breeding up numbers again in good seasons. That worked surprisingly well. A neighbour commented on how fast our place re-stocked after drought without ever buying cattle in.

Whip Hand
Farm profit is a mental process. Decisions on spending are the key determinants of being able to continue the farming life. We help farmers make those decisions, because we know that farming is the best life in Australia, but it is hard won. We also help farmers guide governments into doing what is needed for farmers. Farmers, as voters, mostly hold the whip hand, but too often don’t use it.

HELP Consultancy
A HELP consultancy is there to help its clients, not to focus on making money out of them. Today we see too many consultants and government services based around the service providers getting rich whilst the farmers battle seasons, governments and prices. My grandparents and great-grandparents would be happy that I have been able to establish a HELP consultancy that has helped farmers from the tip of FNQ to King Island and up to the Kimberleys then into the centre. There are many better farmers than me, but to run sheep at Tullamore and cattle at Braidwood along with a national HELP consultancy that grew out of my Chartered Accountancy practice is thoroughly enjoyable.

Fair Go for All Aussie

Fair Go for Aussies

It surprises me that 40 years after we invented our Votergrams and Moneygrams, some Australians are still having trouble dealing with their banks and governments.

The words I learned in my youth ring true, “If we always do what we’ve always done, we’ll always get what we’ve always got.”

There are very specific new strategies required to obtain good results from both banks and governments. The world has changed and the old ways no longer work as they did.

The naïve belief that both the banks and the government are working to serve the people should surely be dispelled in a few words.

Borrowing & the Bank

Banks are making multi-billion dollar profits that enable them to pay multi-million dollar salaries to executives. If you were able to earn that much money would you want to stop in order to give customers a fair go? Not likely, when the customers just keep on coming regardless!!

Will brokers, paid huge commission of about .008% ($8,000 on $1m) on each loan they deliver to the bank, really look after your interests ahead of that of the bank that pays them? Not Likely!!

Bankers and borrowers sit on opposite sides of the table. One wants the best deal for the bank. The other wants the best deal for the borrower. As in arm wrestling, the one with the strength wins.

Australians who really want to borrow better, google “Borrow Better”. That brings them to BorrowBetter.au to borrow better as many have done since de-regulation in 1987. Then we can help them with proven borrowing and negotiation strategies so that they get an extra special deal as the bank saves a mountain of brokerage.

Sure it takes a bit more effort, but doesn’t everything that’s worthwhile? It is better than learning the hard way that “variable” means the interest rate can vary up as easily as down, at the will of the moneylender. ferris wheel

Government and Society

With 27million people, 17 million voters, how could any government please everyone. It can’t!! The government does what active voters persuade, bully or bribe it to do. The first step for Aussies is to take off their “Community” hats and replace them with their “Voters” hats. The parliament that they elect as voters is their pathway to good government. Those Votergrams have proved to be the very best vehicle for using that pathway to guide government departments, contractors and bodies.

Votergrams embrace not only the ability to reach each and every MP, but also a wide range of very successful strategies that have been progressively developed over those almost 40 years, many with the active assistance of Members of Parliament and parliamentary staff.

Votergrams are all about working with parliamentarians through polite, persistent political persuasion in the privacy of parliament.

FairGO

All Australians are entitled to a fair go and we have found that we can generally make that happen for them.

Greg Bloomfield

Profit-sharing with the bank!

Check it out

How much are you profit-sharing with your bank or other moneylenders?

A quick look at the Profit and Loss Statement in your tax return this year will tell you. If you don’t want to wait that long, look at your 2023 tax return

Go to the Profit and Loss Statement and highlight the Net Profit at or near the bottom

Then go up the column to the line for Interest or Interest paid and highlight it.

Compare the two figures.

If Net Profit is four or more times the amount shown as “Interest” then you are probably going okay. If Net Profit is 10 times Interest, or more you are certainly not working for the bank.

If Net Profit is about the same amount as Interest paid then you are sharing your profit equally with the bank or other moneylender. That means that if you are working a 12 hour day on your farm or in your business, you are working 6 of those hours for the bank.

If interest is 3 times your Net Profit there is a more serious problem. That means you are working 9 hours a day for the bank.

If interest is 10 times your Net Profit, you are working about 10 hours a day for the bank. Time to change that.

It’s good to know

It is good to know who is making the most out of your working day, because sometimes we work long and hard to make a mountain of money for others but very little for ourselves.

The solution is usually to plan your finances to increase the profit you earn and decrease the interest paid to the bank. A budget that increases profit and decreases debt is the best solution.

Plan your profit in advance

I had always known that, but when I first bought then expanded my merino sheep property at Tullamore and then added my beef cattle property at Braidwood, the truth came home to me in my own financial statements as well as those of my clients all over Australia. It is one thing to consult others but a quite different thing to do it yourself.

Doing my own budgets and changing the farm financial structure so that we were making most of the profit took a bit of time but was very rewarding. When we farm, our focus tends to be mainly on crops, livestock, vehicles, fences and feed. Finances do not enter the daily routine except when the bills come in and we look for funds to pay them.

As a friend once comment to a group discussion, “If you fail to plan, you plan to fail.” Financial Farming is what delivers the financial rewards for those long hard days of work

Greg Bloomfield, GBAC

Farmers Friend or Foe

Who is the Aussie farmer’ friend?

The good farm debt consultants, of course!

Don’t be misled into cash-draining debt by some foe working for the bank or government. Good debt is debt to buy an appreciating asset like more land. Bad debt is debt to cover operating costs or farm succession. There’s more than one way to finance farm operations and succession.

On the Australian Bankers Association website is a bank-friendly warning from ASIC, “AFCA and consumer groups continue to raise concerns with ASIC about the conduct of debt-management firms” –

Who is on the farmer’s side? Not the Bankers’ Association! Nor ASIC! Both are trying to frighten farmers from getting good advice about farm loans. Farmers can wonder whether ABA and ASIC know anything about livestock or crops and imagine that “fencing” is a sport played with swords.

Banks made to refund billions. A farmer who did this would be in gaol!

In March 2023 banks were ordered to or offered to refund $4.7 billion dollars they had wrongly taken from customers. One farm debt consultant says that could be the tip of the iceberg. “ASIC protects dishonest banks instead of gaoling their directors who have ruined farmers’ lives. How can banks steal $4.7 billion from customers and yet the directors who direct bank operations have not even been prosecuted for theft or fraud, let alone gaoled?”

Negotiating with bankers and marking calves have a bit in common

As a 4^th generation farmer, Greg Bloomfield was fortunate enough to qualify as a Chartered Accountant, CPA, Chartered Company Secretary and Fellow of the Institute of Directors (AIDC) by his early 20’s.But like his grandfather and great-grandfather what he really enjoys is running sheep and cattle. When banks were de-regulated in 1987 and given free- rein to rob customers, he decided to focus his Australia-wide professional practice on helping farmers fight back. He did that while running sheep at Tullamore and cattle at Braidwood. The difference between bankers and livestock are that the stock are pretty honest, but both lose a bit in the process. He still does that and not one farmer anywhere has had anything but praise for his determination in getting them a fair debt write-off. The “about” page on his website displays the glowing praise of his past clients.

Greg Bloomfield and GBAC are on the farmer’s side. For years he headed the largest branch in NSW Farmers and toured the state visiting farms to get huge debt write-offs and addressing local groups. While he says “I’d rather be working cattle or fixing fences than battling banks”, the internet has meant that the time he spent traveling from farm can now be spent in earning farmers more money from debt negotiations with their bank, than many have earned in years of farming.

Borrowers beware and ensure you know what the repayments will be.

It was Greg’s wise neighbour, Frank, at Tullamore who cut to the essence of farm loans by saying “Borrowing’s the easy bit! It’s the paying it back that’s hard.” That is a truth that can be forgotten as we scramble to find someone to lend us the money we need.
The services that farm debt consultants like Greg provide are unsuitable and uncomfortable for dishonest and predatory banks and include:
making banks write off debt caused by predatory dishonest lending practices,
making banks share the suffering for setting debt-traps from which farmers cannot escape,
persuading the banks to give farmers a repayment holiday when the season or prices go bad
helping farmers increase their profits with cheaper more suitable loans in the first place
working tirelessly to help farmers clear debts, recover title deeds, farm debt free and enjoy the farm lifestyle.

The one who pays the piper, always calls the tune.

Banks have the opposite priority to farm borrowers. What makes the banks rich, makes the farmers poor – interest and charges. When the farmer cannot pay interest the bank increases the interest rate. When the farmer can’t make a loan repayment the bank gives an overdraft at a higher rate to cover the payment. The loan grows and grows like a cut-and-come-again weed crop. This can continue until the farmer is sold up when it reaches 80% or 90% of the farm’s market value.

Government too has the opposite priority to farm borrowers. It seeks an ever-expanding economy where money moves around and around to end up in the government coffers through taxes each time it moves. Farmers borrow then spend the money with the rural store, which pays the wholesalers who pay the manufacturers who pay their staff who pay the supermarket etc, etc. Farmers become the pipe through which the stock and crop sale money flows out to the great unknown.

If the government or banks are paying the people advising you, recognise that there is a line they do not cross. Because the person doing the paying determine what advice is given.

Don’t fight bank alone because they do it every day

What Greg and GBAC do is get alongside the farmers to make as much of the farm revenue remain in the farm finances tank as possible so that the farmers can turn on the tap and spend it on themselves and the family whenever they want.

That is what decent farm debt consultants do. They work exclusively for the farmer and family more than anyone funded by the banks or government are ever likely to do. If they are any good they produce a huge return on the investment in their fees. Because they are serious, persistent and have a few secret weapons up their sleeves. Greg works for the farmers, not for the government or for the bank!

As farm debt consultants for many decades, with their own farming, accounting and business experience, the GBAC consultants don’t apologies for making billionaire banks write off dishonestly obtained debt to help farm families struggling with flood, fire and drought, price fluctuations and government policies. You can ring Greg on 0428 417 496 to see whether he might be able to help you borrow better or shed some of the debt.