For Justice and good government
For Justice and good government


28 August 2020
Unregulated banks Immoral says RBA member

RBA board member Ian Harper has raised the issue of bank regulation and immoral banking practices.

Bank directors and executives are robbing and tricking customers to make multi-billion dollar profits and pay packets over 20 times what MPs earn to run the country. They “own” APRA & AFCA.  ASIC & ACCC are no match for them. Financial counsellors can’t detect dishonesty and work closely with banks.

Most banks are common moneylenders like Shylock of the Merchant of Venice, with no moral scruples whatsoever.

 GBAC Advisory Pty Ltd was established to help customers see the traps before they fall into them and get out if they are already trapped.

Contact us if you need help.

17 August 2020

Farm stocking rates and profit

Farming wisdom says costs are mostly fixed, so run as many stock as possible and it will produce the highest profits. Government calls that “increasing productivity”.  I did that in my early days but then changed tack after listening to others and applying my Chartered Accountancy brain to it. Accountants are most interested in the bottom line – the profits you have to spend  in return for running your farm.

The problem is that farmers compete with each other in the saleyards and many other aspects of farming, including stock carried. The more stock they run the more it does in fact cost them to run the farm  AND the more stock they turn off. That means more meat on the market. As the market is reasonably static, that causes prices to fall and profits fall with them.

I am interested in two things – the wellbeing of my stock and profit, or the return on my huge investment in the farm. So I run well under the standard stocking rate. Perhaps 60% - 80%. Many costs do in fact fall, perhaps because the place does not run at such a frantic pace and there is not the same pressure.

Although we could store over 20,000 small bales of hay and used to do so, feeding out through winter, I changed that after one of Terrey McKosker’s “Grazing for profit” courses. I sold our three tractors, stopped growing Lucerne, stopped storing hay or fuel of any kind and decided to run only the number of cattle that could do “smorgasbord” or grazing only.

In one big move, I cut turnover by 50% and costs by 90%. It made good profit and was much more enjoyable to run the farm.

I don’t say it would work for you but as you recover from “drought flood and fire” you could try selling more stock as you reach 80% of what you would normally carry. By carrying more stock we keep more cash profit locked up , mostly in breeders. Sounds like good conservative policy. However, because it does not produce cash from the sale of those extra breeders or others held, we might have to borrow from the bank or do without the money. The most destructive factor in farming is not drought, flood or fire, but debt.  Interest and charges are outrageous but worse it is like getting stuck in a bog. The harder you try the deeper in debt you get. A serious bad season or price collapse can turn manageable debt into a long term financial disaster. Our most satisfying and productive work  in GBAC is rescuing farmers from the bog of bank debt. Sometimes we use a financial rope and sometimes a “snatch’em strap”. Either way they are pretty happy afterwards.

If those extra breeders and their progeny held back to build numbers have to be sold in drought conditions, which often happens, then the prices are pretty ordinary compared to if they are sold at the end of a wide-spread re-building phase or even in a normal season. So the same cash does not flow in.

When you do try these sort of exercises to see the impact on profit, examine your financial statements with someone who can analysed them properly for you to see what the result was. Figures can be very misleading and plenty of farmers are misled more than they try to mislead the tax office. Get a financial analyst who knows both accounting and farming to work on what your accountant prepared for the ATO and see what surfaces. It can be very revealing as most of our clients discover.

Farmers who want to make good profits have to focus on profitability all the time. Many farmers focus on the appearance of their stock, homestead, yards, vehicles and fences, which has just the opposite effect on profit. Profit comes from maximum income with minimum expenditure. There is a sweet spot to deliver good profits and pleasant farming. It takes some finding.

15 July 2020
Farms and family businesses more vulnerable now than ever!  Really?

 Rule No 1 -   We each have prime responsibility for protecting our own farms and businesses, so others can help us more easily.
Look around! Those farmers and business owners who do so are almost always doing better than those who don’t.

The voices of those most vulnerable to our teetering economy, weather & health, can help them protect themselves. Yet they often suffer in silence. Why?

They may not understand the enormous power for good that democracy gives directly to each of them personally. That can give them the means, mechanism, systems and services to better protect their businesses and farms.

GBAC has for over 50 years, given farmers and family business owners assistance including access to undreamed-of power to protect their farms and businesses via the parliament they elect and pay for that very purpose. This particularly applies when debt is involved.

If you do understand this, please encourage those you know to contact me or phone 0428 417 496 to protect their farms and businesses against the certain financial storm that is heading our way.

Greg Bloomfield Retired FCA, CPA, FCIS, FID

Farm & Business Consultant, farmer and family business owner

11 June 2020
Back to basics banking strategy for nab sends a warning to borrowers

New Nab chief Ross McEwan is going to teach his bankers “how to be bankers”, echoing the Royal Commission finding of “greed, misconduct, and a minefield of incompetence and blunders in the industry”, according to Sydney Morning Herald journalist Elizabeth Knight.

His lessons will most assuredly aimed to increase bank profits and every dollar the bank earns comes out of the pocket of a customer.

If bankers need to be taught how to make money out of lending, borrowers need to become “Better Borrowers” too, if they hope to reap more financial benefit from their future loan facilities.

Voters Network is establishing a Better Bank Borrowing Taskforce to lobby for borrowers.

FairGO already offers mistreated bank borrowers a direct Votergram line to every federal MP to raise their grievances instead of wasting time with the industry owned Australian Financial Service Authority.

GBAC will continue to work with bank borrowers to negotiate much fairer loan outcomes than generally flow to them without such assistance.

Join Voters Network for better government protection against bank profiteering, bullying or abuse.

Send one of the FairGO Voterlobby’s Votergrams to MPs seeking investigation of any unfair practices by your bank in connection with your loan facilities.

Consult Greg or Pat at GBAC for the best possible outcome when your loan facilities deteriorate to unhelpful bank correspondence, phone calls or legal action.

19 May 2020

The Profit and Loss of Politics
From Chartered Accountancy I moved to democracy.
Many individuals, businesses and farms are suffering enormously from the triple whammy of drought, bushfires and corona virus which is predicted to be followed by the recession or depression that was already on the way before the virus struck.
One of the best ways out of this mess is to work with groups like the FairGO Voterlobby and Australian Voters Network to inform all Members of Parliament of how you are affected and what course of action is best likely to help you and the nation move forward profitably.
Losses are sometimes inevitable, but swift action can reduce them.  GBAC has been helping Australians do that since 1971. We have advised people in the cities and rural areas, even the most remote areas in Australia, on how to earn more money and overcome the challenges of overwhelming debt.
You don’t have to suffer in silence or alone. Often some outside assistance works well to turn the tide in your favour. When we are in the middle of a crisis we cannot know all the answers. Because we have done it for so long, in so many different situations and have run our own businesses and farms, we are ideally placed to help others.
Politicians and government policies can affect your profits. So can banks, debts and business decisions. We have a very strong commitment toward assisting our clients.
Don't be put off by the doom and gloom headlines every day. They just attract readers. Many of you will be in good posiitons that just need a bit of improving.

Feel free to call us any time. It is a very rare problem that does not have several possible solutions.

12 May 2020

Bank bonanza may bury borrowers
For bankers, the corona virus has been a blessed relief. The banking Royal Commission has faded away, eclipsed by an escalating disaster of drought, bushfires, business shutdowns and massive job losses.
The loan bonanza for bankers may end up burying borrowers in debt as a year or two from now they struggle to clear it. GBAC can help with managing debt as well as challenges with governments. Don’t wait until it is too late. Bankers want you to succeed too, but they often do not give you the loan support you need. Sometimes financial counsellors can, but often they can’t. We can.

Buy now pay later is booming because most buyers will not be able pay on time and will be charged big fees that earn super profits. Personal financial security may come from adopting as much as possible a policy of save now buy later.
Debt is going to cripple family businesses and farms unless the borrowers do some very serious planning. GBAC has some well qualified and experienced debt negotiators available who can help members borrow better and negotiate payouts that pay off for borrowers.

The world has changed and many richer people have stopped spending. That is how they get rich. It may well pay others to follow that lead. Life is going to get tough. The corona virus has only added to an economic disaster that has been on the way for years, as we have constantly forecast.
GBAC is here to help borrowers all over Australia solve loan problems. 

Our vision is not unlike that of Rev John Flynn who set up the Flying Doctor Service with the pedal radio developed by the brilliant Alf Traeger, to spread a mantle of safety over our inland long ago.
GBAC has been set up using modern IT systems instead of a pedal radio but our objective and motivation is the same – to helpbank borrowers when they need help, no matter who and where they are in Australia.
If you see the merit in that, please pass this information to as many as you can. Together we win, whereas on your own you battle the “banking system” that is biased against borrowers, particulalry seasonal weather-dependent farmers.

5 May 2020
Debt disaster descending on rural Australia

There is a rural debt disaster heading Australia’s way so “Be Prepared”, as Lord Robert Baden Powell said.

The first step that all indebted farmers and rural businesses should take is to make an appointment with their local Rural Financial Counsellor to negotiate the longest term finance on the best terms possible with their bank, to make their business as profitable as possible by cutting all unnecessary expenses  and doing everything they can to get income back on track after the prolonged drought, floods and fires that have done so much damage.

If the RFC cannot assist you or the bank is already taking recovery action, you may wish to give us a call at and learn why it is sometimes necessary to take the whip to the bank. We can also explain why few loan & debt consultants have the leverage with the banks that we have.

Don’t wait ‘til it’s too late. The best loan fix is the early fix, before problems arise.

Greg Bloomfield, 0428 417 496

1 May 2020

Debt Negotiator Best for Borrowers
 A debt negotiator’s claim in Sydney Morning Herald on May 1, to be 1st in Australia (in 2001) is false. GBAC & Moneygrams began negotiating on bank loan applications and write-offs in 1987. Last year one major bank wrote off 100% of a large mortgage loan for us. We have arranged debt write offs, better loans and re-finance in every state and territory in Australia for 30+ years.

Nobody has the same negotiating tools, experience or solutions as GBAC backed by FairGO and the Australian Voters Network does. We don’t do this to earn a living. We do it because we care deeply that Australians are treated fairly by their governments and their financial institutions.

Most borrowers simply do not have the time or skills to do this negotiating and few negotiators care enough to put their customers first before their own fees. We negotiate very hard with the banks to get a good deal for borrowers. We would not have been attracting debt laden borrowers for over 30 years if we could not do the job well.

But it also pays to borrow well in the first place and without professional assistance that is almost impossible. Then management of your loan is very important throughout its term. This is where many borrowers, particularly businesses and farms, come unstuck. It is not expensive to do, but is great protection against foreclosure.

28 April 2020

Working together when times are tough!

In difficult times we work better together. We toughen up, become more resilient & less self-centred.
We are certainly in difficult times now and there are more difficult times around the corner. Banks are making massive provisions for bad debts. That means they are going to write off billions of dollars in loans.
Does that mean they will be throwing money out of the office windows to be picked up by those in need. Hardly!

Before a bank writes off any debt it will give the borrower a good working over. The bank will ask those who fall behind on payments to cough up, or else. It will threaten for a while then get serious. Then banks will take the borrowers’ homes, businesses, shares, investments or farms and those people may lose everything they have worked so hard to build up.
There will be a lot of blood sweat and tears before any bank writes off much money, let alone a Billion dollars. The problem is that when that happens, so many properties can come onto the market that their values fall. Nab predicted yesterday perhaps as far as 30%. It could go further. Values have certainly risen fast.

So if you are a borrower feeling the pressure of debt, what do you do? As well as running the FairGO Voterlobby and Australian Voters Network, I also run a debt consultancy. You see, I am pretty keen on people being treated fairly and I know that a lot of borrowers get treated very badly when the loan goes bad.

It won’t cost you a cent to phone me on 0428 417 496 or email me for a brief chat. I believe that the earlier you start to deal with a problem the easier it is to solve. There are many ways for borrowers to come out of their loans doing well, but it takes some careful planning and management. Many borrowers have plenty of other skills but debt management is not one of them. We are happy to tell you how to do it or do it for you. We spend a lot of our time negotiating with banks for borrowers and they usually come out a lot better than they expected.

Feel free to ring. The firm’s initials are based on my name, but many would agree that Good Borrowing Advice Counts with a lot of debts. Ring in business hours. Put “loans” in the subject line of your email so I can give it priority.

22 April 2020
Massive “No Value” Mortgage Insurance Fraud by BIG
The article in the Sydney Morning Herald Money section today by Nina Hendy touched on but did not explain the greatest financial services fraud operated in Australia today by banks and insurance companies.

GBAC took on one bank & insurance company on behalf of one borrower who asked for help, and won. The borrower walked away without repaying the debt. We will take them on for you any time.

Here is how the bank run scam works. When lending money for a home loan the Big Bank requires the borrower to pay a premium, say $15,000 to an insurance company for Mortgage Insurance.  The bank may actually own the mortgage insurance company. The borrower pays the premium.  Years later through some disaster, the borrower defaults. The bank claims on the mortgage insurance and recovers the whole debt from the insurance company. In doing so it assigns its rights under the mortgage loan to the insurance company. The insurance company then owns the debt, the mortgage and the title deeds to the home. The insurance company then sues the borrower to repay the loan back to it in full orr takes and sells the home.

Simple. Better than tax fraud or armed robbery. The borrower paid the premium but did not get insurance cover. The insurance company received the $15,000 premium but recovered everything it paid out from the borrower who paid the premium. These guys are clever. You have to hand it to them.

The sensible thing would be borrower insurance where the borrower paid the premium and received the cover with which they paid out the bank loan. But such a plan would never allow bank or insurance bosses to earn $30,000 a day. What else but crime pays that sort of money?

 The Federal government in 1965 established the Housing Loans Insurance Corporation to provide the home loan insurance. Run by the government it was honest because it worked for the Australian people. My wife and I were lucky enough to borrow 95% of our home price that way. But when banks and insurance companies were deregulated and privatised by politicians to reward their political donors, honesty went out the window and the profiteers who took over banking and insurance, robbed everyone they could.

This is like car insurance companies paying your claim for the car being written off, then suing you to recover the money. You would get no value from your policy. LMI is like that!

If you or anyone you know is caught up in this shoddy Lender’s Mortgage Insurance fraud, please ask them to contact GBAC for assistance.  Australians should not tolerate this fraud that is primarily aimed at young Australians with young families. These financial fraudsters should be gaoled. But at least you can fight their claim on their “No Value” insurance policy. There is every chance of you walking away too instead of paying a premium for no value.

Don’t be robbed by The BIG-  Bank and Insurance Gang.

21 April 2020

Businesses and farms are bleeding money. Do the following help or hinder them?

Tracking app
People power
Politicians robbing voters
Bankers and the virus

Could it be a tracking app trap?
Many Australians are tracked daily via Google and are happy about it. So what’s the worry about the coronavirus tracking app?
Some reviewer said “I don’t see a problem with it. Police can’t get the information”.
She could not guarantee that? New laws can be passed any time. Police are not the only problem, although recent raids on homes of journalists to prevent the public knowing what government has done are a worry. A more dictatorial politician could have been elected PM and given the tracking app control to ASIO, already planning to spy on Australians at home, according to media reports.
Any government can make legal tomorrow what is illegal today. No present politician or bureaucrat can forecast what future ones will do.
Stopping corona virus is vital but we have done very well to date without giving government the right to record, store and analyse where we go, who we visit, meet or phone. Massive amounts of Australians’ private data held by government have already been leaked, stolen, sold or dumped.
Voters need to think this through and let politicians know how they feel.

People power is yours, Right Now!- individual or organisational
Members of Parliament work for you and mostly they do a very good job. But they do heed those who tell them what they want done. Some people just suffer in silence, but that is not necessary or desirable.
Votergrams, the FairGO Voterlobby & the Australian Voters Network exist for your benefit so that you are never powerless in Australia. They exist to give you unprecedented power to influence the future of our society. As the song goes “You don’t have to suffer in silence”. Have your say in an effective way!!
But if you are ever victimised by anyone, Votergrams to every MP in the relevant parliament will most likely put a stop to it.

NSW MPs plan to sell of our assets to pay for future ones!!
Financially incompetent NSW govt ministers promote political fraud - selling off infrastructure already paid for and owned by voters, in order to fund future infrastructure for future users. That is theft and the exact opposite of “user pays” –instead those who have worked and saved and paid taxes pay, but use it less.
New public infrastructure should be financed by loans, Govt bonds, superannuation or bankers.  The people who will use it should service and repay the loans through taxes, duties and charges as they use the assets. Don’t let MPs deplete the assets we worked so hard for, to placate lazy incompetent  ministers & enrich private profiteers at voters’ expense.

Bankers and the virus
Should bankers, as well as allowing the 6 month P & I holiday, extend it to 12 months in some cases and waive 50% of the interest deferred, otherwise borrowers, including landlords & tenants, carry all the actual losses, while banks just defer their revenue stream and earn compound interest on it.

31 March 2020
Coronavirus health and money crisis

Those who have always saved money and borrowed little will have missed out on some pleasures they could not afford, but they will have savings to help tide them over much of the present crisis.
Those who have spent, not what they have saved, but by borrowing in anticipation of what they will earn in future, may have come unstuck. Foretelling the future is a risky business. Happy to help them get the finance they need in a way that does not mortgage their soul for life.
While some Australians struggle on the median wage of about $50,000 pa, some business executives and owners earn up to 200 times that and public companies earn billions after paying very little tax. A few are very generous with their money. Most are just sucking cash out of the economy like giant vacuum cleaners for their own use. Many are sending it offshore to avoid tax, laundering it through international call centres, banks, accountants and lawyers, thanks to generous politicians who pass the laws that allow them to do so.
Saving instead of borrowing is probably the most important cure. It is being in debt that creates a crisis out of any loss of income.
Using the credit card sparingly but to get through the crisis then paying it off. Using cash or paying the full card balance off every month is the wisest course of action to avoid risk.
Looking before you leap into a loan, with a good loan consultant like  my GBAC at your side, is probably a good move. Know whether or not you can meet the loan terms. They all have to be paid back in the end.
Expert loan management enables the borrower instead of the bank to benefit most.
Poorer people than the ultra-rich control the vast majority of votes, so for them, taking a greater interest in government could earn them a lot more money than working two jobs.
That is one reason why, as well as helping small business and farmers get a fair go from their banks through GBAC, I run the FairGO Voterlobby and the Australian Voters Network. Free enterprise capitalism is a great system, but it does not have to involve greed and self-indulgence or political bias toward the donors who finance election campaigns. Voters own the votes. By wise use of votes they can vastly improve their lives.
Borrowing more from banks is a two edged sword. Today it has restored business life to normal. Tomorrow it might cut off your head.
 The government, led by the Feds, have done a great thing by moving to stimulate the economy and put money into the hands of those worst affected. That is a great role for government. Of course later there will be a massive debt for us to all pay off, but if we work hard and share the tax load fairly we can all recover well. Let’s hope the strong take the weak with them. Take time if you can to thank your MP, because they will all be working hard on this corona-crisis. Ring your local MP or send a Votergram to every one of them.
The way to pay of business debt is to work hard, ensure profitability and schedule debt repayment as a top priority.
GBAC has played a strong role for over 30 years by negotiating debt repayment deals with banks on behalf of borrowers. There are many times when a bank will accept less than face value for a debt – always when it works well for the bank. GBAC has developed special skills in that area. A few months ago a bank wrote off the whole debt which was a great deal of money. Banks can be very decent when approached properly and they do have a bit of lee-way because they are so profitable.
People do deserve fair treatment, even from moneylenders. Make sure you get it.
Part of the cure is to take control of your finances and never let them go. Control the lender instead of letting the lender control you. That means understanding and honouring your own obligations before accepting any loan.

28 March 2020

Tough times for small businesses and even tougher times for farmers and regional businesses that have endured drought, fire and flood and now
corona virus.

Rarely have MPs so much needed to hear from voters and voters so much needed to hear from voters. Login or join then post your questions or suggestions for politicians on . They will go to all federal and state MPs on Monday by Votergram. 

Don't let your business collapse without trying to fix it!!

23 March 2020

Better interest rates

Jessica Irvine wrote over the weekend  in the Sun Herald that people could save tens of thousands of dollars over the life of their loans. She is absolutely right. That is why we offer “Bank Bids” to assist borrowers. The comparison sites to not show the very best interest rates a lender will give you. That only comes when they have briefly assessed your security and ability to service and repay the debt. Only then can you do your own comparison of what is on offer and negotiate fr the best possible rate by playing one borrower off against the other.
Sure it costs a bit of time and a small fee but when tens of thousands of dollars are at stake it is surely worth it. You get out of loans what you put into them by way of negotiations and management.
Contact us on 0428 417 496 when you want the best interest rates and loan terms, particularly if it is a small business loan

13 March 202010 Handy hints for handling the corona crisis

  1. Tighten your purse strings because it may lead to a recession wiping out jobs, house prices, shares and government funds.
  2. Just putting money into your bank account makes it available for someone else to use.
  3. Do everything you can to help your employer/ employees keep afloat.
  4. If you lose work, quickly look for anything else you can do to produce money.
  5. Get to Centrelink fast, as it will be overwhelmed.
  6. Look for opportunities to buy or invest cheaply but know that prices may fall further.
  7. If you have a loan, phone your lender and ask what you do if you are unable to make a payment on time. Don’t avoid them. That really makes them mad! Talk to them.
  8. Don’t despair about debt. If you cannot get the sympathy you need, give us a call.
  9. If you have something you want government to do, give us a call and we will tell you how to persuade politicians to get it done.

Take comfort that nothing lasts, good or bad. This crisis will pass. Try to sit it out.

11 March 2020
Rodeo Riding and Recession have lots in common. Try to ride it without coming a cropper

If you have ever ridden a touchy horse or a bike over rough country while mustering or worse a bull in a rodeo, that might prepare you for what is ahead on the money side of farming and business. You need to think carefully and speak to your own advisers about what to do.

Wise advice from my grandmother was “listen to what everybody suggests, think about it, then decide and do what you think is best.”

It would be staggering if we did not have a recession. People, businesses and governments have solved previous financial crises by borrowing more. That just makes the lives of the borrowers more precarious and more of their hard earned money goes to the moneylenders, who make billions of dollars a year profit and pay executives up to $40,000 a day. Yes a DAY!

If that continues, debt approaches the full market value of the assets securing the loan, particularly if values collapse, so the loans are called in and the farmers lose their farms and business owners lose their businesses and maybe their homes.
As a retired Chartered Accountant, CPA and a 4th generation farmer I am conservative about money. I have seen too many businesses and farms fail to not be. My hints are:

Clear debt as fast as possible. Don’t be lured by low interest rates. That is a chance to pay loans, not to borrow more. The interest rate is low because people will not borrow at any higher rates because they expect recession. It is banks meeting the market. Debt always puts you at risk and there are enough risks already in farming and family businesses, like drought, fires, floods and viruses, to say nothing of government policy.

Cut spending to only the very most essential items to run the farm or business. Turn surplus assets or stock into cash.

Cut personal spending to essentials too.

If your farm is starting to look good again thanks to rain, take lots of photos so that if you have to sell in a bad season you can show the buyers what it looks like in good times and you also have good photos to show lenders if you have to refinance or borrow again in a bad season.

Talk to your lenders, be they banks or other bodies. Lenders get nervous about borrowers they are not talking to. Pick up the phone and ring them to explain your situation and if necessary ask for extra time to pay. Have a coffee with them or ask them over for a cuppa.

Remember that if they give you extra time that is not provided in your loan agreement then technically you have breached the loan terms and probably all of the debt can be called in. This can be used against you later if you fall behind. Don’t let that stop you asking for an extension of time. Just be aware of it.

I remember going to a bank with a client who swore he had never been late paying his loan. When I repeated that to the bank manager, he gave me a long list of all the times the client had been late with payments and the bank had allowed it, saying “Your client has been late paying 20 times in the last 3 years. We are tired of all those breaches of the loan contract."

If you do not want to deal with the lender give us a call at GBAC and we will handle it for you. We have a couple of decades of experience in dealing with moneylenders.

26 February 2020

Australian Rural Financial Counsellors – your first stop shop on rural finances

Australian farmers and rural business owners have free access to one of the world’s best rural financial counselling services. Over the period I have been farming, leading one of the NSWF branches and consulting farmers nation-wide, I have had a lot to do with Rural Financial Counsellors.
Nobody can better inform rural Australians of their financial options than a Rural Financial Counsellor.  This is important because there is a wide range of financial support services that can be most helpful to farmers and rural business owners.

A difficulty of working in isolation, which is pretty much what farming is about, is keeping up with the various support measures government has on offer to ensure that farming is viable in the face of our fire, flood and drought environment and the ever-changing global food regulations. Rural Financial Counsellors are also able to keep rural families informed about financial initiatives that affect the non-farming non-business side of their lives.

In many cases those with vast experience of cropping and/or livestock operations do not have a lot of expertise in farm finances. Yet finances are integral to success. Farms are like sponges in the amounts of money they can absorb. Farmers need to be able to arrange their farm finances so that they make substantial profits in exchange for the huge investment that a farm involves and the very long hours they work. The financial impact of every aspect of farming needs to be carefully examined to ensure that a farm is profitable enough to put away money from good years to tide the place over the bad years. Because rural businesses depend a lot on farm income, the same applies to them to some extent.

As rough guide I have always counted on 3 good years, 3 bad years and 4 mediocre years in every decade. Debt dramatically raises the stakes as profits are used to repay it straight out of net profit without any tax deduction. Frequently farmers and other small business owners  see their financial statements as only of use in lodging tax returns, whereas they are as important as soil moisture measurements, micron or muscling. They tell the story on which wealth will either be accumulated or lost. Figures are not easy for non-accountants, but a Rural Financial Counsellor will be able to run the farmers and business operators through the figures to make them understandable.

Make sure you know your Rural Financial Counsellor well before you need their help in an emergency.

4 February 2020

How to make money and enjoy the lifestyle out of buying a farm.

A farm couple were buying a large farm in the Central West of NSW. It had a timber homestead with a 3 metre verandah all around with a modern kitchen. It also had a second smaller house in which the vendors son and daughter-in-law had lived before buying their own place in another state.
Fences were okay but not brilliant – stock proof. The yards looked good. There were substantial grain silos and good sized shed plus some excellent dams - 5,000 and 10,000 Cubic metres. It was about a quarter timbered, half good grazing country with the right sort of trees growing and a nice modern 4 stand shearing shed.

Buying a business
They spent a day driving around the property with and without the present owner then came back to the house late afternoon. They were very enthusiastic about the place and were pretty interested.

Over a cup of tea the lady asked if they could see the last 5 years tax returns and assessments. The vendor was staggered. “What for”, he asked. “They are private!”
“Well”, the guy who was buying joined in “we are not just buying a block of land. We are buying a business. It is just as important to know how much money the place earns in wool and sheep sales and what it costs to run, as it is to check out the dams, yards and fences. We would keep the information completely confidential.”
The owner then went of, somewhat reluctantly and came back with tax returns. The prospective buyers had particularly asked for tax assessments so he had them too. When the buyer had looked over them he asked “Would you mind if I gave these to my farm financial consultant as I am not so good on figures myself? He is in Sydney, so nobody local will see them.”
“Go your hardest.” said the owner.  “I’m the same as you with figures.”
Next day, back home in a rural city, the couple who had inspected the place scanned and sent the financial statements and tax assessments to their consultant in Sydney.

Doing the sums
The consultant, a qualified accountant and experienced farmer himself, looked over the figures and came back with these comments:

“The figures show 5 straight years of tax losses, so that is not too impressive, but the owners will say those are just “paper losses” so I have to look a bit deeper.
What stock is he running and what age are they? Some of his profits are probably  in his ewes at a lot more money than they appear in the books.
When you looked in the shed did you see much fencing material or fuel?  The expenses could include buying stuff in June to get a tax deduction for what will be used next year.
There is depreciation on 2 tractors and 2 vehicles. One of the vehicles may just be personal use but I suspect it is used at least half for the farm. Electricity I suspect is mainly private and probably part of fuel is private, but you could not run the place without them.
Looking through all of the expenses they look fairly normal to me.
How new are the fences and yards? It is possible that money has been spent in these 5 years on fences and yards that will last decades.
There is interest and borrowing charges and a debt has been reduced, plus consultants’ fees that probably relate to it.”

The buyers responded that there was not much fuel or fencing material in the shed & maybe 10% of the fencing was fairly new, there was a silo of oats and that the yards have a new race but that was about all. The consultant gave them a list of expenses and suggested they go back and talk with the vendors about how likely it was that expenses could be cut substantially to turn the losses into profits.

A Profitable Purchase
On the basis of what they had learned the buyers negotiated the sale price down by a quarter and by paying half in cash, the vendor gave them 8 years interest free vendor finance payable annually out of the wool & sheep sales, in return for him continuing to live in the main house until the price was paid in full. They came up with a budget for a modest profit in the first year, half as much again in the second year and a good profit in the 3rd year. It would be lean going but they reckoned they could pay off the balance of the purchase price within the 8 years and move from the smaller house into the main house then.

Moral - The best farm lifestyle is profitable and debt-free
It is good sense to buy any farm at or below market price with some interest-free vendor finance. But it is absolutely essential to buy a farm that is going to be profitable. Otherwise debt escalates. That means reviewing past tax returns and verifying them with assessments. Tax assessments are the one document that cannot easily be rigged. Tax returns and financial statements can be completely  false, just typed up for the unsuspecting buyer.  The key to success is having a skilled consultant draw up realistic budgets on the basis that in each decade there might be 3 good years, 3 bad years and 4 moderate years. In the debt repayment period it is best to avoid all capital expenditure so that all profit goes to reduce debt. There is nothing quite as enjoyable as farming debt-free and earning good profits at the same time.

9 January 2020

Beyond the drought and bushfires....
“I love a sunburnt country... of droughts and flooding rains....
For flood and fire and famine, she pays us back threefold.”

So wrote our legendary poet Dorothea Mackellar, born in 1885. Her poem was published in 1908 when she was just 23 years old. What a beautiful legacy she left us.  But it also reveals the challenging features of life in Australia. How will it pay you back threefold?

When the music stops
 “Nothing lasts, good or bad. It is good to remember when we think the good times will roll on forever.  Be Prepared.

Debt became so great a problem for Australian family businesses and farms after bank de-regulation and privatisation, that I converted my Chartered Accountancy practice into a debt solutions consultancy. It is far more satisfying than “The round eternal of the cashbook and the journal”.
It has been possible to bring the most aggressive and threatening bankers from every major bank to see sense and negotiate a lower payout that at first appeared reasonable, when we were able to clearly explain the debt circumstances and likely consequences of them not doing so.
We never threaten to take banks to court. That is one forum in which banks are almost certain to win because they have vast amounts of money to pay the cleverest lawyers. We have developed our own unique strategies and they work extremely well for borrowers.

Recovery from the lengthy and unprecedented drought and bushfires that descended on Australians in 2018 and 2019 and have built to a crescendo of flame and smoke in early 2020, will be difficult and lengthy. That it comes on top of what for some is overwhelming debt and a crumbling economy  is perhaps the last straw, the one that might “break the camel’s back”. Don’t let it do that to you!

Meanwhile the moneylenders in our major banks are basking in record profits gouged from their customers. They have made billions of dollars that bank customers have been charged over and above the cost of providing those services – or for no service at all. This is the price Australians have paid for being sold out by their MPs who first de-regulated banks so they could do what they liked then sold all the government ones to private profiteers.

There are some key steps Ibusiness owners and farmers could take to recovery. But everyone’s situation is different according to their age, skills, source of income, debt level and assets, particularly cash. Do not follow these blindly. Consider them carefully and find a good professional with whom to discuss them.  Then use or modify the ones that might help you:

  • Take control! Don’t trust anyone to make the decisions for you. Make them yourself after gathering all the advice you can and weighing up the alternatives..
  • Do everything possible to generate income without being limited to what you normally do.
  • The government will encourage you to spend which exposes you to risk. Leave boosting the economy to the government that has  let it deteriorate.
  • If you have suffered insurable damage consider engaging an insurance assessor to tell you what you should claim.
  • Check out what fire and drought benefits are available from the governments if you are suffering losses and claim whatever you are eligible for.
  • Remember that easy interest-only loans for a few years have to be repaid sometime and may have to be refinanced at high interest rates eventually. “Borrowers beware!”
  • If you have existing unmanageable  loans & want some suggestions give us a call.
  • Now is the time to improve your relationship with your bankers. We can help you do that if you wish.
  • Prepare budgets for at least a few months ahead. Compare actual results each month to them and examine the differences. That enables you to constantly improve profitability and cashflow. If you are unsure how to do that ring and we will show you how.

We’ve been through enough troubles ourselves to have a good idea of how hard it is. If you feel a chat might help you bounce around some ideas and clarify your thoughts, give us a call.

Planning your recovery with care is the best way to make it happen.


Anyone is welcome to phone us on 02 9988 3312  oe 0428 417 496 for a chat. We have been advising borrowrs for decades with great success .