Friday, 17 May 2024 15:04

Feds make case for rural bank lending probe

Written by  Sudesh Kissun
Federated Farmers vice president Richard McIntyre. Federated Farmers vice president Richard McIntyre.

Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.

He says Feds’ regular banking surveys shows that farmer satisfaction with banks is at a record low, and the number of farmers coming under undue pressure is at a record high.

“Those statistics are a damning indictment on the state of rural lending in New Zealand, but unfortunately the issue goes much deeper than that.

“New Zealand’s banking regulations are now some of the harshest and most stringent in the world, and that’s adding huge costs for rural borrowers.”

Federated Farmers is calling for an inquiry into rural bank lending. In a submission to the primary production select committee, farmers urged the Government to initiate an inquiry.

 McIntyre claims that new capital holding rules are now costing farmers more each year than He Waka Eke Noa was ever going to.

“It’s estimated these rules add between 0.5% and 1.2% to rural interest rates and cost farmers an eye-watering $310m to $740m each year.

“For comparison, He Waka Eke Noa was forecast to levy farmers around $255m each year.”

McIntyre hopes that the Government “have enough backbone to stand up to them and make it happen”.

Those rules are supposed to protect our banking system against a one in 200-year shock, but the question does need to be asked: could the medicine be worse than the disease?

You can trust that Federated Farmers have your back when it comes to banking issues, and we’ll keep fighting hard for this inquiry

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