Interest rate freeze on farmers ‘unconscionable’
06-February-2012
Warren Truss MP -
All eyes will be on the Reserve Bank of Australia (RBA) tomorrow for the first interest rate call of the year, with nervous home owners facing ever-rising cost-of-living pressures holding their breath.
But Australia’s farmers have all but given up hope of seeing RBA cuts reflected in agribusiness loans.
“Home owners are painfully aware that when interest rates go up the banks show remarkable dexterity in passing on the rise – in full and immediately, but when rates fall they are notoriously tardy in providing relief,” Leader of The Nationals Warren Truss explained today.
“But it’s even worse for Australian farmers. With attention on mortgage rates, agribusiness loans slip under the radar and the banks are getting away with not passing on cuts.
“Despite successive official rate cuts of .25% in November and December last year, farmers were shafted. Only Suncorp Agribusiness, to its credit, passed on the full .5% cut to its farm loan holders.
“But ANZ Agribusiness, Commonwealth Bank Agri, NAB Agri, Bananacoast Community Credit Union, Bendigo Bank and Westpac Agribusiness only passed on miserly partial cuts. Others, like BankSA Agribusiness, simply abandoned our farmers and hoped no one will notice that they failed to pass on any cut at all.
“Embattled farmers are struggling to recover from the physical, emotional and financial ravages of a decade of drought – the worst on record, which was brutally compounded by last summers’ worst floods on record that engulfed parts of all six states.
“Today, farmers in Queensland and northern NSW are again battling rising floodwaters. St George is facing their third record-breaking flood crisis in a year.
“People are drained. Gouging farmers, let alone under these most trying and desperate of circumstances, is unconscionable. While the focus is on home loans, interest rates for business and farm loans must equally be exposed.
“Mortgage stress, mounting cost-of-living pressures and languishing business and consumer confidence are biting all families, urban and rural. But it is especially galling for farmers that rate cuts designed to relieve these economic hardships are specifically denied to them.
“Tomorrow’s rate decision will be keenly watched, as will the banks’ eventual response should there be a cut in official rates. But I will also be watching what happens to the real rates paid on agribusiness loans. Light must be shed light on the agri-banking sector.
“For small businesses, including farmers, it is increasingly difficult to keep tabs on and compare loan rates and bank products. Unless the rate decisions of banks and non-bank financial institutions on these loans are required to be publicly reported, affected businesses will remain financially in the dark.”