Banks urged to go easy on farmers
Deputy Prime Minister John Anderson is urging banks to be sympathetic to farmers who are in financial difficulties due to the drought. Following forecasts that farm incomes will slump 40 per cent over the next year, Mr Anderson said he's pushing for an agreement from banks that they'll go easy on farmers. The banks need to be flexible, willing to restructure loans, and not look for unreasonable margins and charges, he said.
Mr Anderson added that he has already spoken to some banks about the issue, which is stretching beyond farmers to rural towns such as Coonamble in his own electorate. That town alone will be missing a $35-$40 million wheat cheque, he stated.
The Big Four banks said yesterday that they're sympathetic and willing to be flexible. Westpac CEO David Morgan said he hadn't yet spoken with Mr Anderson but his bank has not yet been forced to sell up any farms because of the drought. And where farms are viable we are looking to see them through the tough times, he said.
Measures needed by farmers during droughts include conversions of loans to interest-only payments, loan restructuring to reduce payments, the waiving of standard fees related to restructuring, and freezing interest rate margins associated with worsening financial performance.