ACT Rural Communities spokesman Mark Cameron is welcoming the delivery of a banking inquiry with specific focus on rural banking.

Mr Cameron chairs the Primary Production committee which guided the formulation of the rural banking segment of the inquiry’s terms of reference, announced today.

“Finally, rural communities will have the chance to be heard in Wellington on rural banking practices,” says Mr Cameron.

“Farmers trying to get ahead with a bank loan say they’re increasingly being denied access to capital or being given loans only with stringent conditions attached, and interest rates significantly higher than urban loans. They look at the deals being given to other types of businesses and wonder if they’re getting a fair deal.

“These concerns led to a briefing of banks in front of the Primary Production committee, but we weren’t satisfied with the answers we received. We agreed more questions warranted answers, and that farmers themselves should be involved in the process.

“I hope MPs and the Government will pay close attention to the concerns raised by rural New Zealanders speaking to the inquiry, and consider what we as lawmakers can do to make it easier for farmers to access capital to invest in, and maximise the productive potential of, New Zealand's most valuable resource – the land.”

The Finance and Expenditure and Primary Production committees jointly developed the terms of reference for the inquiry. The committees will consider holding joint meetings to hear evidence from submitters relevant to rural banking and that the Primary Production Committee prepare a report on rural banking, to feed into the overall inquiry report on banking competition.

The inquiry will investigate the price of banking services, with a particular focus on business and rural lending products.

The inquiry also aims to:

• Determine how and to what extent the RBNZ’s capital requirements and credit risk models influence lending rates to agriculture and horticulture businesses.
• Ascertain whether the RBNZ’s approach to greenhouse gas emissions risk, including risk of government policy, has and is likely to result in further increases in lending rates to the agriculture and horticulture sectors.
• Ascertain whether bank environmental and sustainability policies have or are likely to result in further increases in lending rates to the agriculture and horticulture sectors.
• Ascertain whether there is adequate transparency on lending rates for rural, residential, and business lending.
• Access to banking services, including access to cash services, especially in rural areas.

New Zealanders can make a submission on the inquiry by 11.59pm on Wednesday, 25 September 2024.

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