Farmer help: Minister praises bank with 'social conscience'
FARMERS facing drought are being offered greater financial flexibility, with the country's largest agricultural lender relaxing its rules around repaying loans.
Agriculture Minister David Littleproud is urging others to follow suit, encouraging farmers to "vote with their wallets" and tell banks who refuse to "bugger off".
Farm management deposits allow farmers to remove money from their taxable income during good years to later use during tough times.
The National Australia Bank has announced it will allow farmers to offset these deposits against their loans.
The NAB will also no longer charge penalty interest payments on farmers who fall into debt on their loans.
Rural Bank has until now been the only lender to allow the FMD offset since laws were changed to allow the practice in 2016.
One in three farmers bank with NAB, meaning the other big banks will face increased pressure to join them in making the change.
"This is an investment in agriculture's future and farmers can now vote with their wallets. I hope other Aussie banks follow NAB's lead and get on board," Mr Littleproud said todat.
"If you're a farmer whose bank doesn't offer an FMD offset, you can tell them to bugger off because there are banks now which do."
Mr Littleproud tore shreds off the foreign-owned Rabo bank for "turning up its nose" at Australian farmers last week by ruling out an FMD offset product.
"You have to ask how serious that bank is about agriculture in Australia. It's fantastic an Aussie owned bank has shown a social conscience and led from the front," the minister said.
Mr Littleproud also wants other banks to follow NAB on removing penalty interest payments for farmers in drought, urging lenders to reassess the practice more broadly.
"I don't think the charge truly reflects the cost to the bank. It's really a kick in the guts when someone's down, which isn't the Australian way," he said.