The Nationals WA have welcomed the release of the Royal Commission into misconduct in the banking, superannuation and financial services industry, which outlines 76 key recommendations to reform the financial services industry.
A number of recommendations relate to the agricultural sector and will include the establishment of a National Farm Debt Mediation Scheme, and an extension to the time period in which farmers can seek compensation for alleged wrongdoing.
The Nationals WA Member for the Agricultural Region Colin de Grussa said the recommendations would seek to address the imbalanced relationship between the farming community and the banking sector.
“With many of the big banks reducing their regional footprint in recent years, farmers have found it very difficult to negotiate with managers who don’t seem to understand or care about the challenges of running a farming business,” Mr de Grussa said.
“The results of the banking Royal Commission unfortunately highlight a real disconnect between the banking industry and the agricultural sector.”
Mr de Grussa said a National Farm Debt Mediation Scheme was a welcome move and encouraged the Federal Government to take swift action to progress its introduction.
“Farm debt mediation schemes are managed differently in each State,” Mr de Grussa said. “A single, unified mediation scheme would give farmers more options when a loan is distressed.
“This scheme would require banks and creditors to offer independent mediation services before taking enforcement against farm machinery or property, and would prevent financial services from offering mediation simply as a rubber-stamp before repossession.”
Mr de Grussa also urged farmers to take advantage of the extra period for which they can seek compensation, with the Australian Financial Complaints Authority (AFCA) now allowing farmers to seek redress for incidents dating back to 1 January, 2008.
“Farmers who were wronged by the banks between 2008 and 2012 previously had no avenue for recompense, and I urge farmers in this situation to contact the AFCA,” he said.
Other recommendations of the banking Royal Commission include:
- Disallowing banks to charge default interest on loans secured by farm land in an area declared to be in drought or subject to natural disasters;
- Banks to ensure managers of distressed farm loans are experienced agricultural bankers; and
Receivers for farm loans to only be appointed as a last resort.