Queensland beef producers who were put through the financial wringer have welcomed Justice Kenneth Hayne’s scathing assessment of Australia's banks and their treatment of rural customers.
Winton producer Charlie Phillott was evicted from Carisbrooke Station in March 2014 after ANZ deemed the property an “unviable risk”, despite the Phillotts never missing a mortgage payment.
ANZ returned the property to Charlie, then 81, in 2015 after the family fought the decision, with the bank’s chief executive issuing a personal apology.
The Phillotts’ case came to light when it was heard by the Banking Royal Commission in June last year, with ANZ head of lending services Benjamin Steinberg accepting the bank had breached certain clauses of the Banking Code of Practice.
On Monday Justice Hayne released his highly-anticipated final report into Australia’s finance sector, outlining a number of reforms to improve the way banks treat rural customers.
These included topics such as land valuations, distressed agricultural loans, default interest charges and farm debt mediation.
Mr Phillott said he was thankful of Justice Hayne’s work, but that it was now up to the federal government to see it through.
“If they don’t sort that out, the banks are free to do it all again,” he said.
“They have ruined businesses that they had no right to.
“Obviously I’m very thankful that Justice Hayne has done what he has done. I think it’s up to the government now to try and get some justice.”
Mr Phillott also called for financial compensation for rural customers that banks had “knowingly forced into hardship”.
Some of the specific recommendations made in the final report included the establishment of a national farm debt mediation scheme, more agricultural expertise in bankers dealing with distressed loans, and removing default interest charges on distressed land.
Deborah Smith, from Limbri Downs cattle station near Hughenden, said she agreed with all three of those measures.
Mrs Smith told the Banking Royal Commission last year how she had felt intimidated before entering into a debt mediation agreement with National Australia Bank.
She and her husband owned cattle properties in Hughenden and near Charters Towers, and had come into tough times in 2011 when the live export ban hit in the middle of a drought.
“We were told that if we didn’t sign the documents they had then we would walk out of there with nothing but the clothes on our back,” she told the Royal Commission in June last year.
NAB was criticised during the Royal Commission hearings for charging default interest as the Smiths battled to meet the terms of the mediation deal.
“The NAB Bank that we were with charged us quite substantial amounts of default interest,” said Mrs Smith on Tuesday.
“That did cause us a hell of a lot of stress.”
Mrs Smith also said she agreed that more expertise was needed in bank managers dealing with agricultural loans.
The National Farmers’ Federation has welcomed the federal government's commitment to establish a Farm Debt Mediation Scheme as part of its response to recommendations from the Banking Royal Commission.
Federal Minister for Agriculture David Littleproud has also endorsed recommendations to give special consideration to distressed agricultural loans.
