Summarised by Centrist
In an interview with The Platform’s Leah Panapa, ACT’s rural spokesperson Mark Cameron called for the Reserve Bank to scrap its strict capital requirements, arguing they have driven up borrowing costs for farmers.
During a parliamentary inquiry, BNZ admitted that these regulations have added billions in costs, with rural borrowers hit hardest. A miscalculation by BNZ’s CEO initially understated the financial impact, later revealed to be $1.8 billion, with $600 million directly affecting farmers.
Cameron explained to Panapa that the Reserve Bank’s 2019 policy changes forced banks to hold excessive capital, leading to higher interest rates that disproportionately burden rural communities.
Farmers, already struggling with increasing costs, now face restrictive lending practices, including being pushed into high-interest overdrafts instead of long-term loans for capital investments.
A Federated Farmers survey found that only 52% of farmers are satisfied with their banking relationships, a sharp decline from 83% in 2018. Cameron warned that without urgent changes, these policies will stifle growth in New Zealand’s primary industries and harm the rural economy.
