Banks rebuff Government’s calls for drought offset accounts for struggling farmers

The major banks are resisting Federal Agriculture Minister David Littleproud’s demand that they offer special accounts for farmers battling drought, with one rural lender ruling it out entirely.

Ahead of this week’s drought assistance talks in Canberra, Mr Littleproud called on the banks to show a “social conscience” and offer Farm Management Deposit (FMD) offset accounts.

All major banks sent representatives to Monday’s drought talks at Parliament House, where the FMD offset matter was raised.

Those banks have said they wanted to work with the Government, but Rabobank has told the ABC it would not offer FMD accounts “at this time”.

Rural Bank is the only regional lender to offer the accounts.

David Littleproud said the banks were resisting the offset option because they stood to lose under the arrangements.

David Littleproud said the banks were resisting the offset option because they stood to lose under the arrangements.

Farm Management Deposits allow farmers to put up to $800,000 of pre-tax earnings into a separate account to access — and pay tax on — in a later year, for example when they are dealing with low earnings in a drought.

The Government wants the banks to allow the FMDs to be used to offset interest on their loans.

Read More at www.abc.net.au

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