Consider for a moment or two.
In 2008 (GFC) the Australian Government gave a guarantee on bank deposits to Australian Financial Institutions to the tune of $600B. It was in the eyes of the Government a necessary initiative to shore up local confidence and protect the nation’s international competitiveness and funded by taxpayers.
Fast forward 10 years and Australia is drought-stricken.
The big four banks in Australia now have a combined market value of approximately $384B. When you consider, 82% (20,500,000) of Australian’s are over the age of 15, the $384B represents a value of $18,731 per person.
As a Friday 3 August 2018 the big 4 banks have donated $3,300,000 to The Big Drought Appeal to help the Australian Farmers.
• Commonwealth Bank - $2M
• ANZ - $1M
• Westpac $200,000
• NAB - $100,000
Using the same parameters as above their donations represents $0.16c per and 0.0008% of the value each person over the age of 15 delivers to the banks.
We’d love to get your thoughts. Are the bank's donations fair and reasonable or should they be donating more?
Hmmmmm, my initial response is "OF COURSE THEY SHOULD BE DOING MORE!!!!"
perhaps a more considered response would start with the following questions:
1: how much money do the Big 4 have currently on their books loaned out to primary producers?
2: how much profit do they make on those loans?
3: how much money do they have loaned out to regional businesses who DIRECTLY rely on primary producers???
4: how much profit do they make on those loans?????
Australian banks are a protected species. they are regulated, and governed by sets of rules made by our government(s). They are also guaranteed by those same governments......which gives everyone who uses our banks an extremely high level of confidence in our financial system
Now, because they are protected and guaranteed by the government, they make an obscene amount of profit year in, year out. Banks suffer from no drought. When the economy is booming, they make money.....when the economy is tight they still make money. Maybe not as much, but they never EVER lose money.
And the vast majority of Australians share in the spoils earned by our banks. Most Australians are invested to some degree or other in the banks: either through direct shares, or through shares held by their super funds. EVERYONE benefits from the massive profits reported by the banks each and every year. Profits derived in part by lending money to the agricultural sector.
Australians ALSO benefit from our farmers: directly AND indirectly. We are fortunate to benefit from the most efficient primary producers in the world. No one produces grains as cheaply as Australian farmers can. No one produces beef, or lamb or fruit, or vegetables as cleanly, or as cheaply as Australian farmers can, and do.
Take a look at the health scares from foods sourced in other parts of the world. Take a look at what Europeans have to pay for steak. The fact that we can go pretty much anywhere in Australia, and buy a steak free from all sorts of bad chemicals without having to sell a kidney to pay for it speaks volumes for our primary producers and what they do.
So, given that pretty much everyone everyone benefits from our banks and pretty much everyone benefits from our primary producers, it seems pretty clear to me that the two are connected a whole lot more than many of us realise......and it seems also very logical that the banks CAN and SHOULD do a whole lot more than what they have done to date to ensure that as many farming families get through the drought without loading up to crippling debts as they work to keep their breeding stock alive through this terrible drought.
Also the cropping farms that have sowed their winter drops dry in the hope of winter rains will not earn anything until AFTER it rains....and they need to finance the next crop somehow.....and also somehow survive through to their next harvest....which could be 18 months away.......
soooo......yeah. The Banks can do a whole heap more. And the only way they will is if their shareholders demand it of them......which is pretty much every person in the country. So maybe a good start is by getting a bit vocal in your local branch about what the banks are doing or NOT doing to support farmers.....
anyway that my two bobs worth.....
What he said!
I really don't think I can answer that question any better or as well as Brendan Curran has - his response is brilliant and, in my opinion, so true.
Perhaps, for the banks, it's not as much about giving the farmers money as it is about giving them a real break/relief in terms of what they might owe the bank...although a decent handout wouldn't go astray also. As Brendan said, the banks are never in a situation where they don't make money so now is the time for them to give back to people that really need it.
Well said Brendan
I found this on the National Farmers Federation website. It gives people an idea of the scope and scale of agriculture in Australia, and perhaps a clue as to actually how many people are under the pump right now.
I find it amazing that our farmers produce virtually everything we eat. Each farmer produces enough to feed 150 people in Australia and another 450 overseas!!!!
300,000 DIRECT JOBS!!!
1,600,000 flow-on jobs!!!
As a DIRECT RESULT of the export income generated by farming, we enjoy a comparatively high international exchange rate......which means when we import stuff we dont have to pay as much to get it here......this means that the Korean car you bought last year cost you $18,000, not $36,000.
SO thank a farmer......not every time you tuck into a big juicy steak, or eat an apple that is not laced with DDT, or rip into your quinoa smoothie.....or buy a car......or that fancy new i-phone.....or your Italian suit....just thank a farmer, and remember that they generally work longer hours for less pay than most other people......farming people dont go farming for the financial reward......its mostly in the genes....and they are for the most part happy to work 7 days a week in the middle of nowhere in conditions that would generally cause an OH&S rep to have an apoplectic fit.
so thank a farmer:)
The banks can do more - and should, but so can and should we the consumer.
Would love to see the banks doing more to assist with the direct financial burden during long droughts (freeze repayments and interest, extend finance where viable) along with the donations. Without looking into specifics, are Westpac or NAB doing more as direct assistance rather than donations to a cause that may not get to the farmers efficiently enough?
As a country, we need to look at our spending habits and look to keep profits in Australia - farm produce and manufacturing etc. before we fall into a position where we have no capacity to do so.
Good on simplyaskit for raising this discussion.
I agree with all of the comments above. Support for our farmers as an industry is vital to the continued success of our country.
However, putting aside the economic reasons to support our farmers, put yourself in their shoes. Imagine being so affected by something you cannot control and that you have no idea of when it may end... Imagine every day waking up to the reality of not knowing how you're going to get through to tomorrow... Imagine a day's work being spent loading your shotgun so you can (as humanely as possible) remove your stock from any further suffering. Imagine having to put on a brave face to your family while all the while not feeling like getting out of bed and facing another day....
The mental toll on farmers and their families is huge.
Donations are needed to ensure food can be put on the table and farming families have access to clean water etc. But it is also critical that mental health and counselling services are sent into farming communities urgently.
Banks and other large corporates (supermarket chains for example) can assist financially by making donations - but by giving repayment holidays, revising trade terms etc., can also lift the financial burden that must weigh heavily on the mind of the farmer.
Australia has been known as the lucky country thanks in no small part to our farmers. Now while they feel like they are all out of luck - it is for the rest of us to show our appreciation by not just providing financial support but by also letting them know we care.