Summarised by Centrist
New Zealand’s banking sector is suspected of hindering competition and stifling agricultural lending. Stuart Smith, the National MP chairing a parliamentary inquiry, argued that the influence of the Net-Zero Banking Alliance—a UN-backed initiative aimed at achieving net-zero emissions by 2050—could unfairly restrict farmers’ access to capital.
Richard McIntyre, a Federated Farmers board member, acknowledges that the Net-Zero Banking Alliance may be seen as a positive step towards reducing greenhouse gas emissions. However, if banks, such as Westpac and BNZ, have set specific emissions reduction targets for dairy, sheep, and beef sectors, with other banks expected to follow suit, this could resemble collusion, which is typically prohibited in other competitive areas.
He points out that these banks are foreign-owned and may be effectively regulating the actions of New Zealand farmers.
Smith agrees this issue warrants investigation, particularly regarding the impact of environmental policies on farmers’ access to capital. He believes that decisions about such policies should be made by elected governments, not by banks:
“The problem is that when all four major banks adopt the same policies, it creates a significant impact, unlike a scenario where each bank individually decides who to lend money to based on their own criteria.”
