Author: Philip vanDyk

“In this case, it appears the local authority is exercising its power under the Local Government (Rating) Act 2002 to collect the rates due. Banks take their obligations to comply with the law very seriously.”

The NZ Banking Association argues higher rates for farmers can be attributed to Reserve Bank rules requiring its members to hold more capital to insulate against losses from riskier rural loans.

The NZ Banking Association, in its submission to the select committee, said farms were a business so “inherently riskier” than a home loan as risk and price was based on the ability to repay the loan if something goes wrong.

Banking Association chief executive officer said banks had “nothing to hide”. “We’re a very open and transparent industry, it’s partly because we’re so heavily regulated, we’re happy to be open and transparent.”

In response, the New Zealand Banking Association said it would review international best practice in this area by September 2024 and consider updating the current approach in the Code of Banking Practice.