Labor promises better deal for farmers battling the banks

Banks will need approval ­before kicking farmers off their own land and compensation for misconduct will be doubled in Labor’s election pitch to the bush.

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Banks will need approval ­before kicking farmers off their own land and compensation for misconduct will be doubled in Labor’s election pitch to the bush.

Today, Opposition Leader Bill Shorten will unveil a package for farmers battling the banks that will see the compensation farmers can access through the Australian Financial Complaints Authority boosted to $4 million.

Labor will also massively ­increase the compensation cap for non-financial losses to $4 million. At the moment, the compensation cap for non-financial loss is just $5000.

Labor leader Bill Shorten will reveal a new package for farmers battling banks. Picture: AAP Image/Mick Tsikas

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The royal commission into banks heard multiple cases of unconscionable rural lending and hundreds of farm evictions. If elected, Labor will force banks to seek pre-approval from a regulator before evicting farmers.

Labor leader Bill Shorten said the new policy will ensure banks are acting in line with community expectations.

The federal government had agreed to adopt 75 of the 76 recommendations made by the Hayne royal commission into banking misconduct and has vowed to set-up a new ­national farm debt mediation scheme.

Farmers suffering through the drought could be awarded more compensation through a scheme. Picture: AAP Image/Dean Lewins

If elected, Labor will go ­further, forcing the banks to review all cases where default interest was slapped on ­distressed loans during drought or natural disaster.

If there is evidence that the bank didn’t act in line with its obligations, farmers could be awarded more compensation through a Retrospective Compensation Scheme.

Mr Shorten said the royal commission exposed the ­devastating impact of farming misconduct on farming families.

“Farmers didn’t just lose possessions because of the banking misconduct, some lost their livelihoods, others lost their lives,” he said.

“Nothing will erase the damage done by the banks, but these measures will go towards making farmers get justice, and that it doesn’t happen again.

Originally published as Labor promises better deal for farmers battling the banks