Stick to lending, not deforestation, Nationals leader tells banks

Banks should stick to lending and keep away from environmental policy, the Nationals say.

National Party leader David Littleproud says banks should leave deforestation policies to governments. Picture: NCA NewsWire / Martin Ollman

Banks should leave vegetation management policies to governments, according to the National Party, which has stepped in to criticise moves by lenders to end deforestation practices.

Westpac on Monday revealed that from December 31, 2025, it would prohibit loans from going to dairy, beef and sheep farmers whose projects involve converting natural forest to agricultural land.

It has raised concerns within the livestock sector about how the policy would be defined and implemented and the likelihood of it setting a precedent among banks.

Westpac has said it will use an internationally standardised framework to define what is referred to as deforestation and promised to engage with Australian farmers to form its strategy.

Nationals leader David Littleproud on Thursday called on the government to intervene and use terms within banking licenses to discourage the banks from ­adopting the policy. “The states ­already impose strict vegetarian regulatory frameworks on farmers through punitive vegetation protection laws,” he said. “These senseless new rules proposed by Westpac are an extreme overreach driven by European standards that simply don’t relate to Australian conditions.

“The federal government must urgently send a clear signal to the banking sector that private capital should not be used to regulate Australian farmers and food production, and if Australian banks want to try and do that then we should change the conditions of their banking licences.”

Mr Littleproud also criticised the government’s Agricultural, Land and Emissions Discussion Paper, released this week, which he said foreshadowed policy ­directions that could negatively affect farming practices.

Agriculture Minister Murray Watt defended Westpac’s move and his government’s policy, saying the agriculture industry was already working towards improving sustainability and reducing emissions.

“The irony of a conservative leader and former banker begging the government to intervene in the financial market is certainly not lost on me,” Senator Watt said.

“The Albanese government is committed to working with the ag sector to address both the challenges and opportunities of lowering economy-wide emissions, ensuring future farm profitability and productivity. This will be done without a methane tax or ag sector emissions target.

“Instead, the ag sector will contribute with other sectors to the government’s economy-wide emissions reduction targets and it is work that has already begun, with industry leaders like the NFF, MLA and GrainGrowers ­already committing to reduce emissions.”

It comes after an ANZ shareholder, Catherine Rossiter, said she had initiated legal action against the bank over concerns it was failing to properly manage the risks of climate change and biodiversity loss. “I’m worried that ANZ is not playing the part a ­financial institution should be playing in the 21st century, in managing climate change and biodiversity risk,” Ms Rossiter said. “I think it’s important for shareholders and the community at large to understand if a major bank is taking these risks seriously.”

Equity Generation Lawyers, representing Ms Rossiter, said it was the first case dealing with biodiversity as a material risk to a bank.