Treasurer Josh Frydenberg will chair a new drought finance taskforce comprised of Australia’s biggest banks in an attempt to provide relief to drought-affected farmers and small businesses.
Announced on Wednesday, the taskforce promises to “consider and respond” to the grievances of small businesses in rural and regional areas which have suffered a downturn in trade amid the ongoing drought.
It will be comprised of senior representatives from ANZ, the Commonwealth Bank, NAB, Rabobank and Westpac, who it is understood will help to establish mechanisms to share relevant data with one another on a confidential basis.
Minister for Agriculture and Water Resources David Littleproud and drought special envoy Barnaby Joyce will also be involved with the taskforce.
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“The taskforce is an additional way for government, business and industry to work together to ensure that they are not only receiving the most up-to-date information but also able to respond quickly, so farmers and local small businesses receive the additional support they need,” Frydenberg said in a statement on Wednesday.
Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell has welcomed the establishment of the taskforce and its inclusion of small business.
“I’m really pleased that local small businesses are on the list, they regularly haven’t been when there have been drought support packages,” Carnell tells SmartCompany.
“Many small businesses give a lot of credit to farmers during this time, the local pharmacy isn’t going to say they can’t have their scripts … that puts real pressure on their capacity.
“It’s important for banks to realise that small business, just like farmers, will be struggling to pay their loans and interest repayments,” she adds.
Banks have already offered to defer scheduled loan repayments, consolidate debt and restructure existing loans for drought-affected farmers.
But Carnell says further commitments need to be made for small businesses doing it tough.
“Just putting off payments might not be enough,” she says. “They’re deferring payments of default interest …[but] the reality is they need to not charge default interest.”
NSW Business Chamber research released last week found flow-on effects from the drought are a key contributor to a decline in small business confidence across the state.
A total 84% of businesses reported being affected by the drought in August, with New England North West and the Central West experiencing the sharpest deterioration in confidence.
The drought taskforce builds on earlier initiatives to support struggling farmers and business owners, including the recent announcement of a $1.8 billion draft assistance package.
Prime Minister Scott Morrison has encouraged local governments in drought-affected areas to apply for $1 million in funding each to support businesses.
Morrison will also attend a specially convened drought summit later this month promises to bring together stakeholders to tackle issues facing regional and rural communities.