Banks operating in Australia offer a wide range of products and services
Major banks have an investment grade greater than “A”
Source: APRA Monthly Banking Statistics (July 2006) * Total resident assets = sum of assets adjusted for provisions for impairment 22.1 Deutsche Bank AG 32.2 ING Bank (Australia) 47.1 Macquarie Bank 35.4 Bank of Western Australia 41.0 Suncorp-Metway 86.3 St George Bank 214.7 ANZ Banking Group 223.7 Westpac Banking Corporation 268.1 National Australia Bank 280.4 Commonwealth Bank of Australia A$b*
Agribusiness Banking Sector Major Banks Regionals Specialists
Agricultural Finance in Australia CAGR 2.9% CAGR 8.6% CAGR 14.4% CAGR 13.3% CAGR 10%
Credit Outstanding $43b
Pastoral Houses 7%
Annual growth ~ 10% p.a
Source: Agribusiness Banking System Loan Outstandings by Loan Size Source: APRA, RBA, NAB Economics
International Comparison Ave Debt per Farm (LHS) Debt as % Farm Income (RHS) Source: NAB Economics
Major Agricultural Industries Source: ABARE. Westpac Economics
How Prices are Determined Source: Westpac Economics World indicator price, NY Asia mkts Sugar Cotlook ‘A’ index Asia mkts Cotton Supply contracts Export contracts UK, US mkts Supermarkets Wine Saleyard prices Export contracts US, Middle East Saleyard Sheep meat Eastern market indicator China Wool World indicator prices Europe, Asia Major producers Dairy Domestic pools, trades CBOT futures Global stocks Local traders Wheat Saleyard prices Export contracts US, Asia Saleyard Beef Reference Export Domestic Industry
Government Support for Agriculture Source: ABARE. Westpac Economics
Government Support by Industry Sources: ABARE, Productivity Commission. Westpac Economics
Overall Australia has eliminated most agricultural production and trade distorting support reflecting comprehensive market orientated reforms undertaken over the past 15 years. The level of remaining support is low (OECD 2006)
Exceptional Circumstances (EC) assistance is the Australian Government’s main vehicle for providing assistance to farmers in a region or industry that is experiencing a severe downturn due to a rare and severe climatic or other event.
EC assistance ensures that viable farmers are not forced to leave the land due to events that are beyond the boundaries of normal risk management.
EC are events that occur on average once in every 20 to 25 years and have an impact for a prolonged period
Assistance is available in the form of EC Relief Payments and EC Interest Rate Subsidies.