1 00:00:07,040 --> 00:00:09,440 Speaker 1: You've been tracking where the money is flowing. When you 2 00:00:09,560 --> 00:00:09,960 Speaker 1: build a. 3 00:00:09,920 --> 00:00:13,720 Speaker 2: Business hour, we'd head the duplicyl and my hr on 4 00:00:13,880 --> 00:00:17,439 Speaker 2: news talks at me. Hey, we've got a Reserve Bank 5 00:00:17,520 --> 00:00:19,119 Speaker 2: decision next week and what they're going to do with 6 00:00:19,160 --> 00:00:21,400 Speaker 2: the OCR it's obviously a cut just how much we're 7 00:00:21,400 --> 00:00:23,279 Speaker 2: going to talk to Liam dan about what they're looking at. 8 00:00:23,400 --> 00:00:26,439 Speaker 2: Denmark has just agreed to implement a fart tax on 9 00:00:26,480 --> 00:00:29,479 Speaker 2: the farmers. Jamie McKay on that, and in Vidia's revenue 10 00:00:29,520 --> 00:00:32,120 Speaker 2: has almost doubled for the year, So Sam Dicky will 11 00:00:32,120 --> 00:00:34,239 Speaker 2: talk us through that right now at seven past six. Now, 12 00:00:34,240 --> 00:00:36,960 Speaker 2: as you know, a bunch of big Australian owned banks 13 00:00:36,960 --> 00:00:39,120 Speaker 2: are copying it at the moment for forcing dairy farmers 14 00:00:39,159 --> 00:00:42,040 Speaker 2: to drop their climate emissions. And what makes the situation 15 00:00:42,159 --> 00:00:44,479 Speaker 2: worse is that our key we dairy farmers, have to 16 00:00:44,479 --> 00:00:48,479 Speaker 2: go lower than Australian dairy farmers. And what makes that 17 00:00:48,640 --> 00:00:51,680 Speaker 2: even worse in Westpac's case is that Westpac is making 18 00:00:51,720 --> 00:00:55,640 Speaker 2: money themselves off investing in climate destroying industries. And west 19 00:00:55,640 --> 00:00:59,600 Speaker 2: Pax chief executive Katherine McGrath's with us. Hey, Catherine, Hi, Heather, 20 00:01:00,040 --> 00:01:02,800 Speaker 2: thank you very much for your time. This evening, Why 21 00:01:02,840 --> 00:01:05,320 Speaker 2: are you being tougher on our dairy farmers than you 22 00:01:05,360 --> 00:01:06,760 Speaker 2: are on the Aussie dairy farmers. 23 00:01:08,280 --> 00:01:09,920 Speaker 1: So the first thing we know is that our New 24 00:01:10,000 --> 00:01:12,240 Speaker 1: Zealand farmers are some of the best in the world 25 00:01:12,360 --> 00:01:14,720 Speaker 1: and we're some of the most efficient in our production. 26 00:01:15,360 --> 00:01:17,720 Speaker 1: And so that means the target that we've put at 27 00:01:17,760 --> 00:01:22,200 Speaker 1: a portfolio level as a not for individual farmers is 28 00:01:22,240 --> 00:01:25,800 Speaker 1: actually smaller than the target that's been put in place 29 00:01:25,840 --> 00:01:28,640 Speaker 1: at a portfolio level in Australia. And that's reflecting how 30 00:01:28,640 --> 00:01:30,640 Speaker 1: good our farmers are today already. 31 00:01:30,400 --> 00:01:32,480 Speaker 2: As in your asking them to go lower than the 32 00:01:32,520 --> 00:01:33,880 Speaker 2: Australians because they are so. 33 00:01:33,880 --> 00:01:37,960 Speaker 1: Good, there is a less of a reduction on the 34 00:01:38,000 --> 00:01:41,319 Speaker 1: total portfolio of agri in New Zealand because we start 35 00:01:41,400 --> 00:01:43,000 Speaker 1: in a better place than the Australians. 36 00:01:43,000 --> 00:01:44,720 Speaker 2: Too cool, But why don't you level the field because 37 00:01:44,720 --> 00:01:47,720 Speaker 2: it's one climate. I mean, if you want, let's say 38 00:01:47,720 --> 00:01:50,000 Speaker 2: you're taking the Australians to zero point eight five, why 39 00:01:50,000 --> 00:01:52,480 Speaker 2: not let the key we's got to zero point eight 40 00:01:52,480 --> 00:01:53,760 Speaker 2: five as well. 41 00:01:53,960 --> 00:01:56,120 Speaker 1: The way we're looking at it is eighty percent of 42 00:01:56,160 --> 00:01:59,160 Speaker 1: the markets that our farmers export to either have or 43 00:01:59,240 --> 00:02:03,480 Speaker 1: about to have mandatory emissions disclosures, and we know that 44 00:02:03,520 --> 00:02:05,560 Speaker 1: we want Kiwi products to be at the top of 45 00:02:05,600 --> 00:02:08,520 Speaker 1: the list, and so therefore us putting skin in the 46 00:02:08,560 --> 00:02:11,960 Speaker 1: game through having a sustainable farm loan is helping our 47 00:02:12,040 --> 00:02:15,280 Speaker 1: Kiwi farmers to make that transition better and faster. And 48 00:02:15,320 --> 00:02:18,120 Speaker 1: it's really interesting that forty three percent of our lending 49 00:02:18,600 --> 00:02:21,359 Speaker 1: in less than eighteen months is on a product which 50 00:02:21,360 --> 00:02:24,320 Speaker 1: farmers have chosen to go on to to make their 51 00:02:24,320 --> 00:02:26,920 Speaker 1: farm even more sustainable. So I think our farmers are 52 00:02:27,000 --> 00:02:27,840 Speaker 1: voting with their feet. 53 00:02:27,960 --> 00:02:29,639 Speaker 2: Which markets are you talking about? 54 00:02:31,480 --> 00:02:35,400 Speaker 1: The export markets that we've got around the world, UK Europe? 55 00:02:35,840 --> 00:02:38,800 Speaker 1: Eighty eighty percent of all of our export markets. 56 00:02:38,480 --> 00:02:41,679 Speaker 2: The UK and Europe in that And which are the ones. 57 00:02:41,639 --> 00:02:43,920 Speaker 1: I haven't got a full list of them, because eighty 58 00:02:43,919 --> 00:02:46,640 Speaker 1: percent of the markets that our export product are going 59 00:02:46,680 --> 00:02:53,280 Speaker 1: to are interested in emissions, Catherine, So what but that 60 00:02:53,360 --> 00:02:55,160 Speaker 1: they're measuring it and so our. 61 00:02:55,080 --> 00:02:57,720 Speaker 2: Jobs and are they punishing us for it? 62 00:02:57,880 --> 00:03:01,720 Speaker 1: Our job is to help our farmers products are always 63 00:03:01,840 --> 00:03:02,639 Speaker 1: at the top of the list. 64 00:03:02,720 --> 00:03:05,720 Speaker 2: Are those markets all going to punish us if they 65 00:03:05,720 --> 00:03:08,840 Speaker 2: don't see enough change or is it just. 66 00:03:09,160 --> 00:03:12,600 Speaker 1: You're saying so what those markets are saying? As though 67 00:03:12,600 --> 00:03:15,680 Speaker 1: they want to understand the omission intensity of the products 68 00:03:15,720 --> 00:03:19,200 Speaker 1: that are being produced, and there's no punishment growing from 69 00:03:19,240 --> 00:03:21,800 Speaker 1: west Hold on. There's no punishment going from Westpac to 70 00:03:21,880 --> 00:03:25,160 Speaker 1: our farmers. Actually, Westpac is putting skin in the game 71 00:03:25,639 --> 00:03:28,480 Speaker 1: and for farmers that want to do a sustainable lending product, 72 00:03:29,080 --> 00:03:32,360 Speaker 1: then we're actually giving them an interest rates discount. And 73 00:03:32,400 --> 00:03:35,080 Speaker 1: so I think we're doing a great job at supporting 74 00:03:35,160 --> 00:03:35,960 Speaker 1: QUI farmers. 75 00:03:36,200 --> 00:03:38,600 Speaker 2: I just I'm just the reason I'm picking you up 76 00:03:38,640 --> 00:03:41,080 Speaker 2: on that is because this stuff gets thrown around a 77 00:03:41,120 --> 00:03:44,120 Speaker 2: lot and it is not always strictly true what is 78 00:03:44,160 --> 00:03:46,560 Speaker 2: being said here, and it's been catastrophized to a point 79 00:03:46,560 --> 00:03:49,720 Speaker 2: that I think is unfair on farmers. Why, okay, why 80 00:03:49,800 --> 00:03:51,960 Speaker 2: are you why? Why do you think it's even the 81 00:03:51,960 --> 00:03:54,760 Speaker 2: bank's place to be the climate police on these guys. 82 00:03:54,840 --> 00:03:57,240 Speaker 2: If they really care about retaining markets, they could do 83 00:03:57,280 --> 00:03:57,880 Speaker 2: it themselves. 84 00:03:59,320 --> 00:04:02,360 Speaker 1: So no one, I don't think we've been the climate 85 00:04:02,400 --> 00:04:06,600 Speaker 1: police at all. But we recognize that export markets are changing, 86 00:04:07,160 --> 00:04:10,080 Speaker 1: and we're saying we're there to support our farmers and 87 00:04:10,160 --> 00:04:13,000 Speaker 1: helping to make them resilient for the longer term. So 88 00:04:13,040 --> 00:04:16,120 Speaker 1: by putting in place things like the sustainable farm loan 89 00:04:16,560 --> 00:04:19,240 Speaker 1: that our farmers can say we're interested in, we want 90 00:04:19,240 --> 00:04:21,520 Speaker 1: to do it, we're signing up to our own plan. 91 00:04:21,760 --> 00:04:25,080 Speaker 1: You're giving us a discount. I think that's exactly the 92 00:04:25,120 --> 00:04:27,560 Speaker 1: sort of thing that we should be doing to help 93 00:04:27,680 --> 00:04:30,479 Speaker 1: our farmers do what they've been doing for years, but 94 00:04:30,640 --> 00:04:33,080 Speaker 1: do even more as the markets change. 95 00:04:33,480 --> 00:04:36,240 Speaker 2: So Catherine, you're going to offer them a discount if 96 00:04:36,240 --> 00:04:38,600 Speaker 2: they hit the target that you've set. What if they 97 00:04:38,600 --> 00:04:40,640 Speaker 2: come to you and they go, actually, now I'm not interested. 98 00:04:40,760 --> 00:04:42,600 Speaker 2: I'll just take the standard rate and I'm just going 99 00:04:42,640 --> 00:04:44,599 Speaker 2: to do all of the climate ambisions. I feel like, 100 00:04:44,800 --> 00:04:45,560 Speaker 2: are you cool with that? 101 00:04:46,880 --> 00:04:49,400 Speaker 1: So we're very So what we're doing with our farmers 102 00:04:49,640 --> 00:04:52,400 Speaker 1: is for those that do want to take the sustainable 103 00:04:52,440 --> 00:04:54,359 Speaker 1: farm loan that has a discount, we give them that 104 00:04:54,440 --> 00:04:57,599 Speaker 1: discount upfront, and they've got a couple of years to 105 00:04:57,640 --> 00:04:59,520 Speaker 1: put in place the changes that they want to put 106 00:04:59,520 --> 00:05:01,839 Speaker 1: in place. So I think that's a really good thing 107 00:05:02,200 --> 00:05:04,679 Speaker 1: for our farmers who aren't wanting to do anything about 108 00:05:04,680 --> 00:05:07,760 Speaker 1: that their lending continues as it has done, so there 109 00:05:07,800 --> 00:05:11,599 Speaker 1: is no punishment happening. There is support, and there's support 110 00:05:11,640 --> 00:05:14,280 Speaker 1: to help our farmers be resilient in the longer term. 111 00:05:14,120 --> 00:05:18,640 Speaker 2: And does that lending does that lending extend beyond twenty thirty? 112 00:05:18,680 --> 00:05:20,760 Speaker 2: So if twenty thirty one comes round and they're like, 113 00:05:20,839 --> 00:05:23,200 Speaker 2: I just I'm just doing everything for the climate that 114 00:05:23,360 --> 00:05:24,880 Speaker 2: I don't care, you're cool with that. 115 00:05:26,839 --> 00:05:29,240 Speaker 1: I haven't got the figure in my head in terms 116 00:05:29,240 --> 00:05:31,719 Speaker 1: of how long some of our farming loans are. 117 00:05:32,279 --> 00:05:34,119 Speaker 2: But well, I'm asking you because you have a twenty 118 00:05:34,200 --> 00:05:37,280 Speaker 2: thirty target, so beyond twenty thirty, are you still going 119 00:05:37,320 --> 00:05:39,680 Speaker 2: to take a hands off approach with farmers who don't 120 00:05:39,680 --> 00:05:41,520 Speaker 2: care about the climate and want to do everything that 121 00:05:41,520 --> 00:05:43,640 Speaker 2: they want to you will continue to lend to them. 122 00:05:44,279 --> 00:05:47,360 Speaker 1: We want to continue to grow agribook and we're really 123 00:05:47,400 --> 00:05:50,000 Speaker 1: confident that New Zealand farmers want to continue to have 124 00:05:50,080 --> 00:05:52,920 Speaker 1: their products very viable in the longer term. That didn't 125 00:05:53,040 --> 00:05:56,040 Speaker 1: we want to sport that sector. I don't know what 126 00:05:56,080 --> 00:05:58,520 Speaker 1: the Bank's going to decide to do in twenty thirty, 127 00:05:59,000 --> 00:06:01,960 Speaker 1: but I am very c that we are supporting farmers 128 00:06:02,000 --> 00:06:04,599 Speaker 1: by stepping in and helping them when they want to 129 00:06:04,600 --> 00:06:06,400 Speaker 1: be helped. If they don't want to be helped, we 130 00:06:06,480 --> 00:06:09,640 Speaker 1: continue to bank them. Secondly, that we're seeing great take 131 00:06:09,720 --> 00:06:12,880 Speaker 1: up of a product. That's indicating to me that farmers 132 00:06:12,880 --> 00:06:14,880 Speaker 1: are voting with their feet and this is something they 133 00:06:14,960 --> 00:06:17,240 Speaker 1: want to do. If you'd asked me whether we'd have 134 00:06:17,279 --> 00:06:20,280 Speaker 1: had forty three percent of our lending on a sustainable 135 00:06:20,320 --> 00:06:23,000 Speaker 1: farm loan eighteen months after launching it, I would have 136 00:06:23,000 --> 00:06:25,479 Speaker 1: told the team they were being too optimistic. So there's 137 00:06:25,520 --> 00:06:28,359 Speaker 1: a great appetite for it amongst our farming customers. 138 00:06:28,640 --> 00:06:32,080 Speaker 2: Are you guys hypocrites because you are doing you're asking 139 00:06:32,120 --> 00:06:35,080 Speaker 2: farmers to do all of these things and yet you 140 00:06:35,080 --> 00:06:38,440 Speaker 2: yourselves are investing nine billion dollars in fossil fueld industries, 141 00:06:38,480 --> 00:06:41,880 Speaker 2: which is, let's understand this, you are funding those businesses. 142 00:06:43,640 --> 00:06:47,200 Speaker 1: So firstly, we're not hypocritical at all. Westpac New Zealand 143 00:06:47,279 --> 00:06:49,760 Speaker 1: is a separate business to Westpac Group and our fossil 144 00:06:49,800 --> 00:06:52,920 Speaker 1: fuel money exposure is relatively low at one hundred and 145 00:06:52,960 --> 00:06:56,919 Speaker 1: ninety three million and falling. But irrespective of which sector, 146 00:06:57,080 --> 00:07:00,919 Speaker 1: we're focused on supporting existing customers to transit and that 147 00:07:01,040 --> 00:07:05,080 Speaker 1: applies whether it's for fossil fuel customers or agri customers. 148 00:07:05,120 --> 00:07:08,160 Speaker 1: And we're doing great work with homeowners too, if they 149 00:07:08,200 --> 00:07:10,560 Speaker 1: want to do things to make their home more resilient 150 00:07:10,600 --> 00:07:13,280 Speaker 1: to climate there's a great product that we have which 151 00:07:13,320 --> 00:07:17,320 Speaker 1: means that they can get you know, lending currently at 152 00:07:17,400 --> 00:07:20,920 Speaker 1: zero percent to help them make those decisions. And so 153 00:07:21,000 --> 00:07:22,920 Speaker 1: our viewer as we need to have some skin in 154 00:07:22,960 --> 00:07:25,880 Speaker 1: the game, which we do across almost every sector that 155 00:07:25,920 --> 00:07:26,520 Speaker 1: we support. 156 00:07:26,640 --> 00:07:28,920 Speaker 2: Okay, Catherine, thank you. I know you don't give a 157 00:07:28,920 --> 00:07:30,880 Speaker 2: lot of interviews, so I really appreciate you coming on 158 00:07:30,920 --> 00:07:32,720 Speaker 2: the show and talking to us. I appreciate your time. 159 00:07:32,760 --> 00:07:35,200 Speaker 2: That's Katherine McGrath, chief executive at Westpac. 160 00:07:35,880 --> 00:07:39,040 Speaker 1: For more from Heather Duplessy Allen Drive, listen live to 161 00:07:39,160 --> 00:07:39,679 Speaker 1: news Talks. 162 00:07:39,680 --> 00:07:42,880 Speaker 2: It'd be from four pm weekdays, or follow the podcast 163 00:07:43,000 --> 00:07:44,000 Speaker 2: on iHeartRadio.