UPDATE: ANZ Chief Executive Mike Smith flew 2,000 kilometres to Carisbrooke Station to apologise to Charlie Phillott.
Fighting to keep his home for over 5 years, ANZ backs down. It's Victory for Charlie. Good on you Charlie.
It’s been a long, hard fight. Charlie Phillott is the 81-year-old farmer from outback Queensland who took on the might of the ANZ Bank… and won. The bank forced his family off Carisbrooke Station, their property of 50 years.
But the ANZ didn’t bargain on Charlie’s dignified determination. He certainly won’t be bullied. And,on 60 Minutes, the ANZ made the most extraordinary back-down. ANZ Chief Executive Mike Smith flew 2,000 kilometres from the bank’s Melbourne headquarters to personally apologise to Charlie. And that’s not all that happened during this extraordinary encounter.
It’s the most dramatic development yet in the story that 60 Minutes has been following for much of 2015: the desperate plight of farmers across Australia forced off their farms by the ANZ. Charlie’s win is a breakthrough. But there are lots of questions for the ANZ boss about how this all happened, and what now for the many other distressed farmers just like Charlie.
ANZ provided further comment:
• ANZ categorically rejects any suggestion that it was motivated in any way to foreclose on loans or to act in an aggressive manner with former Landmark customers by the presence of a clawback clause in the Landmark purchase agreement.
• Since the acquisition, there have been a number of factors that have adversely affected agribusinesses throughout Australia (not just Landmark or ANZ customers) including drought, the live export ban, Queensland floods, overall decline in land prices and softening of commodity prices in particular beef cattle. This affects all banks.
• As Mike Smith indicated, we do acknowledge ANZ has an issue with legalistic, process-driven actions against customers in difficulty. We are working hard to change those practices including having made senior management changes to bring a more personal, relationship focussed approach to these issues. We need to do better than we have done.
• This does not mean there won’t be difficult decision made in the future but in the very small number of cases where foreclosures occur we want to have taken into account a longer-term view of viability, the customer relationship and the personal circumstances of the farming family into account.
• We plan to announce on Monday - and first via your program - that this will be extended for another year to all drought declared areas in Australia. Of course this applies in particular to northern New South Wales and to Queensland.Reporter: Michael Usher
Producer: Grace Tobin
Drought, floods, heat ... our famously tough farmers face many foes. But for many, dealing with banks has proved the greatest catastrophe of all.
When she closes her eyes, Cate Stuart can see the first light at Mount Morris Station. Being woken by the brolgas singing and dancing under the sprinkler, taking her coffee onto the veranda to watch an emu bringing his chicks up from the river, watching the kangaroos and wallabies going about their business.
"I would go outside and watch the sun rise," she recalls of the station outside Charleville in south-west Queensland, about 700 kilometres west of Brisbane. "The colours are just indescribable. No photograph could ever do the beauty justice. I was just in awe. I would think, 'We are the luckiest people alive on the land because we get to see our coat of arms everyday.' "
Stuart no longer lives at Mount Morris and she can't speak of her morning ritual without emotion. The bank evicted the family last October and her heart is broken. "All I have is photographs now."
Cate and Mark Stuart’s adult children face the receivers at Mount Morris Station, in south-west Queensland. Photo: Courtesy of Cate Stuart
Her daughter Brittany, 21, says she doesn't know who she is any more: "I was a grazier." Stuart's six-year old granddaughter is eighth-generation on the land. Or was.
Stuart wakes up every morning ready to check on the animals and start the pump to fill the house tank, and then she remembers. She has lost her home, her livelihood, her children's future, her world. "All I want is not to be a disgrace to my ancestors through the bank's skulduggery," she says.
Now living in a rented house in Charleville, Stuart has become an advocate for others facing a similar nightmare. Her days are now filled fielding calls and emails from people in places as far apart as Tasmania and Cape York - all from farmers who have lost or are losing their farms to what's being described as banks' predatory, "unconscionable conduct". Farmers who are frequently close to breaking point; fighting the banks for their very survival.
Brolgas outside Mount Morris homestead. Photo: Courtesy of Cate Stuart
Many of them are too frightened of antagonising their bank to speak on the record. One man gives me a handwritten note, his fingernails bitten to the quick. "Banks," says the note, "have killed more livestock and people than the drought." A woman on a farm in Ballina, in northern NSW, tells me there are times when her husband drives off and she doesn't know if he will come back. "I have had to ring my neighbour and say, 'I don't know where he has gone but he is not in a good way. Can you just make sure he doesn't go and shoot himself?' He vomits blood and he has bad ulcers from the stress. You don't know what it does to children to see their parents stressed and desperate."
When her brothers inherited the family farm in the 1980s, Cate Stuart, along with her husband, Mark, set out to make their way with their own property. "You work for people, you gain more knowledge. We started, little bit by little bit, to get where we wanted to go."
Eventually, they were able to buy and sell a property in south-west Queensland "for a good profit". They then bought a 4000-hectare property called Evergreen, near the border of NSW and Queensland. "Everything was going fine. We were sitting at 83 per cent equity, the drought and global financial crisis were eating into our equity a little bit, but certainly nothing detrimental."
Charlie Phillott at his former Queensland property, where he is now a "caretaker". Photo: John Elliott
They'd been eyeing the 20,000-hectare Mount Morris Station for many years, wanting to be part of a history dating back to the 1850s. Attracted by the opportunities for tourism, hunting, grazing and agistment, they paid $2.2 million for Mount Morris in 2008. Concerned they had reached their maximum debt level, they decided it would be far too expensive to freight their existing cattle from Evergreen to Mount Morris. Instead, they would buy a new herd for Mount Morris.
Rabobank agreed they should sell their herd and restock. But 10 days after the herd had been sold, the bank refused to allow them to redraw the money to buy new cattle. That decision killed another loan from the Queensland Rural Adjustment Authority. "A cattleman without cattle might as well be dead," says Stuart. "The heavens opened up and it rained. The best years we have ever had in this country happened. We were sitting there with this beautiful property, feed up to your shoulders and no stock because they denied us."
Their account was frozen. Unable to operate, the Stuarts were forced to default. "We had never defaulted or missed a principal interest payment in our lives," says Stuart. "We owed no one money except the bank. Why would you shut down a perfectly viable operation and a perfect credit rating? We had a 15-year contract with the bank; they have interfered in our business and brought us to our knees."
A security team evicts Claire (striped shirt) and Chris (blue shirt) Priestley from a north-west NSW property owned by their family since 1969. Photo: Jaroslaw Gasiorek
Although saying it was unable to discuss a client's case, Rabobank issued a statement to Good Weekend. "The appointment of receivers is generally made as a last resort, usually following lengthy negotiations."
The Stuarts say more farmers are struggling with banks than ever before, and the issue is increasingly urgent. The Australian Institute for Suicide Research and Prevention has expressed its concerns about the rising number of our farmers who are killing themselves. Alarmingly, a recent survey puts their rate of suicide at more than twice that of the general population.
Isolated and under pressure, farmers are running out of options as the banks close in. "And there is no accountability," says Stuart. No one is listening. "Sometimes you feel like you are in a soundproof room, screaming at the top of your lungs, and no one can hear you."
Brother and sister farmers Chris (left) and Claire Priestley on their drought-affected property near the outback town of Walgett, NSW. Photo: Reuters
Having heard dozens of stories from dispossessed farmers, it is clear to Good Weekend that there is something close to a humanitarian crisis happening in rural Australia's heartland, despite denials by banks. "It is a source of national shame," says Tasha Keys, a senior case manager at advocacy group Unhappy Banking (UB).
Federal Agriculture Minister Barnaby Joyce agrees that, "of recent times, it has now become an issue where the banks have become more overt and aggressive." This aggression has been conveyed in foreclosures, not just on farmers on marginal land or affected by drought, but on properties that have been devalued by a host of short-term factors. Whether it's being forced to sell cattle to meet bank repayments, or denied finance to plant crops so they can trade their way out of debt, it's as if farmers are being deliberately set up to fail and face foreclosure.
Evan Jones, honorary associate, department of political economy at Sydney University, says, "The evidence that we are seeing suggests that there is an underhandedness towards the rural customer, definitely what we would call unconscionable conduct and deceptive practices - no doubt about it."
Charlie Phillott became the weathered face of the rural debt crisis at the age of 87. Phillott had never missed a mortgage payment, but because of the drought, the ANZ bank had devalued his central-west Queensland property, Carisbrooke Station, which he'd run since 1960. The banks deemed it an "unviable" risk, and he was evicted in March last year. From there, he wound up penniless in the small town of Winton.
In desperation, the federal MP for Kennedy, Bob Katter, convened what he described as "Winton's Last Stand" in December last year, a meeting of the dispossessed and their sympathisers. "If you drew a portrait of the best that there is in this country, you would be looking at a picture of Charlie Phillott," says Katter. "I first went out to his station when I was 18. My father said, 'You have got to have a look at what this bloke has done.' " Pictured right Cate Stuart. Photo: John Codrington
Dr David Pascoe and his wife, Heather, were at the meeting. "It was like half a dozen of the worst funerals you have ever been to - with all that broken grief sealed up into one room," he says. An equine vet from Oakey, 160 kilometres west of Brisbane, Pascoe posted an impassioned open letter on Facebook that was viewed by approximately 2.4 million people. Pascoe spoke of "corporate terrorism; our own Australian people are being bullied, threatened and abused by both banks and mining companies until they are forced off their own land."
Because of the public outcry, the ANZ hastily restored Phillott to his beloved Carisbrooke, but he is merely a caretaker: he no longer owns the farm. At the time of writing, he was negotiating with the bank for compensation for the property being run down in his absence. Barnaby Joyce explains that he had a meeting with the major banks last September and told them, "We can go hard on you, if you go hard on them."
The ANZ announced a 12-month moratorium on evicting drought-stricken farmers or raising interest rates. "The truth is," says Pascoe, "the banks just paid it all lip service." The evictions continued even after the moratorium began, he insists.
Bob Katter believes that in Queensland alone, "it is considered that more than 60 per cent of farmers are in serious trouble and could be foreclosed on this year or the year after. I think that there is duress and inducement in almost every case. In the cases that I have looked at closely, there is a definite pattern of behaviour. They say, 'Oh, we will leave you the small farm or we will leave you the house in town.' But [in the fine print] the small farm is not left with you, the house in town is not left with you. They take the whole lot."
In the northern states, farmers have found themselves in a perfect storm of disaster. The 2011 ban on live cattle exports to Indonesia destroyed strong businesses overnight. Compounding this was drought in many parts of the country, which left some farmers without any income for three years. Although the federal government made $100 million available in its Drought Recovery Concessional Loans Scheme, the banks have to agree to farmers taking those loans.
Victorian dairy farmer John Cartwright was seriously ill in hospital when Rabobank inveigled his children, who had his power of attorney, to sell his dairy herd. When he was discharged from hospital, he sold one of his two properties to reduce his debt down to $150,000 against a security of $700,000. But his bank told him that because he had no stock to produce an income to pay back the $150,000, they would sell him up. When Cartwright lost everything, his wife had a nervous breakdown.
Business advocate and founding member of the Small Business Party, John Codrington, has been crossing the country in the past months, talking to farmers in distress. He estimates that "several hundred" farms across Australia have faced foreclosure recently. "The police in Longreach [in central-west Queensland] have confirmed that there were 73 evictions in that district alone last year," he says. "If that is just Longreach, then what about all the other areas around Australia? There could be as many as 1000."
Steven Münchenberg, CEO of the Australian Bankers' Association (ABA), rejects the assertion that foreclosing on farmers is widespread. "The suggestion that there is some sort of systemic and deliberate attempt by the banks to get farmers off their land has been put to me numerous times. It is a last resort for banks to foreclose. What we are seeing is that there are incidents where people are very unhappy about their treatment and very unhappy about the consequences."
Sister and brother Claire and Chris Priestley had endured years of drought, and then flooding, on the four northern NSW farms near Walgett that they had inherited from their father. They had borrowed heavily throughout these years, against property that had been in the family for five generations, which was valued at $12 million and covered about 9000 hectares.
After a wheat crop was destroyed by floods in 2010 - a national disaster in three states - the NAB called for a farm debt mediation process (a required precursor to repossession). But, says Claire, "This was not mediation, this was the end. Their obligations were impossible to fulfil." The bank refused to lend them $60,000 to put in another crop the following year, when the conditions had become ideal. "The property looked magnificent," she adds. "There was all this potential for cotton and wheat. They defaulted us instead of negotiating a loan for the season." When the bank called in the loan, the Priestleys were given one month to leave; the bank had refused to wait for feasibility studies. "They sent in two sheriffs, two locksmiths and two bodyguards," adds Claire. "They refused to investigate our complaints ... Now I am on Newstart, looking for a job and can't get employment. My life is just a nightmare and I am being evicted because I can't pay the rent."
An agronomic consultant's report found that had operating capital been available to the Priestleys from 2009 for planting cotton and wheat, the net surpluses would have been $9 million - enough for them to meet financial commitments and secure their future.
Good Weekend has heard story after story of loans that have been truncated without discussion, agreement or the permission of the farmer. Barnaby Joyce describes this as "completely unconscionable. You can't just have what is called a unilateral variation of a contract if every representation you made to that person was that it was a 15-year facility."
Says Unhappy Banking's Tasha Keys, "These contracts are fairly thick. They have got a little sticky Post-it note where [farmers] sign - so they sign it. And if they do pick up [a clause about a loan being dramatically shortened], in the majority of cases the bank manager will say, 'Don't worry about that, we will just roll it over.' And then they don't. A verbal exchange between a farmer and a bank manager is virtually impossible to prove in court."
When asked how a bank can foreclose on a customer who is not missing interest payments, the ABA's Steven Münchenberg explains: "Because there are a host of other conditions on the loan. Obviously meeting your interest payments is a primary one
but you can have a situation where the underlying security is insufficient. There can be situations where the loan is not viable."
Left with nothing and unable to afford lawyers, farmers are often then exploited, says Cate Stuart, "for thousands of dollars, or shares in their land, from myriad people, negotiators and brokers". They are often forced to represent themselves in the alien environment of a courtroom. They come from a world where your word is your bond, and a handshake seals the deal. They come to court with their heart on their sleeve, and everything to lose.
Says Sydney barrister Peter King, "Banks always have the best paid legal counsel, biggest teams and best documents. The scrappy old farmer at the end of the queue doesn't look good. Often they can't afford legal representation, so they have to ring by phone to be heard, and so on. It just doesn't look good and judges have no sympathy."
Frank Bertola grew up clearing the land at Bremer Bay, on the south coast of Western Australia. He and his wife, Helen, raised 11 children on their farm. He was given no reason when the ANZ truncated his loan, from an expiry of 2031 to March 2010. "We had something like four months to pay the debt out," says his ex-wife, Helen. "We had not defaulted. We were living hand-to-mouth, but we managed. But they came in and devalued the property."
Bertola battled through the courts, but they lost everything. A barrister for the ANZ said the loan arrangements had been subject to a yearly review, which was stated in the terms and conditions, and the bank had been "concerned" about the Bertolas' debts. The Bertolas' 33-year marriage broke up.
"The pressure hits you in every area," says Helen. "It hits you first in family life. We did struggle, but this came into our lives and turned everything upside-down and there is nothing left. Our whole family has fallen apart from the mental stress. One night, Frank just lost it and we didn't know if he was going to be there in the morning."
The Bertolas had owned their farm, but were encouraged by Landmark to borrow heavily to buy another farm. Landmark was an investment scheme set up by the Australian Wheat Board, which offered loans on a 25-year basis and whose loan book was then bought by ANZ.
In 2009, Tasmanian farmer Jody Freemark (not her real name) changed financiers and also went to Landmark. "We farmed on the east coast and bought an additional property in a high-rainfall area. That was April 2009, and we got our letter of offer. Within a month of us going with them, they were pressing us to sell everything."
The Freemarks have sold one farm to appease the bank and are currently fighting through the courts. "So many women have left their husbands," she says. "[The men] are left in limbo-land; they have got no wife, their children have disowned them because [Dad] has gone loopy."
Says barrister Peter King, "The ANZ wanted to become a major agri-business bank and they thought they could do it by buying in through the Australian Wheat Board. But they have done so at the expense of farmers, by strict application of lending criteria and by alteration of lending criteria. There is profiteering at the expense of farmers, failure to be there for the long term."
The wider implications of pushing farmers off their properties has led to speculation that Australia could lose control of its agricultural resources as foreign corporations move in. Says Nationals Senator John Williams, "We have about 400 million hectares of agricultural land; currently around 50 million hectares is foreign owned. Once you lose the farm, you lose control of food and where it goes. As the world population grows to 9.3 billion by 2050, Australia's food-supply demand will increase and increase. The most optimistic industry we have is agriculture and the supply of food."
Farmers who have inherited knowledge from grandfathers and great-grandfathers are an asset, Williams says, "that must be retained. That in itself is worth leniency when banks are looking at the books. In five years' time, the value of those properties is going to soar."
Agrees Dr David Pascoe, "The only way Australia can pay its debt is that it has actually got to produce something to sell. We have killed our manufacturing. So [one of the last export sectors] we have got left is agriculture and the way we are selling agricultural land at the moment, we won't have that, either. Australians have never been consulted about this."
In February, Barnaby Joyce announced stricter controls on foreign ownership of agricultural land. The screening threshold was reduced from $252 million to $15 million for land purchases. A spokesperson for Joyce says there is "no evidence" that foreclosed farms are being "snapped up by overseas buyers" but that a register is being set up to "improve transparency" and to give people confidence that farm sales to foreigners "are in the national interest".
Tasha Keys believes that competing in a global market where Australian-grown food is processed in other countries, "increases unaffordability of food and increases our need to buy unsafe food from overseas." But while Bob Katter says Australia is on its way from being a net exporter to a net importer of food, a spokesperson for Barnaby Joyce disagrees. "Australia is not at risk of experiencing a food shortage," the spokesperson says. "It is important to recognise that Australia currently exports around two-thirds of the food it produces and will continue to be net exporter of food for many years to come."
Both Bob Katter and Cate Stuart insist that farmers are not asking for handouts. "But we will ask for a hand up," says Stuart, "because we are not on a level playing field and Australians need to understand that. So we will still feed you, we will still clothe you, but we need a hand up to continue that tradition."
On October 14 last year, Cate Stuart marvelled at the great red sunrise for the last time. The Stuarts had run out of time. Until that morning she had believed that refinancing would come through. Various "farm advocacy" groups - some of which are claimed to prey on desperate farmers, promising to arrange finance and charging exorbitant rates - had come and gone. "In our wildest dreams, we never thought we would have to leave," says Cate.
Knowing of terrifying stories where farmers are humiliated and taken off their properties by police like criminals, the Stuarts were leaving voluntarily, but not willingly. Their grand-daughter silently packed her toys to leave the only place she had ever known. Along the path, the roses planted for each member of the family were wilting in the heat.
Cate also scrubbed the house clean.
Not knowing where they were going, the Stuarts had made desperate attempts to find places for their horses, but some animals had to be shot. One colt, which was the last of his breed and had never been handled, panicked while being put on a float, and scraped himself. With the vet equipment already packed, the Stuarts were unable to stem the bleeding and he had to be put down.
In the last moments on Mount Morris Station, three of the Stuarts' four adult children stood shoulder to shoulder as they faced the receivers in their white shirts and ties. They finally left in great clouds of dust, with furniture, dogs, chooks and horses on trucks.
But they have never left Mount Morris Station in their hearts. And they never will.Author: Susan ChenerySource: The Sydney Morning Herald
Mike Wednesday, 01 November 2017 10:35 Comment Link
We should abolish the fractional reserve banking system. Abolish the RBA, usury, the income tax and other regulation which screw over small business and farmers. Those greedy banksters and big corporations love big government regulation to make it harder to compete.Report
jingelic Friday, 04 August 2017 08:55 Comment Link
It's high time that Australians questioned the banking industry about how Australia's money supply is created - and why it always involves interest bearing debt. Those interested in this topic should look at Allan R Jones' 'Beyond Economic Treadmill' or any of the excellent works by NZ writer Kerry Bolton on money creation.Report