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Jamie Mackay: The Country host on the Reserve Bank's decision to review bank capital rules · Best of Business

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  Speaker 1: You're listening to a podcast from News talk edb follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio,
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  Speaker 1: The Rural Report on Hither do the Cea Allen.
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  Speaker 2: Drive, Hateen Past six and Jamie mckaye, Host of the
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  Speaker 2: Countries with us Helo Jamie Good. So, federated farmers like
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  Speaker 2: the fact that the Reserve banks having a look at
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  Speaker 2: those bank capital rules.
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  Speaker 3: Yeah, yeah, exactly. I mean, I think Adrian Or's was
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  Speaker 3: for Old Adrian, He's right in the firing line at
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  Speaker 3: the moment, isn't he. He was responsible for this one
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  Speaker 3: or it certainly happened under his watch that banks had
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  Speaker 3: to require enough capital to withstand a one and two
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  Speaker 3: hundred year shock. And I guess the double whammy for
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  Speaker 3: the likes of the farmers was they had to hold
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  Speaker 3: twice The banks had to hold twice as much capital
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  Speaker 3: for rural lending as they did for residential on heather,
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  Speaker 3: there's a real irony, and that at the moment is
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  Speaker 3: Auckland and Wellington house prices fall and probably becoming risky
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  Speaker 3: investments compared to farm prices that are going up. So yeah,
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  Speaker 3: the Federated Farmer's banking guy Mark Hooper has taken over
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  Speaker 3: from Richard McIntyre. Both Calcocky's both done a really good
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  Speaker 3: job on this. The Fed save in fact, and they're
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  Speaker 3: glad that they've got this through or it's going to
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  Speaker 3: be looked at. Look. I think the biggest surprise for me, Heather,
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  Speaker 3: was yesterday morning when the PM was talking to Mike
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  Speaker 3: Hosking and he was, you know, putting his ore or
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  Speaker 3: putting a spanner in the works. Almost there, And he's
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  Speaker 3: on my show tomorrow. I'm going to ask him this.
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  Speaker 3: Did he did he overstep the mark? I mean, good
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  Speaker 3: on him. I think he's exactly right. But it's meant
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  Speaker 3: to be the Reserve Bank's meant to be an independent entity.
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  Speaker 3: And maybe the Prime Minister got into their air and
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  Speaker 3: shoot at big time. Who knows.
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  Speaker 2: Who knows? Hey, how good is this price looking now
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  Speaker 2: that the Bager Group have settled.
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  Speaker 3: Well, it was what about three point eight four billion,
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  Speaker 3: which is a hell of a lot of money. It's
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  Speaker 3: now four point two two billion. I heard you talking
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  Speaker 3: about it. I think between four and five, Heather. Yeah,
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  Speaker 3: so they got the licenses. They agreed on that one.
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  Speaker 3: It's great. The Fonterra is still targeting by the way
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  Speaker 3: a capital return of two dollars per share for the
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  Speaker 3: farmer shareholders. So of that four point two billion, three
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  Speaker 3: point two billion of it will be a capital distribution, providing,
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  Speaker 3: of course, the farmer shareholders vote for it, and turkeys
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  Speaker 3: don't vote for an early Christmas and the fight. That's
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  Speaker 3: not a good example, and the farmers will be thinking,
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  Speaker 3: I'm calling them turkeys. There complete, the complete, the opposite.
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  Speaker 3: This is Christmas for the farmers. And I know that
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  Speaker 3: theoretically some of them are saying, look, we should be
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  Speaker 3: keeping our consumer brands, but you'd have to back Miles Hurrel,
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  Speaker 3: Peter McBride and the team at Fonterra. They're doing a
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  Speaker 3: pretty good job. This three point two billion, A lot
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  Speaker 3: of it will go to paying down debt. Remember that
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  Speaker 3: even though the shares were trading up to six bucks today,
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  Speaker 3: some of those farmers bought shares six or seven or
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  Speaker 3: even eight dollars when they picked. So they're going to
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  Speaker 3: pay down a bit of debt. But also I think
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  Speaker 3: there's a lot of pent up capital expenditure that needs
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  Speaker 3: to happen on farms, and I'm talking about replacement tractors,
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  Speaker 3: maybe capital fertilizer. You combine that with lower interest rates
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  Speaker 3: and better returns, and I think this farming season twenty
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  Speaker 3: five twenty six is going to be a ripper.
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  Speaker 2: Have you figured out how much you're going to get?
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  Speaker 3: You mean me a dairy farmer. Well, Heather, I'll let
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  Speaker 3: you in on a wee secret. I'm in an equity partnerships,
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  Speaker 3: so I'm only one vote in six back in the
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  Speaker 3: day and I voted the other way, but you've got
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  Speaker 3: to go with majority. We sold our Fonterra shares and
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  Speaker 3: we supply Open Country, and honestly, Open Country are a very
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  Speaker 3: good company to supply as well watertime.
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  Speaker 2: Jamie, thank you very much, appreciate it. Jamie McKay, host
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  Speaker 2: of the Country.
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