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Labor slams Nationals senator’s climate ‘mortgage tax’

A Nationals senator has faced criticism, after arguing Australians should be willing to cop higher mortgage costs to support lending to resources and energy companies.

Labor senators Penny Wong and Murray Watt have blasted Nationals senator Matt Canavan for recent comments around lenders and energy producers.

Treasurer Josh Frydenberg recently threw his weight behind the 2050 net-zero emissions target, warning failure to comply would hurt banks’ access to capital from foreign investors and consequentially raise borrowing costs.

Climate risk has become a key focus for financial markets and investors, with fund manager giants warning they will divest from companies that aren’t prepared. As a result, banks have signalled they are re-evaluating how they lend to or invest in certain sectors, such as thermal coal.

But Mr Canavan recently told Sky News that international financiers should not determine Australia’s energy policies and who local banks can lend to.


“What these international bankers are saying is, if you don’t have a zero emissions target we’re not going to lend to you. Well, we should tell them to bugger off because we’re an independent sovereign country,” he said.

“I think the independent nature of our country, our sovereign right to determine our own laws is a little bit more important than a few basis points on interest rates.

Later he continued: “Previous generations of Australians sacrificed their lives to defend our independence and if we’re asked to pay just a little bit more in our mortgage, I think we should probably do that.”

However, Mr Canavan faced backlash from rival party senators.

Labor senator and shadow minister for Queensland resources Mr Watt commented Mr Canavan had shown the Nationals Party was willing to hit consumers with a “mortgage tax”.


“The Nationals’ ideological prejudices show they are out of touch with Australians struggling with the rising cost of living,” Mr Watt said.

“The Nationals’ climate change plan is a clear and present danger to Australians. It will cost jobs, drive up power prices and impose a big, new mortgage tax.”

Senator Wong similarly took to social media to criticise the comments, tweeting a Coalition senator would “rather you paid more than act on climate” on Thursday (14 October).

Reserve Bank deputy governor Guy Debelle mentioned foreign investors’ concern around climate risk and the potential costs of capital in an address to the CFA Australia Investment Conference last week.

He referred to when Sweden’s central bank (Riksbank) dumped its investments in Queensland and Western Australian bonds over climate risks.

“There is a risk we will see more of these divestment decisions sooner rather than later,” Dr Debelle said.

During a parliamentary hearing earlier this year, David Gall, group executive for corporate and institutional banking at NAB warned legislators would have to be “very careful” and there could be unintended funding consequences if they mandated banks could not exit a sector, such as energy or resources.

Westpac chief financial officer Michael Rowland reported each of the major banks raises around $30 billion a year, with heavy reliance on foreign funders.

Foreign institutional investors also make up significant chunks of the big four’s shareholder bases, taking up around 25 per cent and 24 per cent for NAB and Westpac respectively.

The two largest shareholders are also consistent across each of the big four banks, which are US investment giants BlackRock and Vanguard.

Both fund managers, among other institutional investors, have committed to the net zero by 2050 goal.

BlackRock chief executive Larry Fink wrote a letter to all major CEOs, including the big four bosses, saying the fund manager would consider reallocating capital if companies didn’t have a long-term game plan for climate risk.

According to Mr Gall, around a quarter of NAB’s investor meetings have had a focus around environmental, social or governance factors, with questions around fossil fuel transition pathways and financing.

At the same time, regulators have also homed in on climate risk.

APRA has required the major banks to start stress-testing their operations and has plans to release its final guidance for managing climate risks before the end of the year.

ASIC has been working to establish reporting frameworks, which would require disclosure of material climate risks to investors.

Around 129 countries have committed to net zero by 2050, but Australia is not yet one of them.

[Related: EXCLUSIVE INTERVIEW: Federal Treasurer Josh Frydenberg on emerging from lockdowns, the economy, and the future of mortgage broking]

Labor slams Nationals senator’s climate ‘mortgage tax’

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Sarah Simpkins

Sarah Simpkins is the news editor across Mortgage Business and The Adviser.

Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.

You can contact her on This email address is being protected from spambots. You need JavaScript enabled to view it..

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