Simplicity managing director Sam Stubbs Photo: Supplied / Simplicity
Banks are avoiding lending to mining companies to avoid risk - not to intentionally drive them out of business, an expert says.
Resource Minister Shane Jones has been attacking banks for cutting back on lending to fossil fuel businesses - calling them "woke".
He said banks in New Zealand were prioritising climate ideology over business and were overlooking that mining companies were operating "legitimate enterprises".
He claimed that they had made mining companies the victims of threats and bullying tactics and were trying to drive them out of existence.
Jones said he was not prepared to put up with such behaviour which he labelled "woke-riddled intimidation".
Head of KiwiSaver provider Simplicity Sam Stubbs said while banks were promoting their good intentions regarding the climate, he believed they had decided that mining in New Zealand was "a fairly risky business" that they didn't want to lend to.
Banks in Australia had lent billions of dollars to mining companies.
"The curse of our politics is that we have one government comes in and mining's off. The next one comes in and mining's back on again. That creates a risky lending environment for banks."
They preferred low-risk lending such as mortgages so they had been withdrawing from rural and business lending in New Zealand for quite some time.
"Mining would seem to be right at the edge of that risk tolerance."
Jones has suggested drafting a member's bill to force banks to lend to mining companies, however, Stubbs suggested it would be "extremely difficult" to enforce.
Banks could always find reasons not to lend to someone and it would be "very problematic" to force them to lend to a business.
Stubbs predicted there would be more choices available in the lending sector.
While the Trump-led administration in the US might lead to changes in approach from lenders there, he believed ethical considerations were important for a generation of investors and borrowers.
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