A GROUP of Coalition members have written to six Australian banks, urging them to follow the lead of American banks and pull out of the United Nations-backed Net Zero Banking Alliance.

The letter follows a move from the six big American banks, who have announced they are pulling out of the alliance in recent weeks. The banks were sent a letter from a group Attorney Generals in the United States, who were pointing out that their membership with the organisation could be in breach of the country’s “anti-trust” laws as they were potentially working together to restrict finance.

Senators Matt Canavan and Alex Antic, along with MPs David Gillespie, Garth Hamilton, Terry Young, Henry Pike, Colin Boyce and Llew O’Brien are now urging Australian banks to do the same. They pointed out that in recent weeks, Canadian banks have followed.

Australia’s big four banks, along with Bank of Queensland and Macquarie Group, are all still involved in the alliance.

The Coalition MPs say that by continuing their membership in the alliance, the banks are risking hurting the competitiveness of Australian businesses – including agriculture.

“We note that the US is the largest foreign investor in Australia, and Canada is the eighth largest,” the letter read.

“(Your bank’s) membership to the Net Zero Banking Alliance requires you to place large restrictions on lending that put Australian farmers, miners and factories at a disadvantage relative to their North American competitors.

“Moreover, relative to the United States economy, the resources and agricultural industries are a much bigger part of our economy. Therefore, (your bank’s) continuing net zero lending restrictions risk hurting Australia even more than the same restrictions would in the United States.”

With Australia’s economy currently in a high inflation cycle, the MPs are urging to banks to focus on improving the economy rather than pursuing political agendas.

“We hope that you heed our call to turn our focus towards how we can improve Australia’s economic performance and return our financial institutions back to their core goal of facilitating economic activity instead of pursuing political change,” the letter said.

Coalition critical of banks

The letter is the latest in a series of criticisms the Coalition has made about the direction Australian banks are heading in.

Opposition leader Peter Dutton has been critical of a decision by several banks to not lend to a Tasmanian forestry company. Mr Dutton has repeatedly said to other media that banks should only be focusing on the ability of companies to service debt and the leave the politics to politicians.

Mr Dutton was asked about the subject on a podcast with Sydney businessman Mark Bouris.

“With the banks, I think they have a household brand and an iconic brand that has been supported by generations of Australians – with a big pay cheque,” he said.

“I don’t begrudge that at all, but it comes with a moral obligation to give back to our country and do what is right. If the Government of the day decides that logging in Tasmania, or salmon farming in Tasmania, is a legal activity, then why do the banks decide they have a higher calling to stop lending to that business?

“They should be looking at the creditworthiness of the applicant, they should be looking at the equity position, they should be looking at the cashflow and making a decision as to whether that person is bankable or not.”