One critic, Brian Egan from charity Aussie Helpers, says he's asked every day why so much money heads overseas, while One Nation leader Pauline Hanson has called for aid to be redirected to rural areas.

Mr Turnbull says foreign aid, which is about 0.8 per cent of the budget, is an important part of Australia's diplomacy.

"We have been criticised for not increasing it to higher levels," he told Mix radio in Perth on Friday.

The federal government announced $12,000 in grants for each affected farming family, as 100 per cent of NSW was this week declared impacted.

Agriculture Minister David Littleproud said aid money actually helps farmers with trade.

"We put $300 million into foreign aid in Indonesia, but the reality is we're making $3 billion worth of trade in agricultural products to Indonesia," Mr Littleproud said.

Former Nationals leader Barnaby Joyce is also defending foreign aid but calling for more water infrastructure.

"We need to have support of island nations around us otherwise the Chinese government will just move in there and support them and then you'll have another type of problem," Mr Joyce told reporters.

He is pressuring the premiers to meet in the heart of the drought-stricken area to develop a solution for what he's labelling a natural disaster.

Financial relief for farmers is now also coming from the banking sector, with all major lenders agreeing to let them offset money put away in good times against funds they've borrowed.

The National Farmers' Federation on Friday praised the move, saying banks had a duty of care to ensure financial pressure on farmers did not become unreasonable.

"A farm management deposit is an important tool in bolstering the overall resilience of farm businesses, when challenging periods, such as drought hit," president Fiona Simson said.

Westpac and ANZ were the last two to hold out but on Thursday joined the Commonwealth, Rabobank, NAB and Rural Bank in falling in line.

Westpac will now offer an interest adjustment for customers with farm management deposits to effectively offset balances against eligible business loans.

The $100 million fund will provide loans of up to $1 million to existing agribusiness customers at discounted variable interest.

Drought-affected farmers with Westpac will also be able to defer principal and interest repayments for up to 12 months on existing loans.

ANZ is offering $130 million in discounted loans and waiving fees for restructuring business loans.

Labor leader Bill Shorten, who was in drought-hit Queensland on Friday, promised to hire 100 extra Centrelink workers and community response officers to help farmers if he wins the next election.

The government has invested in rural financial counsellors to help farmers access drought support but the application process has come under fire, with the paperwork seen as a hurdle.

Australian Associated Press