General News
5 June, 2024
Future of rural banks rests on major reform
Private banks have failed regional Australians, a Senate Committee inquiry into the impact of regional bank branch closures has found.
Speaking on behalf of voters in her electorate of Mallee, federal MP Anne Webster said she agreed with the finding that "regional Australians need reasonable access to cash and financial services".
“The final report found that without regulatory intervention, banks will continue to close branches and communities will pay the price," Dr Webster said.
"More than one third of regional bank branch services - almost 800 in total - have closed in the six years to June 2023.
"Half of the automatic teller machines in regional Australia have also closed."
The Regional Banking Taskforce looking into the issue visited Mildura in January 2022 and reported in September of that year.
In February 2023 Dr Webster called for a moratorium on regional bank branch closures, which she said the Commonwealth Bank accepted within a week.
Bendigo Bank nonetheless moved ahead with plans to close its Warracknabeal agency.
“The loss of services is so dire we must seriously consider the committee’s recommendation for a Regional Community Banking Branch Program comprising a public-private partnership to help local communities establish banking services," Dr Webster said.
"If that takes a miniscule increase in the 2017 Major Banks Levy, I support that because thus far regional Australians have only seen cuts, not improvements, from the money raised from the levy.”
Dr Webster said the Rural and Regional Affairs and Transport References Committee report also proposed meaningful consultation on bank branch closures, echoing a recommendation of the Regional Banking Taskforce in September 2022.
"Time and time again I highlight that corporations and government services do not consult meaningfully with regional communities," she said.
"Consultation is tokenistic at best with a premeditated and inevitable outcome.
"Banks and other corporations alike that threaten a negative impact on regional communities need to both consult and compensate in meaningful ways.
“Regional Australians must never forget that during the global financial crisis the Reserve Bank issued $73 billion in bonds through a guarantee scheme which at its peak covered $170 billion of bank liabilities.
"The RBA later determined those guarantees were worth an implicit $1.88 billion to $3.75 billion to the major banks, or $2.32 billion to $4.62 billion in today’s terms.
"Banks have a moral obligation to support all taxpayers for that assistance and should stop cutting services in regional Australia.”