Senate to hold first regional banking inquiry in 19 years
Updated: Aug 24, 2023
A MOTION to hold Australia’s first parliamentary inquiry into regional bank closures in 19 years has passed through the Federal Senate this afternoon.
The new inquiry will look at the economic and welfare impacts of branch closures in regional Australia, as well as the process banks are following to close branches and reasons being given.
The inquiry has been referred to the Rural and Regional Affairs and Transport References Committee, which will report back to parliament by December 1.
The terms of reference are to report on the extent of bank closures in regional Australia, with reference to:
(a) the branch closure process, including the reasons given for closures.
(b) the economic and welfare impacts of branch closures on customers, and regional communities.
(c) the effect of bank closures or the removal of face-to-face cash services on access to cash.
(d) The effectiveness of government banking statistics capturing and reporting regional service levels, including the (APRA) Australian Prudential Regulation Authority's authorised deposit-taking institutions (PoP) points of presence data.
(e) consideration of solutions
(f) any other related matters
The motion passed through the Senate with no division just after 4pm this afternoon.
Senator Rennick said assessing the economic flow-on of bank closures for individuals, businesses and communities in regional Australia would also be a priority, along with the effect of bank closures and banking policy on access to cash.
“For rural areas where there are high levels of unemployment and an elderly population with a reduced capacity to travel, the financial and time costs of banking borne by the consumer are significant,” he said.
“In particular, I am concerned about the impact closing regional branches will have on local business and their inability to deposit cash. With youth crime out of control in many regional areas, businesses don’t want to be become targets of delinquents looking for some easy cash.
“Banks have a social licence to provide banking services to all Australians regardless of their location. They should honour it.”
Senator Rennick highlighted the more than 80 regional banks to have closed or have closure notices issued since the final report of the lightning, pre-election Regional Banking Taskforce investigation was released by Assistant Treasurer Stephen Jones on September 30.
“The Regional Banking Taskforce, an initiative of the previous Coalition Government that brought banking representatives to the table, laid the groundwork for this inquiry, with submissions revealing a range of important economic, social, ethical and legal issues that need to be further explored,” he said.
Speaking in the House of Representatives yesterday for the second time in two days, the Member for Gippsland Darren Chester said the big four banks were showing contempt towards all customers but particularly those in regional Australia.
“In September last year, the Regional Banking Taskforce released its final report, and that task force analysed the trends in bank branch closures in regional and remote Australia,” he said.
“The report identified the obvious and disproportionate impact that branch closures have already had on vulnerable Australians. We're talking about the elderly, low-income earners, people from Indigenous backgrounds and people with poor digital literacy.
“They all strongly prefer face-to-face transactions and bank services. The banks know all this; they just don't care.”
Mr Chesters went on to call out the Australian Banking Association for hypocrisy.
“Among the task force's key recommendations was for the banks to establish a process for conducting and publishing regional branch closure impact assessments by the middle of 2023,” he said.
“The Australian Banking Association even had the audacity to agree, and I quote from a media release from the association dated 30 September 2022: ‘The Australian Banking Association today welcomed the release of the Regional Banking Taskforce Final Report and will work constructively to implement its recommendations. ABA member banks appreciate the government's considered work to help ensure the ongoing accessibility of banking services across Australia and are committed to continuing to serve their customers that live in regional areas’.
“Well, that's complete bulldust.
“I'm advised that, since that media release was issued, there have been 86 announced bank branch closures across the country.
“The banks appear to have used this report and this particular recommendation as a signal to fast-track closures before any further transparency or impact assessments are required.”
The last senate inquiry into this issue reported in 2004 when the Money Matter in the Bush report was tabled.
Two thirds of regional Australia’s ‘big four’ banks have been closed since 1975, with just 964 remaining.
UPDATE, Friday February 10: AUSTRALIA's banks have been asked to hold off on any planned branch closures until the Senate committee investigating the issue reports back at the end of the year.
ABOVE: Senator Matt Canavan cites the number of bank closures since the Regional Banking Taskforce report was released (reported exclusively by The Regional) as the reason for the new inquiry.
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