Treasurer's reply raises more questions on bank-stacked taskforce and APRA
Updated: Aug 15, 2022
An “open letter to the treasurer” published by The Regional last month drew attention to the plight of the South Australian town of Peterborough, which was suddenly thrust into the media spotlight when the Finance Sector Union announced the closure of its last bank. This is what Jim Chalmers had to say in return and DALE WEBSTER'S response to his response.
Dear Dr Chalmers,
Thank you for asking your office to take the time to respond to my “open letter to the treasurer” and their excellent work helping me to illustrate exactly how unfit-for-purpose the Australian Prudential Regulation Authority’s banking database really is.
I couldn’t have done better myself.
Below is your response in full with follow-up comment and questions.
1. The APRA Points of Presence database (ADIPOP)
Treasurer Jim Chalmers’ office:
Regarding APRA’s Points of Presence (POP) statistics, authorised deposit-taking institutions (ADIs) are required to submit their physical banking service information annually to APRA, which forms the basis of APRA’s POP publication.
APRA then performs a review of all data received, including querying of suspected errors with entities. As with all data submitted to APRA, it is ultimately the entity’s responsibility to ensure accuracy of reporting.
Thank you for explaining how APRA’s points of presence database works.
I am actually very familiar with it because, as a journalist, I have been directed to it over and over again by the banks when asking for details of their regional branch footprints. I have written extensively on how the database masks this information. (You would be aware of this if you read the other articles I provided links for.)
I also know that it is ultimately the bank’s responsibility to ensure accuracy of reporting and that under the Collection of Data Act 2001 there are quite hefty fines if they don’t.
Treasurer Jim Chalmers’ office:
The POP database includes two tables.
• Table one is a listing of each ADI’s physical point of presence by latitude and longitude, and the Statistical Area Level 2 (SA2) as defined by the Australian Bureau of Statistics. The latitude and longitude data can be used with a range of publicly available mapping software, such as Google Maps or Bing Maps.
• Table two includes a summary of table one, listing each SA2 areas’ points of presence.
Latitude and longitude coordinates have only been included in the ADIPOP data since 2017. For 16 years before that it was impossible to use the database to find out where a bank’s branches were located.
Their introduction has done almost nothing to improve public access to the information.
Google maps and Bing can only be used to find single locations and there are currently 14,327 points of presence listed in the ADIPOP database with no way of knowing where they are other than their state and population category.
A journalist reporting on – for example – the recently revealed closures of NABs at Tocumwal and Narrandera in NSW will want to see if there are any other banks in those towns so they can ask for comment on their future plans.
I invite you to look at the ADIPOP database and use the method you have suggested to get this information.
I can tell you now that you won’t be able to find it unless you set aside a very large chunk of your day to “Google” every single NSW “outer regional” and “inner regional” branch entry.
I reported on bank closures for one of the big news corporations for several years and software that enables sets of geo-data (any more than two locations) to be mapped was not available in the average newsroom. Even if it had been, it is not just a matter of dropping the data in; it has to be set up properly in a spreadsheet and you have to know how to use it properly.
The big question here is why are we even talking about this?
It is embarrassing for the Government that the Federal Treasurer’s office is telling a journalist how to work around the inadequacies of a database that was set up to improve transparency of the banking industry.
These are not commercial secrets – they are the locations of essential services on which people depend.
QUESTION: Do you think journalists reporting on bank closures in the public interest should be able to look at the official government data and identify the remaining service providers in a town or region that is losing a bank?
QUESTION: Wouldn’t it be far easier (and more sensible) to list the address of the banking “points of presence” in table one rather than muck around with latitude and longitude data? Or include it in addition to the geo-coordinates?
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Treasurer Jim Chalmers’ office:
“The relevant POP data for Peterborough - Mt Remarkable SA2 in South Australia correctly shows the area as having one bank branch, operated by Westpac. Westpac operates under several brands that may be referred to in their marketing materials: St George, Bank of Melbourne and BankSA. The single branch in Peterborough is only recorded once.
POP shows Peterborough – Mt Remarkable as having eight ‘other face-to-face’ points of presence and the two published tables are consistent. The SA2 area is quite large and covers many towns.”
The ADIPOP database was set up at the request of a regional banking inquiry (of which Anthony Albanese was a part) due to the absence of publicly available information on where banks were located. The aim was to establish a means that would basically sound the alarm when banking services got down to critical levels.
Peterborough again provides an excellent example of where the ADIPOP database is failing in this task.
It is a decent-sized town of about 1500 people but you are correct, instead of having a distinct identity, it is grouped in with the wider “Mt Remarkable” region so it is easy to mistakenly assume it has more services than it actually does.
When I checked (using mapping software) exactly where the Mt Remarkable area covers I discovered that it would take about two hours to drive from one side of it to the other. The extra “other-face-to-face” services are actually post offices in five towns that once also had banks but have been deemed not worth listing in ADIPOP data. (Boolooroo Centre, Terowie, Orroroo, Melrose and Wirraburra.) This is quite a common occurrence. I documented the case of Casterton in Victoria, a large service town that once supported four major banks and now has none. It also can’t be identified in regional ADIPOP statistics.
QUESTION: If the purpose of the ADIPOP database is to list all the “authorised deposit-taking points of presence” so service levels in towns, cities and suburbs can be monitored, wouldn’t it be common sense to include all the towns, cities and suburbs?
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Treasurer Jim Chalmers’ office:
The National Australia Bank’s (NAB) proposed future “cashless bank branches” would not meet the reporting definition of a branch for POP. Should NAB go ahead with their proposal, APRA expects these branches would be reclassified or removed from the following year’s reporting.
I’m sorry to say but these are not “future branches”. NAB has confirmed it has had a number of branches where customers can only access cash from an ATM for some time. These have been listed as branches in ADIPOP data despite not meeting legislated criteria. An example is the NAB branch at Broadbeach (Pacific Fair) in Queensland.
They also converted at least nine branches to cashless services across Victoria, NSW and Queensland in 2021-22. These were identified as a “cashless branch” on their website until my story, then the names were swiftly changed to “digital store-branch”. (Two are in regional Victoria at Waurn Ponds and Geelong.)
NAB is not the only bank that has already gone down this track. ANZ has had “tellerless branches” listed in the ADIPOP data since at least 2017 (see the now closed “branch” at 275 George St Brisbane in the latest data as an example).
QUESTION: Would the Treasurer like me to supply APRA with a list of all the incorrectly classified “branches” that I am aware of in the current ADIPOP database to assist in their reclassification and removal before the next edition is published later this year?
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Treasurer Jim Chalmers’ office:
A number of historical data resubmissions were made by ADIs and published by APRA in the June 2021 edition of POP. These revisions can be found in the historical data section of the publication. APRA only maintains the most recent version of the publication on its website. Previously published data can still be accessed using the Australian Government web archive.
The “historical data resubmissions” you refer to related to the removal from the Bendigo and Adelaide Bank branch network of more than 200 cashless Rural Bank sites that I blew the whistle on as being listed incorrectly for two decades.
APRA states in the ADIPOP publication that any significant revisions are identified and quantified in the “revisions” section of important notice tab. This, for example, happened in 2019 when APRA realised it had incorrectly included 853 post offices that at the time would have represented about a quarter of the Bank@post footprint.
The “revisions” to the Bendigo and Adelaide Bank network, as you have accurately called them, were even more significant than the Bank@post error, resulting in a 40 per cent change to the size of that bank’s regional branch footprint, yet they were not flagged as an important notice.
QUESTION: Why was such a significant revision affecting a bank’s service provisions not disclosed?
QUESTION: Was the Bendigo and Adelaide Bank issued with penalty notices under the Collection of Data Act 2001 for submitting incorrect information to APRA?
(The bank’s shareholders might like to know the answers to these questions as well.)
2. The Coalition’s Taskforce into Regional Banking
Treasurer Jim Chalmers’ office:
The Australian Government set up the Regional Banking Taskforce on 22 October 2021 to bring banks and other key stakeholders to assess how bank branch closures have impacted local businesses, industries and communities and work collaboratively to identify possible solutions. The Taskforce is:
analysing the trends in bank branch closures in regional and remote Australia
assessing the impacts of these branch closures on individuals, businesses, community organisations and regional industries (including business and land values) and determining
accessibility issues and wider impacts on communities from these branch closures for banking facilities, services and products
assessing how banks transition their services and delivery models to communities where they have closed (or will close) branches
identifying alternatives to bank branch models that would maintain or improve banking services and accessibility in areas where branches have been closed and potential solutions to overcome accessibility issues.
The Australian Government recognises the importance of branch closures in regional Australia for Australians and supports the Taskforce continuing its work.
This taskforce was established in the lead-up to the Federal election and was supposed to report in March, well before the cut-off date for the election being called.
The taskforce has just two politicians on it. Both are now in Opposition and both with shadow portfolios that have nothing to do with treasury, finance, business or regional Australia. (Michael Sukkar, Shadow Minister for Social Services, the National Disability Insurance Scheme, Housing and Homelessness) and first-term senator Perin Davey (Shadow Minister for Water and Emergency Management).
The rest of the taskforce is comprised mainly of representatives from the big banks. ANZ, Commonwealth Bank of Australia, National Australia Bank, Westpac, Bendigo and Adelaide Bank and Bank of Queensland all have been given a seat at the table. As has the Australian Banking Association (which represents the banks) and Australia Post (which provides agency services for the banks).
The three remaining representatives were two business groups, including the Australian Chamber of Commerce and Industry of which the peak body for finance institutions (including banks) is a member, and the Australian Local Government Association.
At previous inquiries most of these would have been forced into the witness stand and now they are running the show.
This taskforce held just one public meeting in a safe Nationals electorate and the “consultation” period ran for something like 30 days or even less.
Compared to the previous government inquiries on the issue that took around a year or even more to talk to and visit affected communities, this was an insult to regional Australians.
The “Taskforce into Regional Banking” is not only is totally unrepresentative of the government Australians elected in May, its terms of reference have the potential to do more damage than good by – as you pointed out – looking for “alternatives to bank branch models” rather than do what Labor members of the last regional banking inquiry in 2004 said was needed: the introduction of mandatory community service obligations if banks continued to close banks in regional Australia.
Labor actually went as far as saying it would reregulate the banking industry if required.
History shows that the last time the banks were endorsed by a Coalition government to implement “alternatives to bank branch models” regional Australia lost 200 bank branches in one hit with the introduction of Westpac’s “in-store” agencies and ANZ’s “local links”.
Five, maybe six, years later every single one of the “alternatives to bank branch models” would be closed as well.
The biggest risk presented by this bank-stacked taskforce is that it will come up with yet another beefed-up Australia Post model that falls short of it becoming a government bank in its own right.
Why? Because it will again lead to wholesale bank branch closures in regional Australia, which has lost two thirds of its banking network since 1975 and can’t afford to lose any more.
QUESTION: Why is the Albanese Government leaving such an important issue as providing essential banking services to regional communities in the hands of the Opposition party and the completely self-interested banking industry?
3. The subject the Treasurer chose to avoid
What hasn’t been addressed by the Treasurer is my main point that a bank can quietly close a branch in a community without having to tell anyone other than customers and the Finance Sector Union.
QUESTION: Do you think this is an acceptable situation, especially when it is the last or only bank in a town that is closing?
I thank you again for responding and hope we can continue this discussion.
Regards,
Dale Webster
THE REGIONAL
Independent news service for 37 per cent of Australia’s population (and growing)
Read the open letter to the Federal Treasurer: Time for a reset after union's bank closure media release sparks chaos