DEAR DR CHALMERS,
We need to talk about Peterborough.
It’s a town in South Australia. Last week, it found itself in the national news for the first time since Bob the Railway Dog died in 1895, when the Finance Sector Union named it as a community that was losing a Westpac bank.
It has a BankSA and no one had heard a thing about its potential demise.
In subsequent media reports, Peterborough was on some lists of towns losing banks, while in others it was absent.
Residents were very confused and I’m not sure they are any clearer about what is happening now.
The authorised deposit-taking institutions' points of presence (ADIPOP) database journalists are routinely pointed to when they ask banks about their branch footprints is managed on your behalf by the banking regulator, the Australian Prudential and Regulatory Authority (APRA).
Looking at it is generally a fruitless exercise for reporters because the main thing they want to know is what banks are left in a town, but the database masks this information by splitting the data into two separate tables. It is possible to see services in a location, but the names of the banks providing them are not identified.
Out of curiosity, I checked what APRA had to say about Peterborough.
Table two, which lists locations and how many of the different types of service channels they have, shows Peterborough has one major bank branch, eight ‘other face-to-face’ banking services and one ATM.
Table one, which contains the geographical coordinates of the sites of all banking service channels (branches, other face-to-face and ATMs listed under the corporate owner, not bank brand), is of limited value except for getting numbers of services in different levels of Australian Bureau of Statistics remoteness classifications.
However, I dropped the coordinates into mapping software, which most journalists or members of the general public don’t have access to.
What I found was that, according to information provided to APRA in June 2021, there are just two ‘other face-to-face’ services in Peterborough (Bendigo and Adelaide Bank and Bank@post at the post office), as well as one Westpac bank and one Westpac ATM.
Point one: The numbers in the two tables should line up.
Point two: This database was set up 20 years ago at the request of a banking inquiry of which Prime Minister Anthony Albanese was a committee member. It is a legislated requirement of the banks’ licences to provide accurate information to APRA for the purposes of keeping these records.
All Mr Albanese and his colleagues asked for was a system that would shine a light on what the banks were doing and where — particularly in regional Australia.
This has not been delivered.
The information in the database, as evidenced above, can’t even be trusted.
I revealed last year that there are some classification errors in the ADIPOP data that date back 20 years.
These were quietly corrected by the Bendigo and Adelaide Bank and APRA after my story was published.
There are still other errors that need fixing, as well as a new issue APRA chairman Wayne Byres was questioned about by Senator Malcolm Roberts in the last Senate Estimates hearings — cashless bank branches being rolled out by NAB.
Mr Byres confirmed that these had no place in the branch lists of his ADIPOP database.
The submission date for banks to report their points of presence to APRA for this year’s release of ADIPOP data has just passed and the regulator now has three months to get the information into shape for its annual publication in October/November.
There will be a lot of people watching to see if the errors in both classifications and geo-coordinates that have been identified will be corrected.
The problem – for you, Dr Chalmers – is the impact the correction of these long-standing errors will have on regional banking statistics that have come from this database over the years.
Will the Government and APRA be transparent in communicating that the numbers have changed?
APRA hasn’t to this point, even though adjustments affecting 40% of the Bendigo and Adelaide Bank’s network have been made to not only the 2021 data, but several years retrospectively.
Perhaps this presents a good opportunity for a reset.
It has been 17 years since the issue of regional bank closures has been looked at properly.
The final words of the Money Matters in the Bush report released in 2004 were from the Labor members of the Senate Committee, led by Foreign Affairs Minister Penny Wong, who stated Labor was prepared to re-regulate the banking industry if it did not take its community service obligations in relation to maintaining service levels seriously.
My research has shown that since then, the regional banking network has shrunk to a third of what it was at its peak during the 1970s.
As the NSW Member for Murray, Helen Dalton, brought to your attention before the Election, there are now 578 towns and cities that once had one or more major banks with no form of a bank at all.
Another 145 towns and cities have just one “big four” bank, with 91 of these without any other form of a minor bank as a back-up.
Last year, 113 regional branches were closed: 45 of these were in towns that were told they were losing their last “big four” bank, including five that had two “big fours” close branches within three months of each other. Of these, 23 did not have a minor corporate, mutual or franchise bank to fall back on. NAB has left 13 towns in this position.
As of July this year, 33 branches have been closed, possibly slowed down by the Election but likely to ramp up in the second half.
ANZ has the smallest regional network now with 190 branches (a cut of 69% since 1975), Westpac has just 218 regional branches left (a cut of 77%), NAB has 308 branches (a cut of 59.5%) and Commonwealth has 332 branches left (a cut of 49%).
Most of the remaining branches are clustered in larger locations, creating a gaping divide between over and under-serviced communities.
Peterborough’s last bank can still be saved if the Federal Government calls for an immediate moratorium on branch closures while it looks into the issue through a new senate inquiry.
It would be an opportunity to revisit the ADIPOP database and examine why it has never nailed the brief it was given and what deals were done behind the scenes to allow banks to hide their branch footprints.
The Australian Banking Association’s “legally enforceable” Branch Closure Protocol, again the result of a banking inquiry, also needs to be scrutinised by the Labor Government after being interfered with by the Howard ministry and re-written so many times it offers no protection at all for vulnerable communities.
Finally, if banks were required to tell the Government they were planning to shut down what all previous banking inquiries have agreed is an essential service, it would see an end to the ridiculous situation where the only official channel for reporting bank closures is through a union, which selectively uses the information for scoring points against particular employers, resulting in the sort of chaos seen last week.
Towns like Peterborough deserve better.
If you would care to take the time to look at the stories I have written on this subject, Dr Chalmers, the links are below.
For my reporting on this subject, I have received this year’s Quill Award for Rural and Regional Journalism (Melbourne Press Club) and the June Andrews Award for Freelance Journalist of the Year (Walkley Foundation), which is the highest award possible for freelance journalism in Australia.
- ‘Big four’ banks casting a dangerous shadow: Are cashed up and bankless towns just watching the money go round and round
- Why I spent a year counting every bank in regional Australia
- What anyone making a submission to Australia’s latest regional banking inquiry should know first
- Regional banking inquiry reopens political divide
Cashless banks and APRA:
- NAB downgrades branches to cashless services
- Banking regulator fixes long-standing errors but bank data doesn't add up
I highly recommend you read that last one before the next Senate Estimates sittings.
Dale Webster is an inaugural recipient of a Walkley Foundation Grant for Freelance Journalism on Regional Australia. She publishes independently through her own title, The Regional. You can follow Dale on Twitter @TheRegional_au.
- Regulator rights errors but bank data doesn't add up
- Big Four banks casting a dangerous shadow
- Odds on regional banks will be gone despite inquiry
- 'Piggy' banks rack up rural closures
- Banking corruption continues despite parliamentary inquiries
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