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Inquiry into regional banking no more than cruel election stunt

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Despite public anger, Australia's Big Four continue to close regional banks (Screenshot via YouTube)

Sneakily released by the Albanese Government recently, the much-awaited Regional Banking Taskforce report contains nothing that will save a single bank. Dale Webster reports.

REGIONAL AUSTRALIANS found themselves the butt of a nasty joke at the weekend, with both the Federal Government and Opposition treating them like idiots over the critical issue of bank closures.

In the ultimate dodgy trick, the final report of the Regional Banking Taskforce was snuck out at 4.52 pm on a Friday evening before a long weekend by the Albanese Government, despite the report being a Coalition document overseen by two Shadow ministers (Michael Sukkar and Perin Davey) whose current portfolios have nothing to do with treasury, finance, business or regional Australia.

As predicted by The Regional when this task force was set up, the final report contains nothing that will save a single bank, with the executive summary’s admission that it received more than 400 submissions 'on ways of maintaining and improving banking services' illustrating that the entire exercise was, as the Financial Sector Union described it, just a 'cruel stunt'.

The seven recommendations are an insult to the intelligence of regional Australians, with the report sharing insights on the issue of regional bank closures that read like a Play School episode, saying:

  • banks can do more to communicate and consult with individuals and communities when closing a regional branch;
  • when branches do close, alternatives like Bank@Post can assist to maintain banking services;
  • it is important to maintain access to cash, which is crucial for many in regional Australia; and
  • people experiencing vulnerability face particular challenges and need support in accessing banking services.

The rest of the content could be from a chairman’s message for any of the major banks’ annual reports over the last 20 years.

It regurgitates without challenge the claim banks constantly make every time they close a branch that over-the-counter transactions have declined. Had the Financial Sector Union been given a seat at the table as it requested but was denied, it would have told the MPs that bank staff have been given performance targets to move customers away from teller service and onto ATMs for years.

Reduced opening hours have also impacted customers’ ability to even get in the door of their local banks.

On the face of it, recommended changes to the Australian Banking Association’s branch closure protocol make sense unless you already know the contents of the document and its history.

The task force merely repeats what the previous regional banking inquiries Money too Far Away (1999) and Money Matters in the Bush (2004) put in place but was largely ignored by the banks due to an "if viable" caveat being inserted by the Howard Government at a later date.

By releasing this report, the Albanese Government has only drawn attention to Labor’s alternative 'Recommendation 30' from the 2004 inquiry, stating it would be prepared to re-regulate the banking industry if the banks did not implement and meet community service obligations under the protocol.

Since then, regional Australia has lost another 1,000 branches, so it could hardly be claimed that the banks have shown any sort of social conscience.

Rather than the task force’s wishy-washy recommendations (one and two), there should have been a calling-to-account of the banks for their complete disregard for the 'Money Matters in the Bush' report.

The task force also appears to be unaware – probably due to the lightning speed at which it conducted this inquiry to score a few points in the run-up to the last Federal Election – that branch closure protocol is legally enforceable.

It also could have recommended that the document be redrawn as a proper contract by independent lawyers and taken out of the hands of the banks, who have self-managed the behaviour standard since it was implemented.

'Recommendation four', which covers access to cash, gets to the heart of why communities need banks and is another missed opportunity.

Like the two regional banking inquiries before it, this report suggests beefing up post office banking, falling short of creating a new government bank because the task force – let’s again remember that it was mainly made up of banking representatives – held 'significant competitive neutrality concerns'.

Just to translate that into plain English, the banks are worried a government bank would be more popular than their own branches (and they would lose customers), a concern banks have expressed to banking inquiries on this subject as far back as 1985.

This section also makes the bold statement that remote Indigenous communities alone should have access to fee-free ATMs. What about people in the 587 towns that once had one or more major banks that now have no form of a bank at all?

'Recommendation seven', to review the Australian Prudential Regulation Authority (APRA) points of presence data, should trigger alarm bells for regional Australians.

Phrases such as 'to better understand and plan the transition away from branches' reveal the major banks’ true agenda and have been published as a fait accompli by this task force.

This recommendation will actually help the Government and APRA out with a little problem they now have in relation to errors in the "authorised deposit-taking points of presence" data, some going back years.

APRA chairman Wayne Byres was backed into a corner at the last Senate Estimates over the database misclassifying bank “branches”. Treasurer Jim Chalmers has also since confirmed that bank sites which do not provide face-to-face cash services do not have a place in the Government branch lists.

With another 148 “branches” that do not meet that criteria now identified across both metropolitan and regional APRA branch lists – and even more in the planning stages as banks move away from teller service – the corrections are going to play havoc with banking service level statistics — unless the Government follows 'Recommendation seven' and shakes the whole classification system up by introducing new service channels to the database.

One of the reasons the Albanese Government may have released the Opposition's recent report in such a shady way is becoming clear…

It is no surprise that this report has missed the mark by a long shot.

Unlike the Money Matters in the Bush inquiry (2004) that held 13 public hearings in six states and territories and took 18 months to complete, there were just 54 days between the announcement that the Coalition was forming a task force to look at the issue of regional bank closures and the close of public submissions.

The task force held just one public forum at Red Cliffs in Victoria (Mallee/Nationals) and two “by-invitation” meetings at Orange in NSW (Calare/Nationals) and Mildura, which is 14 kilometres from Red Cliffs and also in the Mallee electorate.

It was never more than an election stunt.

There is currently an open parliamentary petition calling for an immediate moratorium on regional bank closures – the launch of a new inquiry – to pick up from where Money too Far Away and Money Matters in the Bush left matters and to pulp any reports that come from the Coalition’s regional banking task force.

Treasurer Jim Chalmers must respond when it is tabled.

Regional Australia is down to just 1,011 major banks — a figure the taskforce had (or close to it) but chose not to reveal in preference to a much broader and rosier number provided by APRA.

A new inquiry would hopefully give regional Australians a fair go at saving their last banks and possibly even getting some new ones.

The petition – 'EN4244' – closes overnight on Wednesday 5 October (12.59 am, 6 October). You can click here to sign.

This article is Part 6 of a series — you can read Part 1 here, Part 2 here, Part 3 here Part 4 here and Part 5 here. Interactive maps charting a breakdown of bank closures via electorate can be found here.

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.

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