Bank closures in regional Australia will be an election issue for the first time for years, as the findings of a Government inquiry are being handed down just before the Federal Election.
The Coalition Government is due to release a report into a whirlwind investigation into the growing problem next month, just weeks before the cut-off date for the widely-tipped May poll.
The reawakening of the issue for political advantage might backfire on the Government however, with an old divide threatening to overshadow any findings if it fails to take action to stop continuing closures.
That divide – a disagreement within the last government committee to look at bank activity in regional Australia – saw Labor Party members, led by Deputy Chair Senator Penny Wong, asking for a dissenting statement to be included in the final report (Money Matters in the Bush).
The last point in that statement reveals a philosophical difference over the imposition of community service obligations on banks as a way of ensuring towns are not left without an essential service.
While the report’s recommendations pulled away from forcing the banks’ hand on this, the Labor members stated that the ALP would support re-regulation of the banking industry if it failed to improve its performance itself and that certainly has not happened.
Regional banking: Basic facts
Regional Australia has lost close to two-thirds of its bank branches since the network was at its peak in the 1970s, according to lists published by the banks that have become the "big four" in 1975.
Numbers have gone from 2,802 banks in 1,126 regional locations to just 1,075 in 387 regional towns, cities and coastal communities in just over 45 years.
That is a loss of 1,727 bank branches or a cut of 62%.
ANZ now has the smallest regional bank network in Australia with just 194 of its original 615 branches outside metropolitan cities still open, a cut of 68.5%.
Westpac has the second smallest regional footprint after slashing 70% of non-metropolitan branches, leaving it with 231 from its original 777.
National Australia Bank has 315 regional branches still open but has closed 445, or 58.5 per cent of its original regional network of 760.
Commonwealth Bank is the only one of the "big four" that still has more regional branches open than it has closed, with 335 of its original 650 remaining open, a 48.5% reduction.
Banking by electorate
Going into the 2022 Federal Election, there are 146 regional towns across 51 federal electorates that only have one major bank.
Of these 37 are smaller communities that have only ever had one bank, but the remainder (109 towns/cities) have lost one, two or three ‘big four’ banks and are down to their last major banking service.
The most vulnerable of these have no other type of bank or franchise to fall back on if the remaining ‘big four’ closes.
There are 92 towns across 38 federal electorates in this position.
The majority (27) are Coalition-held seats.
The worst performing electorates on banks in regional Australia are the Victorian seat of Mallee and Grey in South Australia.
Mallee, which has been held by the Nationals since proclamation in 1949, has the highest number of towns most vulnerable to total loss of major banking services with 11 communities now in this position. (Stawell, Birchip, Hopetoun, Murtoa, Donald, Charlton (CBA); Ouyen, Cohuna, Jeparit, Rainbow and Edenhope (NAB)).
Eight of these towns have no minor banks to fall back on.
Mallee also has the second-highest number of towns that have already lost all services, sitting at 50 behind Grey on 62.
Grey, held by the Liberals since 1993, has nine towns down to their last major bank, with six of these without backup services (Cleve, Yorketown, Streaky Bay, Balaklava, Minlaton, Ceduna, Kimba (ANZ); Roxby Downs, NAB; and Coober Pedy (Westpac)).
The Queensland seat of Maranoa (Nationals) also has nine towns down to their last major bank (Mitchell, Quilpie, Cunnamulla, Winton, Miles, Clifton, Inglewood, Injune and Millmerran (all NAB banks) and 31 towns that have lost all major banks.
There are plenty of other electorates in similar situations, including Durack in WA, Lyons in Tasmania and Barker in South Australia.
Electorates that have already been decimated by bank closures and have a smaller list of towns with just one major bank remaining include Wannon in Victoria (a Liberal seat since 1955) which has 33 towns that have lost all banks and three down to their last (Lorne (CBA); Terang and Timboon (NAB)).
O’Connor in Western Australia (Liberal) is another banking desert with 46 towns having lost their major banks. Five towns have just one major bank – Kellerberrin, Kojonup and Corrigin, NABs; Quairading and Bridgetown, Westpac.
View Most vulnerable towns - save your last bank in a full screen map
Picking up the pace
Over the course of 2021, regional Australians were told that another 116 banks were being removed from their towns, cities and coastal regions.
The locations include 44 towns that have been stripped of their last or only major bank, including five towns that had two 'big four' banks close branches in the space of three months.
Of the 44, 22 did not have a minor corporate, mutual or franchise bank to fall back on. NAB was the worst offender on this front, leaving 13 towns in this position.
The biggest cuts were made by ANZ with 37 closures, followed by NAB and the Commonwealth with 35 and Westpac nine.
Based on these numbers, regional Australia’s banking network could be reasonably predicted to shrink by another 10 per cent in 2022.
Kicking the year off as the first towns to lose their last bank are Loxton in South Australia (Barker/Liberal), which saw an ANZ pulling out on January 12, and Mooroopna (Nicholls/Nationals) that lost a NAB on January 20.
Tannum Sands (Flynn/Nationals) will join them on April 22, just weeks from the predicted election date.
MPs on the coalface
Unlike the 2004 regional banking inquiry 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 taskforce to look at the issue and the close of public submissions.
The taskforce held 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 14km from Red Cliffs and also in the Mallee electorate.
Member for Mallee Anne Webster co-hosted the Red Cliffs forum.
Red Cliffs and another town in her electorate, Kaniva, both lost their last banks (CBA and NAB) in the same week in July last year. Rainbow joined the list of towns down to their last bank when its Commonwealth closed in April.
Asked what she was doing to try and save her electorate’s remaining banks, Dr Webster pointed to the work of the taskforce.
“It is looking for solutions,” she said.
Further, she remarked.
“One of the solutions, imperfect though it is, is for Australia Post to be providing some of those banking services. Clearly that is not as in depth as is needed – it doesn't give some of those complex banking services that a branch would – but does provide some and Australia Post are looking at how they can do that better.”
Dr Webster clarified that this option did not mean Australia Post would become a bank, which some of the minor parties are pushing for.
“No they wouldn't, they would be providing an alternative service,” she said.
Dr Webster said she would back the imposition of community service standards on banks so that towns would not be left without banking services.
“Yes, I would support that. It is quite reasonable to expect that banks should be ensuring that together, some level of service is provided, whatever that might be.”
Member for Lyons in Tasmania Brian Mitchell (ALP) has just seven Commonwealth banks left in his electorate and they are all in towns down to their last bank.
Lyons has lost all of its eight ANZ banks, all of its 11 Westpacs, both NABs and four out of 11 Commonwealth banks.
When the Commonwealth announced it would be closing St Mary’s only bank last year, Mr Mitchell launched a petition against the move, describing it in local media at the time as “a top-down, arrogant, out-of-touch decision from corporate headquarters”.
Recently, Mr Mitchell said:
I have of course been critical of the banks for stripping their services out of my towns, particularly when they leave behind no services or a @bankpost service that has limited commercial functionality.
Like my Labor colleagues of 2004 I'm open to a regulation requiring of banks a community service obligation but I'm also aware of the impacts such a requirement may have on corporate decision making.
More important than seeking to keep big banks in towns is ensuring we keep banking functionality, most particularly business cash needs.
Frankly, I'm agnostic about whether that servicing occurs in a bank branch, a post office or a servo, but we do need to ensure the functionality isn't stripped out.
Mr Mitchell said community service obligations were a last resort when banks failed to do the right thing by their customers.
I'd prefer there to be a private market solution because banking and finance is generally best delivered by the private sector, but the service is important enough to be considered essential and where there is market failure, there is a role for government to step in to ensure communities are catered for.
Maybe that even means considering some level of subsidisation if banks can demonstrate that keeping regional services is a drag on their bottom line.
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.
A map of regional banks in Australia is available here.
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