The government should set up a publicly owned bank to ensure Aussies in rural areas always have access to financial services, a Senate committee report has recommended.
Finding a bank branch, or even an ATM to withdraw cash from, is becoming increasingly difficult. And that’s in urban areas. Trying to find a bank is some regional areas is like looking for the proverbial needle.
Which is why the government’s Standing Committee on Rural and Regional Affairs and Transport was tasked with investigating banking branch closures in rural Australia and the effects they’ve had on regional access to banking services.
The committee handed down its final report last week and it has made a number of recommendations, including the call to set up publicly owned banks.
Now, for anyone older than about 30 the idea of a publicly owned bank is nothing new. This was the original mission of the Commonwealth Bank, set up by government charter in 1911 and then privatised in 1996.
What would a public bank look like now?
The report recommends the government establish the Regional Community Banking Branch Program (RCBBP). The main objective of the RCBBP would be to help underwrite the establishment of ‘community bank’ branches providing in-person banking services in regional, rural and remote Australia.
Local communities would be required to raise the initial capital to get their local branch off the ground, but government contributions could help lower the required amounts needed.
To help pay for the RCBBP, the committee recommends the government make alterations to the Major Banks Levy paid for by the big banks.
Bank@Post expansion
Another of the report’s recommendation was a major expansion of the Bank@Post program. Under this program, customers can conduct regular banking services at their local post office. Initially set up to cater to Commonwealth customers, the program has now expanded to include more than 80 financial institutions, including three out of four Australian big banks.
The committee wants the government to force the final holdout, ANZ, to partner with Australia Post to allow their services to be conducted through post offices.
Specifically, these agreements should include increased deposit limits to support small businesses, provisions for identification verification, and clarify issues around temporary account closures or multiple signatory requirements.
The committee suggests applying or increasing the Major Banks Levy to institutions who do not offer Bank@Post services.
What else did they recommend?
Besides opening a public bank, the committee recommends making the current voluntary Banking Code of Conduct, mandatory.
Under the code, banks would have to undertake ‘meaningful’ consultations with local communities and businesses before closing any branches. Banks are also required under the code to fund transition services for residents in the event a closure goes ahead anyway.
A simpler recommendation from the report is a request for the government to adopt policy recognising that banking and financial services are essential services, and need to be guaranteed and protected as such.
“The committee recommends that the Australian Government adopt a policy recognising access to financial services as an essential service,” the report reads.
“To this end, it should commit to guaranteeing reasonable access to cash and financial services for all Australians.”
Are you able to access a bank branch? Should the government classify banking as an essential service? Let us know in the comments section below.
Also read: Millions in danger of being ‘unbanked’
Banking through the post office makes a lot of sense. Everyone should have access to banking.