Senate push to limit bank branch closures in regional Australia

Regional Australians worried about banks deserting their towns may get a lifeline from a new government report.

Access to banking should be declared an essential service and the federal government should investigate establishing a publicly owned bank to ensure people in the regions keep bank branches, a Senate inquiry report says.

The twice-delayed report on bank closures in regional Australia also wants a mandatory code of conduct and regulations that make it harder for banks to shut down branches, after the big four reportedly closed almost 400 between them nationally last year.

It says all banks should be required to sign on with the Bank@Post service with Australia Post to provide banking services through post offices, a deal that ANZ has previously refused amid claims its flat fee regardless of bank size was an unfair cost.

The Senate Committee report, which received 608 submissions and held 13 public hearings across all states, also wants an increase in the Major Bank Levy, introduced in 2017, to help fund a regional community banking program.

Australia Post could be involved in more regional banking, the inquiry’s report suggests.

Queensland Nationals senator Matt Canavan, the committee’s chair, said the major banks had not acted in good faith over branch closures in regional towns.

“There now needs to be a stricter and more proactive approach to rebuild financial services in the bush,” Senator Canavan said.

“The major banks have been a principal reason why there is a ­financial desert in so many country towns.” A key report recommendation is that the government commissions an expert panel to investigate the feasibility of establishing a publicly owned bank.

“In investigating this, the panel should examine options including but not limited to a stand-alone public bank or one associated with, and using the branch network of Australia Post,” it says.

It says the mandatory new code would require banks to consult with communities before closing branches, report on the impacts and alternative financial ­services, and pay for transition ­arrangements and ongoing services to ensure access to cash after a closure.

“The committee recommends that the regulator be authorised to approve or defer any closure request,” the report says.

Beyond Bank Australia CEO Jake Bromwich said bank branch closures had a ripple effect on regional communities.

“Regional banking is under real and ongoing pressure and, clearly, there is a move towards digital banking,” he said.

“However, that doesn’t mean branches should just disappear.”

Senator Matt Canavan. Picture: Dan Peled / NCA NewsWire

Jake Bromwich, CEO of Beyond Bank Australia. Picture: Supplied

Mr Bromwich said regional bank branches were about far more than transactional day-to-day banking. “They provide a tremendous amount of value in terms of relationship banking, wealth management and financial wellbeing for customers,” he said.

Finance Sector Union national secretary Julia Angrisano said the recommendations were in line with what finance workers and communities had been calling for.

“This means banks will have to provide a genuine rationale for closing branches before it happens and to genuinely consult with the communities they serve,” she said.

“The recommendation for a regulator to approve or defer any closure request also means our banks will no longer be able to self-regulate on this issue, something we have seen fail repeatedly.”

Additional reporting: NCA

Originally published as Senate push to limit bank branch closures in regional Australia