Dollarmites scheme is broke and Commonwealth Bank can’t fix it
THE DOLLARMITES junior banking scheme, a staple of Aussie schools since 1931, is broke and it doesn’t look like the Commonwealth Bank can fix it.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
THE Dollarmites student banking scheme, a staple of Aussie schools since 1931, has been marked F for fail after fundamental changes forced by a consumer group.
Schools say the scheme run by the Commonwealth Bank simply isn’t worth it any more.
Now the fight is on over whose fault it is, whether other programs should take its place or if banks should be banned entirely from getting lucrative access to young children.
Previously, the more money kids deposited in their Dollarmites account, the more money Commonwealth Bank would give back to the schools’ Parents & Citizens association.
This year, that changed after consumer group Choice lobbied the Productivity Commission, saying the scheme was effectively a form of kickback commission to make schools encourage children to sign up with the bank.
OPINION: WHAT IT TAKES TO BREAK THE BANKS
The bank used to pay P&Cs $5 for each account opened and 5 per cent of every deposit but now pays $5 each time a student makes 10 deposits and an annual bonus starting at $100.
The changes mean some schools, such as Georges Hall Public near Bankstown, have lost 80 per cent of their Dollarmites funding.
“Under these changes we won’t keep running school banking, it just won’t be worth it,” Georges Hall P&C president Deborah Bennetts said.
“Our volunteers’ time would be better served chopping up fruit and vegies.”
NSW P&C Federation president Susie Boyd said: “ Parents volunteer thousands of hours to process deposits and sign up thousands of new customers for the Commonwealth Bank.
“We are looking at a fairer deal for our parents, potentially an opportunity for other banks to offer school banking.”
READ MORE: NAB staff falsified witness signatures on death beneficiary forms
Commonwealth Bank has had a virtual monopoly on the market since Dollarmites started 87 years ago, when it was still government-owned.
Choice believes all banks should be banned from schools.
“If banks genuinely want to fund school books, we are sure P&Cs would welcome no-strings-attached donations,” a Choice spokesman said.
It was calculated the bank makes $10 billion a year from more than half-a-million people involved in the program as kids who remain customers.
A spokesman said the new payment structure is better because it no longer links the value of kids’ deposits to school payment but still “encourages regular savings behaviour”.