Greens post radical plan for Aussies to have an RBA account

A LOW-RISK “People’s Bank” would be established for Australians to deposit money with Australia Post and have it managed by the Reserve Bank under a radical new policy from the Greens.

A LOW-RISK “People’s Bank” would be established for Australians to deposit money with Australia Post and have it managed by the Reserve Bank under a radical new policy from the Greens.

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Embattled leader Richard Di Natale will use a speech to the National Press Club on Wednesday to argue the “basic” banking service would help smash the power of the big four banks.

Senator Di Natale will argue the “People’s Bank” — similar to New Zealand’s successful Kiwibank, which has broken the Australian-owned majors’ dominance there — would turn around the decline in home ownership rates.

The Greens leader will also push for government to ­become “more active and more interventionist”, and argue for a universal basic income to ­address inequality.

Under the banking proposal, ordinary Australians would be able to establish ­accounts ­with the ­Reserve Bank of Australia for day-to-day banking.

And:

CUSTOMER service would be provided online, by telephone, or face-to-face through Australia Post and other partners;

SAVINGS accounts would be pegged to the RBA cash rate, with debit cards linked to these accounts also available;

HOME LOANS would be capped at $500,000 for owner-occupiers with repayment terms over a maximum of 30 years;

STRICT lending standards would be established that require a genuine evaluation of capacity to pay and that take into account a mortgagee’s proximity to retirement;

A MINIMUM interest rate would be set at 3 per cent plus about 0.5 per cent for administration costs;

LENDING would be restricted to a loan-to-value ratio of 60 per cent to ensure that the risk to the public was minimised.

Greens Leader Senator Richard Di Natale. Picture Kym Smith

Senator Di Natale will propose the bank would also have first call on the proceeds of the sale of a property in the result of a mortgage default, meaning that retail banks who lend any additional amount will carry nearly all of the risk.

He will also argued the Turnbull Government’s bank levy does not go far enough, suggesting it should be raised from 6 per cent to 20 per cent so the public was “adequately compensated for the cost of insuring the major banks”.

He will add: “A People’s Bank, and more support for co-operatives and mutuals, would inject some real competition into the banking sector.”

A similar push by six influential economists in 2009 received the support of the Australian Council of Trade Unions and then shadow treasurer Joe Hockey, but was ­rejected by then treasurer Wayne Swan.

The speech looms as critical Senator Di Natale’s leadership following a string of disappointing election results, including in the Melbourne seat of Batman last month.

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