Regional banking: Federal government response to bush bank closures still pending

Cash can still be used to pay for fuel and groceries, but cheques are doomed, according to a federal government plan.

Payment by cheques will be phased out completely by 2029 under a plan released by the federal government, which still hasn’t made its official response into the Senate Inquiry into regional bank closures.

Mandating use of cash to pay for essential items such as fuel and groceries was also included under the government’s plan revealed this week.

Despite the switch to digital banking, an estimated 1.5 million Australians still use cash to make more than 80 per cent of their in‑person payments.

But cheque usage has declined by 90 per cent in the last decade with many banks and financial institutions not issuing them to new customers.

The Senate inquiry into regional bank closures handed down its findings in May and made eight recommendations.

They included the government guarantee “reasonable access to cash and financial services for all Australians” and investigating the feasibility of a publicly-owned bank.

Senator Gerard Rennick sat on the inquiry into regional bank closures.

Senator Gerard Rennick, who sat on the inquiry, said the government was dragging the chain with its response.

“I’m not really sure why they can’t come up with a reply unless their reply is going to be part of a policy election pitch,” he said.

“The banks have got a very tight hold on these guys and it’s a concern because it should be out by now.

“I want a government bank where it’s run like a proper bank.”

Country Women’s Association Victoria president Jenny Nola said the closure of rural bank branches meant many regional customers were unable to escape eftpos fees.

“If you live in a larger town or a city, you have the option of going to the bank and withdrawing money,” she said.

“But if you’re in a small town and they’ve closed all the bank branches, you’ve got no other option but to pay the transaction fees.

“It’s hugely unfair on country people that the big banks force them to pay for a transaction charge to access their own money.”

More than 300 branches have closed in regional Australia since 2021.

At last week’s Victorian Farmers Federation presidential forum, leadership contenders Danyel Cucinotta and Brett Hosking both said they would take banks to task if elected next month.

“We are an expensive industry and it does require capital to get started,” Mr Hosking said.

“We’ve been talking for decades now in agriculture about how we encourage the next generation.

“The banks can step up in that regard.”

Ms Cucinotta said: “We want more young people in agriculture and the banks have to play a stronger role in providing those pathways into farming.”

More than 300 branches have shut across regional Australia since 2021.