COMPERE: The Federal Government has accused Australia's big banks of letting their customers down. The Financial Services Minister Joe Hockey says banks are forcing people in regional Australia to take up new technology but is failing to properly explain it to them. Reserve Bank statistics show that while bank closures have slowed, banks are failing to cover the gap by opening alternate agencies. Mr Hockey told Fiona Reynolds that the government is being forced to fill the hole.
JOE HOCKEY: Some agencies are not providing adequate services. Some are just providing deposit taking and withdrawal services, they're not providing the insurance services, the mortgage services and the stockbroking services that are a part of modern banking.
FIONA REYNOLDS: So are Australians in regional areas being driven to Internet banking services?
JOE HOCKEY: Oh, I think Australians everywhere are being driven towards Internet banking. It's a new form of technology. We've seen the transition from face-to-face banking to Automatic Teller Machines. Now Automatic Teller Machines are being phased out for Internet banking. And we're all being driven by new technology. What we need to do is make sure that all Australia has access to that technology.
FIONA REYNOLDS: What would you like to see the banks do then?
JOE HOCKEY: I'd like to see the banks work closer with Telstra and other communications carriers to make sure that people in rural and remote Australia get access to the banking services that everyone should have access to. Internet banking is very exciting. It saves a lot of time. You don't need to travel to the bank branch to do it. If you can get cash out from a local EFTPOS at the bottle shop or at the newsagent, it's a lot easier than driving a hundred kilometres to a bank branch. So we've got to use new technology to service us rather than simply to service the commercial interests of banks.
FIONA REYNOLDS: As bank branches close, and it seems some are also cutting back their agency networks, what is the government going to do about it?
JOE HOCKEY: Well, the government has set up regional transaction centres which are being put in towns and very small hamlets that have no transaction centres at the moment. That's part of the solution. But the other part of the solution is that banks will continue to close branches. There is an inevitability about that. But they're suddenly realising that their bank branches are in fact a very valuable distribution channel for new services such as insurance and stock broking and broader mortgage services, and I think you'll see a continuing slowing trend in the close of bank branches, and perhaps expanding branches into other activities such as providing coffee shops, local opportunities for communities to get together, meet and have a chat about what's important in the local community.
FIONA REYNOLDS: Your government's ideology is to leave services to the private sector. But here you seem to be filling a hole left by the private sector.
JOE HOCKEY: Well, a true Liberal government and that's what I think we are provides opportunity for the private sector to grow, but at the same time you need to have a safety net there to make sure that where there are gaps, they are properly filled by government services. And in this case regional transaction centres are fulfilling an important role in places where there are no transaction centres. However, we always believe that the private sector can in the main do things better than we can. They can respond a lot quicker to what consumers want, and if we can give them a little push along, then we certainly will.
FIONA REYNOLDS: Is that really your job though?
JOE HOCKEY: Well, I think it's an important part of what being a Liberal is about. We accept that the private sector can do a better job than the public sector in a lot of areas, and that's been the great ideological battle of the twentieth century socialism versus capitalism. We believe that where the private sector does let the community down, it's important that the public sector that the government try and step in and help.
COMPERE: Financial Services Minister Joe Hockey speaking there to Fiona Reynolds.