ANNE WEBSTER:
I’d like to welcome Minister Michael Sukkar, Assistant Treasurer, amongst many other titles, and Senator Perin Davey who was here last week for a local forum to look at the regional banking closures and the issues that that actually effects and impacts on local areas. In Mallee we’ve actually now had thirteen closures. APRA had done a report that said we’d had twelve closures in the last five years. We know that at least another one has occurred in Red Cliffs and there are no big banks or banks period, in Red Cliffs. This is a local issue, it impacts people who live their lives everyday whether it’s small business, whether it’s schools, whether it’s locals just trying to do their local banking. Across Mallee we have the impact of people who have to travel many, many kilometres to achieve any banking outcome. We have local businesses who are carrying the banks responsibilities to manage transactions. Things like tap and pay, that they pay to actually provide as a service to local communities and it costs them. We heard last week at the forum, $1,000 a month for a local newsagent just to manage the banking for the banks. Obviously, this is a very important taskforce and I’m very pleased to have the Minister and Senator to manage that today.
MINISTER SUKKAR:
Great, well thanks Anne. It’s a great honour to be able to co‑chair the Regional Banking Taskforce with Senator Davey. This is the third meeting of the taskforce and one of the reasons why we’re here in Mildura is the fact that Anne has been so outspoken on behalf of her community about the level of expectation that her community has for access to banking services. As the third meeting today we’re now moving into the process of really fleshing out a number of the key themes that have come through in the more than 400 submissions that have been provided. We’re still working through those 400 submissions but in doing so a number of key themes have come through. As Anne said, it’s clear what the problem is. Over the last four years we’ve had bank branches in regional Australia reduce from 2,500 to 1,900 so about a 25 per cent drop in just that time. We know bank branches are closing not just in regional areas but in major cities as well as people move the majority of their banking services and transactions to online. But there are a number of individuals who find that transition to online banking hard. Even for those of us who do most of our banking online, there are still times, there are still circumstances where you do need that face‑to‑face contact, that advice, that branch to give you the service you need. Really the point of the taskforce is to come up with tangible expectations that we will be making clear to the banks on what regional communities expect. We’re working really co‑operatively with the banks and with a number of other organisations but in the end, we’ll be making very clear what our expectations are about the types of service, the level of service that regional communities deserve. I think the pandemic has shown us, if we didn’t need any reminding and certainly Anne and Senator Davey didn’t need reminding but if any Australians needed any reminding about how important regional Australia is, the pandemic has absolutely made that clear. That means as a centre of economic firepower which regional Australia is, it needs the banking service that match that. So that’s the objective of the taskforce. The reason we’re here today again is to really acknowledge and recognise that this area in the Mildura area but in the Mallee electorate more broadly, is a crucially important part of the Victorian and indeed the Australian economy and it needs banking services to support that. This taskforce will be of course look at these issues in the context of every regional community in Australia. We’ll be looking to report as soon as we are able. Again, we’re going through the 400 submission and continuing discussions today but the tangible recommendations we make, we are confident will make banking services in regional Australians even better. On that note, Perin, I’ll throw to you.
SENATOR PERIN DAVEY:
Thank you Minister and thanks all for being here this morning. I would like to thank Dr Webster as well for her proactiveness in this area, for raising the issues of the community. Also, for co‑ordinating a community forum that was held last week that I had the pleasure of attending and all the people who attended that. They came in with the right mindset, the right frame of mind, they spoke about the impacts on their communities of branch closures but importantly they also spoke about what gaps had been left behind and what ideas they had to fill those gaps. So, a very important forum was held last week. Dr Webster will be presenting that to the taskforce today so the banks will here it direct from her, the local government association, the small business association. The reason why this taskforce is so important, the reason why this taskforce will be different to the many other reviews that there has been on the finance sector is that we have the people around the table who will have to change the way they do business in order to make sure we fill those service gaps. They are there, they can help us develop the solutions that are practical, that are implementable and that will provide cash services going forward in our regions. It takes all levels; we need the co‑operation of these groups but I’m also going to raise it – I normally avoid these things – but I was horrified to read that the State Government has now declared an edict that their government organisations such as schools and hospitals must transfer their accounts into one of the big four. One of the solutions that we keep hearing from the communities is that community‑owned banking might be an alternative. Community owned banking provides an essential service sometimes when the big four move away. And to have a State Government actually dictate where these organisations can bank is undermining the potential for a regional area to find their own solution. I really would encourage the State Government to have a rethink because in areas like Red Cliffs where there is no big four, it will actually mean…there has been a steering committee in Red Cliffs in the past looking at a community owned bank. Well, they’re not going to do that if they can’t get some of these significant accounts like schools and hospitals. I think that’s a very interesting course of action for the State Government to take but it will exacerbate this move to closing regional branches which underpin our society.
We have heard that when people are moving away from the cities which they are doing, COVID has seen that shift, but one of the things people look is ‘what services can I get in a regional community?’ If there’s not a bank there, they’ll look at the next closest town. These sorts of services are what we need to look at. How we can provide them going forward, it might not be the traditional branch model but certainly there are a lot of good ideas coming forward. There won’t be a one size fits all, Australia is a very diverse society but there will be options and ideas that will suit different areas so I’m very excited. We are now at the point in the taskforce where we are actually looking at what are the recommendations that we’re going to develop. As the Minister said, we’re analysing all the submissions, the multiple submissions that include a Choice submission that had the highest number of survey responses they’ve ever had in the past. Lots of good ideas and it’s about refining those and seeing where we can make it work.
JOURNALIST:
On the news last night there have been closures again across the country and they’re happening again in metropolitan areas. It impacts elderly people in particular or anyone who’s not online savvy. The banks just seem to have a policy of closing whatever they want to maximise their profits. At what point should they have a social conscience and be shamed into doing the right thing?
MINISTER SUKKAR:
We’re not in this process seeking necessarily just to appeal to the good‑natured or good‑hearted aspect of banks. What we’re trying to do is demonstrate to them that regional communities need a couple of things. Firstly, where you’ve got a bank branch announced closure, the way in which that is managed is extraordinarily important and the transition of people to new services. Yes, we all recognise that we live in 2022 and the majority of banking services are done online but making it very clear that offering online services, whether it’s a FaceTime consultation with a financial adviser or some other person providing advice on a bank product, might not necessarily be what many people are comfortable with, we want that face‑to‑face service. Indeed, for older Australians who want to be able to go down with their passbook and withdraw x amount every week who might not even feel comfortable with an ATM. In their social license, there are expectations that we have as a government and I think we’re not just trying to appeal to their good nature, we’re making very clear as a government, we have expectations and whilst we don’t want to have to mandate or force anything, if we don’t see a voluntary movement in the direction that this taskforce is really directing the banks, then that is always an option available to us. We think regional Australians deserve the sort of banking services that all Australians do. I might add as someone whose electorate is in a suburban part of Melbourne, we’ve had that many bank branch closures now, I’ve lost count of them, even in my local area 25 km from the Melbourne CBD. It’s an issue that even communities in the city are grappling with and so this Regional Banking Taskforce I think will offer some recommendations that will probably even go further than regional Australia about what the service offerings are that banks should provide.
ANNE WEBSTER:
In Mallee, we have 30 per cent over 65 years of age. That’s a fairly large chunk of the population and even if online services and FaceTime – as the Minister is suggesting – were options, it’s also predicated on having good connectivity. When you’re talking about little towns down south, that is not necessarily available. There’s a lot of work to be done on this and an understanding of the global issues in this space.
JOURNALIST:
Going back to last week’s forum, did you find there were important insights and ideas when raised that you hadn’t heard before from submissions or the past forums at all?
SENATOR DAVEY:
Yeah, there were definitely some ideas. There were some ideas we’ve heard several times and there were some new ideas. Certainly, some new ideas for community groups as well. Something like a sort of community cash box type thing where it’s not an account but it’s secure because if you have a farmer’s market on the weekend or the footy club has the canteen running during the footy, at the end of the day, where can they put those takings that is safe and secure? Under the mattress is probably not a great idea so some sort of a locked box idea so that the cash part of our society which is not a day‑to‑day thing anymore but is definitely a weekend thing, can still be serviced. There were some good ideas as well for our senior Australians who have got the smart phone, they’re not necessarily comfortable with the smart phone. They don’t necessarily need a branded bank service, but they need an agnostic ‘can someone sit down with me and talk me through the process?’ Those sorts of ideas and how we work them into the recommendations, how we work them into filling the gaps going forward making sure no one is left behind. We know as one of the hardest hit demographics is the older Australians, we heard someone say last week ‘I only need a service for another twenty years, but it is making sure they’re not left behind in the process.
ANNE WEBSTER:
I think that’s an important point to acknowledge that the changes or the supports that regional communities may need are for our older demographic. It could be just a twenty‑year gap because generally speaking, people who are younger are managing online services reasonably well but again it’s something for the taskforce to be looking at.
MINISTER SUKKAR:
And in addition to the demographic challenges – as I keep saying – even for people who are really savvy, a couple of young journos here – I assume you guys know what you’re doing. There will be times where you do need that face‑to‑face service. It will be something a bit more complicated. It might be when you’re buying your first home or refinancing or whatever it might be. Something that you’re not necessarily going to do over the phone, that you actually want someone in your community who you know and trust and who can give you some of that advice and know how. That might only be once every five or ten years for most people, but you need to have that in a local community, in my view. I think to give the banks some credit – because we’re pushing them – I think they’re now giving it some thought as to how they can actually offer those intermittent services in a way that isn’t just someone driving down from Melbourne who you’ve never seen before who has got the bank brand on the shirt but nothing else, but actually someone who is identifiable with the local area. That I think is important even for the people who are really savvy.
JOURNALIST:
I was just going to bring that point up that the relationship in banking is the thing that’s disappearing. I know myself at the moment on the basis of dealing with someone at Westpac. If it was an online process it would be far more difficult.
MINISTER SUKKAR:
Agreed and look unfortunately with relationship banking and its demise is again not a regional phenomenon only. It’s happening everywhere, sadly. There are some things – we’ve got to be clear – there are some things we will seek to do in this taskforce and there are some things we can’t do. Some of the changes in banking that we’ve seen over the last twenty years, we’re not going to reverse those because they’re happening everywhere. What our expectation is that the service somebody gets in a major city, is within reason the sort of service or access to services that people in regional Australia need to have. Simple as that and the banks operate within a framework – particularly the big four – where a lot of regulation and the entire structure of our banking system advantages them greatly. There is a requirement that we are happy to impose on them as to how they service regional Australia.