22 November 2021

Interview with Stephen Cenatiempo, 2CC Canberra

Note

Topics: Regional Banking Taskforce

Stephen Cenatiempo:

The Federal Government is doing some good work. They’ve setup a taskforce to investigate something we’ve been talking about quite a bit on this program and that is the closure of bank branches in regional and rural areas. Not only rural areas, here in Canberra we’re seeing a number of bank branches close which is putting a lot of particularly elderly Australians in a compromising position. Aussies are encouraged to make submissions to this taskforce over the coming weeks. The man behind it is the Federal Assistant Treasurer, Michael Sukkar, and he joins us now. Michael, good morning.

Minister Sukkar:

Good morning, Stephen. Great to be with you.

Stephen Cenatiempo:

This is a real problem and I guess, from a government perspective, you’re kind of a little bit between a rock and a hard place because banks are private businesses and they can effectively do what they want. How do you attack this?

Minister Sukkar:

Well, Stephen, what we’re really trying to do is bring the banks together with other important stakeholders – Australia Post, a lot of the small business groups, the Australian Local Government Association – bring them together and see firstly what is driving some of these closures and that will inform whether we can do something about what drives the closures to start with. Then secondly, what can be done to continue to offer these services potentially in a shared way? You can imagine circumstances where there are regional areas, small country towns, where it might not make sense to have more than one bank branch or one place that provides that service. Australia Post has done some great work over the years in that respect. We really are going in with an open set of eyes on this to hear from everybody what the solution is because ultimately what we want is that the service continues to be provided at a local level because as you rightly point out, there are groups of Australians who still really heavily rely on their bank branches and we want those branches to be available to them.

Stephen Cenatiempo:

Particularly with banks, it’s not a profitability issue because we know that the big banks – particularly the big four – are making huge profits so it’s obviously about maximising those. Was there a missed opportunity out of the banking royal commission to put minimum service requirements in for this kind of thing?

Minister Sukkar:

We’re going to hear from the banks throughout this process. The banks are saying to us that more than 90 per cent of their customers don’t regularly enter a bank branch. Their argument is that a lot of this is being driven by our customers who are increasingly doing their banking online or over the telephone. You’re right, it’s not really a question of profitability, the banks are very profitable although they always quibble about how profitable they really are when you think about their cost of capital. What really we want to get to the bottom of as a government is, in an environment where you’ve got innovative businesses, how can you continue to provide these services to regional communities? I don’t really want to hear the sob stories from the banks, I would just want to hear the solutions from them.

Stephen Cenatiempo:

You mention the consolidation possibilities – using Australia Post etc – we’ve had a situation here in Canberra where one of the Centrelink offices has been earmarked for closure. Now I know Centrelink and Medicare are now sharing offices, is there maybe something to be said for using those kind of government service buildings in some sort of facility that would make them viable for the government services and would also offer banking facilities, so to speak?

Minister Sukkar:

Look, Stephen, you raise a really good point. Part of that will be, I think, fleshed out throughout the consultation process. There’s clearly going to be situations where you can have local government potentially, federal government and even state governments, in some way shape or form, pitching in, sharing some of these resources and offering services to areas that have been losing them. I think that’s a really obvious and important potential pathway forward. I’m also keen to here from the banks, who are innovative businesses, how else can you do it? When you think about banks who are saying that increasingly their customers are moving online and over the phone, my view is what is to stop a bank having those people at the end of a phone line located in a regional area who also happen to be located in a place where you have a bank branch open and available for your customers because those employees in the regional area can still service the broader customer base because everything is online and over the phone these days.

Stephen Cenatiempo:

Multitasking, that’s a novel approach these days. How is this going to be structured or how long will the enquiry take, when do submissions close, all of the nuts and bolts of it?

Minister Sukkar:

Submissions close on 18th December, the consultation paper is out now. We really want to hear from everybody that’s inclined to provide us a submission, between now and the 18th December. We’ll be meeting again in December and January for two further meetings. The next scheduled meeting will be in Orange in New South Wales and then we’ll meet again in a regional centre in January, yet to be determined. We’re not looking to drag this out forever. My strong view is we should be able to identify the problems pretty quickly and then get an idea for what the appetite from all of those stakeholders is to get a solution and to get a pathway forward. You’re also right, Stephen. To some extent it’s not just regional areas. I’m in suburban Melbourne and we see bank branches closing on a reasonably regular basis so it’s actually a bit broader than that but what this might do is provide some form of template, some sort of path forward that might even extend outside of regional areas at some point in time in the future.

Stephen Cenatiempo:

Absolutely. Well we’ll put some links up on our Facebook page and website so that people can have their say in our local area. Michael, good to talk to you this morning.

Minister Sukkar:

Great to be with you. Take care.