Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the report.

I rise to speak on the committee's inquiry into the bank closures in regional Australia. First of all I'd like to acknowledge the great work of my committee colleagues, in particular, the chair, Matt Canavan, who has done a very good job of raising this issue in the media. I also acknowledge other committee colleagues, in particular Linda White—she will be sadly missed; she was a great committee member—Glenn Sterle, Senator Colbeck, Senator Brockman and Senator Allman-Payne. I think it's fair to say that it was a very collegiate committee. We all shared the same values, which is that we believe that people out there in regional and metropolitan Australia are entitled to have access to banking services. Indeed, the first recommendation of the committee was that it is time that it is recognised in this country that banking is an essential service. That is very, very important because, like all other essential services in this country, you have to have a public-private set-up. With hospitals, you have public hospitals and you have private hospitals. With schools, you have public schools and you have private schools. It is time we recognised that, with banking, we also need a public bank. The sale of the Commonwealth Bank did not increase competition; it actually concentrated market powers.

The Commonwealth Bank was set up by the Labor Party and Andrew Fisher and King O'Malley way back in around, I think, 1911 or 1913—I'll stand to be corrected on one of those dates. It actually started off as a central bank as well and it funded many infrastructure projects across the country, but I won't dwell on the infrastructure bank project issue now. Eventually the national bank aspect of that Commonwealth Bank got segregated. The Reserve Bank side of it got segregated in 1959. Eventually the responsibilities of the RBA side were again segregated in the nineties, with APRA, the Australian Prudential Regulation Authority, being separated from the RBA, and that's a shame because what we've got now is a situation where too many cooks are spoiling the broth.

I don't think APRA has done a very good job at all of enforcing the voluntary code of conduct that was implemented 20 years ago that says that the last bank in town has to keep that branch open. One of the things that we heard from many constituents is that major banks were closing down branches without actually consulting the community. Indeed, one of the recommendations of this report is that we now introduce a mandatory code of conduct and that banks be forced to consult with APRA if they close a branch in a regional town or a metropolitan area. I have to be honest: I think the horse has bolted on that one. But it is a recommendation that I think we should still implement just as an extra safeguard. It is something that must be done.

It's important to understand, and I just want to identify, the vulnerable communities out there that need face-to-face banking. First, there are the retirees. Many retirees aren't comfortable using computers. They're afraid of scams. And it's not just retirees who weren't necessarily tech savvy in the beginning. I've spoken to retirees who were tech savvy but who, as they've got older, have got Alzheimer's or Parkinson's or whose eyesight isn't as good. They're not as comfortable using a mouse and reading the computer and they're not as sharp as they once were. I've got to admit that, with some of the spam emails that go round, it is very easy to be confused. We owe it to our retirees to make sure that they can go to a branch, get face-to-face service and build up a customer relationship with that bank—a bank that takes their money at, say, one or two per cent and then lends it out at five or six per cent. There are billions of dollars out there in very low interest accounts. Those banks have an obligation, if they're going to hold these people's money on their account and pay them a very low rate of interest, which is often what they do, to make sure that they deliver a service in return for getting the benefit of lending on that money at a higher interest rate.

A second, very important part of the community that relies on bank branches is, of course, small businesses. They need access to banks for a number of reasons, not least of which is cash. Cash is still an important part of our economy. No-one is doubting for a minute that we're going to go electronic, but there are always times and places for some cash transactions. Some people want to use cash all the time. I myself can live with using electronic payments, but I must admit that at times it is convenient to have cash, especially if you're a tourist. One of the things we heard from Port Douglas, for example, is that many tourists go up to Port Douglas—I think it has something like half a million visitors a year—and the branches are closing and aren't open five days a week from nine till five o'clock. Often the tourists, if they're on holiday from Sydney, need cash or they might have to finish off a banking transaction and may need access to a bank branch. They're another vulnerable community.

Another community that is very important is community groups. They hold fetes and things like that. I know myself; I was the president of my son's school P&F. We had to change all the signatures, which was quite a kerfuffle. I was living in town at the time, and it was a kerfuffle to all meet at the same place at the same time. We've heard stories of people having to organise a 200- or 300-kilometre round trip to go to another town to sign signatures. Whether it's a school P&F or some other volunteer organisation, they need a bank branch.

Another community that needs support is immigrants. They don't always speak English very well when they arrive. They're not necessarily comfortable reading all the terms and conditions and using, say, an English based internet front end. They would also like to speak to a teller face-to-face to get important personal service. These are some of the vulnerable groups that have been impacted by the banks that rip out $30 billion of profits a year.

I'm very glad the first recommendation was that banking is an essential service, and a part of that is the public bank. I'm not a big fan of the current Bank@Post system at the moment, where post office franchisees are required to provide various banking services for the major banks. I don't think the major banks—and this is something we learnt in the inquiry—are paying the post office franchisees enough, and then the post office is expected to understand all the different nuances of all the different banks and their products. I would much rather we had a government account, which is backed, and those services and those payment systems are actually underpinned by the RBA.

I was recently at a public works inquiry at the RBA head office in Sydney where I was fortunate enough to be able to speak to the RBA governor, Michele Bullock. The RBA still manages the payment systems today. We already have post offices out there that have the physical infrastructure, and we have an RBA with an electronic infrastructure. We can combine those two to provide a bank. If we could somehow turn our post office into a bank and, quite frankly—I'll throw this in as well—as a government insurance office—we should have never privatised the state government insurance offices—we could have a one-stop government owned financial services hub that provides banking services, insurance services and post office services. We could even combine it with Centrelink services whereby people could go in, a bit like a New South Wales model, and get access to all the necessary government services in one place. The money could be used from the profit because we would obviously have to underwrite a certain rate of return so that we wouldn't take away the private banks' profit. Let the private banks rip by all means, but we need a public to maintain ethical competition as well.

I have no doubt that the privatisation of the CBA in the 1990s and the introduction of superannuation led to the actual royal commission into financial misconduct and financial services. That was because we didn't have a public bank to keep a lid on unethical practices engaged by the private banks. I want to thank everyone who has supported this committee and this inquiry, and I strongly encourage the current government of the day to take these recommendations seriously. I seek leave to continue my remarks.

Leave granted.