The squeals of the banks confirm Senator Canavan’s recommendations are on the money. Finally, a Parliamentary inquiry has called out the major banks’ appalling mistreatment of customers and communities, backing it up with powerful recommendations to bring them into line.

This is the Australian Citizens Party’s (ACP) view of the Senate Rural and Regional Affairs and Transport Committee’s 15-month inquiry into bank closures in regional Australia, instigated by Senator Gerard Rennick and chaired by Senator Matt Canavan, which handed down a comprehensive, 199-page report on Friday.

The ACP helped to lobby for this inquiry and participated in all 13 public hearings held around Australia, at which communities were able to present their experiences that proved the banks lied when they claimed customers didn’t want to use banks anymore; in a March 22 release, the ACP called for the inquiry’s final report and recommendations to match the power of the hearings.

ACP Research Director Robert Barwick said today that the Senate committee has delivered: “The Senators have done justice to the testimony of communities like Junee, Carnamah, and Tom Price”, he declared. “They’ve acted on what they’ve heard, and squared up to the major banks with recommendations that, if implemented, will improve Australia’s banking system with minimum standards of conduct and service.”

Recommendations

The final report has made eight recommendations, of which the ACP considers three to be game changers for Australia’s banking system.

Essential service - the Committee recommends access to financial services should be designated an essential service, specifying there must be a guarantee of reasonable access to cash and financial services for all Australians.

“These are not just words,” Barwick said. “Being an essential service imposes legal obligations on banks that don’t exist presently. And it’s the banks’ own fault - during COVID they lobbied successfully to be considered an essential service to avoid lockdowns, but then withdrew that essential service from hundreds of towns around Australia. The Committee has called them out on it.” 

Mandatory Code of Conduct - no more self-regulation. The Committee calls for the government to “urgently” develop a mandatory Banking Code which requires proper consultation with communities before any branches are closed, and requires the regulator to assess compliance with the code and approve any closures.

“This recommendation is a tribute to the late Labor Senator Linda White”, Barwick said. “In her participation in this inquiry before her tragic passing earlier this year, Senator White exposed the banks’ Code of Conduct being essentially voluntary as a joke, and locked horns with Australian Banking Association CEO Anna Bligh over it. This was past due - the banks shouldn’t be a law unto themselves.”

Public bank - in the ACP’s view, Recommendation 2 is the most significant: “The Committee recommends that the Australian Government commission an expert panel to investigate the feasibility of establishing a publicly owned bank. In investigating this, the panel should examine options including, but not limited to a stand-alone public bank or one associated with, and using the branch network of Australia Post.”

The ACP’s Robert Barwick and Glen Isherwood testified on a public post office People’s Bank solution to the December hearing, as did Emma Dawson from independent think tank Per Capita, and Angela Cramp and Scott Etherington from the Licensed Post Office Group.

“This is the banks’ worst nightmare - competing with a public bank on service”, Barwick said. “This is the big game changer, the one the banks are attacking most. They won’t be able to throw an army of lawyers at finding loopholes, but will have to lift their game.”

The ACP called for the recommendations to be implemented in full.