Legislative Council: Wednesday, February 22, 2023



Regional Bank Closures

The Hon. R.A. SIMMS (15:58): I move:

That this council—

1. Notes with concern that:

(a) Westpac has decided to close their branch in Coober Pedy, leaving the community without a bank; and

(b) at least 22 regional towns have been left without a bank branch including Burra, Kapunda, Mannum, Maitland, Peterborough, Roxby Downs, Tailem Bend, Tumby Bay and Willunga.

2. Recognises the adverse impact of the closure of banks on regional communities and in particular the impediment it places on community and business activity.

3. Condemns the closure of bank branches in the regions and calls on Westpac to reconsider its decision to close its branch in Coober Pedy.

4. Calls on the Malinauskas government to formally raise the matter with Westpac and advocate for the retention of bank branches in the regions.

This motion is calling on this council to note with concern that Westpac has decided to close their branch in Coober Pedy, leaving the community without a bank. It notes that at least 22 regional towns have been left without a bank branch, including Burra, Kapunda, Mannum, Maitland, Peterborough, Roxby Downs, Tailem Bend, Tumby Bay and Willunga. It recognises the impact of these closures on regional communities and it condemns the closure of bank branches in the regions. It calls on Westpac to reconsider its decision to close its branch in Coober Pedy and also calls on the Malinauskas government to formally raise this matter and to advocate for the retention of bank branches in the regions.

Ideally, a motion like this would not be necessary because the government would be doing everything in its power to address this issue and to ensure that regional communities have the services they require, but I have been very disappointed by the laissez-faire approach that seems to have been taken by the minister, the Hon. Clare Scriven, on this issue.

I have asked the minister repeatedly in this chamber what the government have been doing and, really, it seems that the minister's solution for people living in Coober Pedy, where they cannot access an essential service like a bank, is consumer pressure. I am not sure what level of consumer pressure one can apply when they do not have access to any alternate services in their community.

The latest innovation that the minister has proposed is to make a submission to a Senate inquiry. Of course, I am supportive of members of the community doing that, but I had hoped that we would see a little bit more of an assertive approach from the Malinauskas government with respect to such a vital service.

This is particularly pertinent when one considers the enormous profits that are being made by our big banks. Let's consider some of the facts. Let's consider the latest financial reporting season. Westpac recorded a $5.65 billion profit and a 19 per cent decline in their operating costs. The NAB recorded a $6.81 billion profit, which represents an 11.5 per cent increase from the year earlier. ANZ recorded a $7.19 billion profit, which is up 16 per cent on the previous year.

On 15 February, the Commonwealth Bank announced that it had recorded a jump in its half-year profit to $5.1 billion—an increase of 9 per cent from the year earlier—off the back of rapidly rising interest rates and stronger business leading growth. Despite these amazingly significant profits, these enormous profits, Australia's big four banks continue to close their branches in regional towns throughout South Australia as well as the rest of the country and, of course, they continue to profit from rising interest rates.

It really is an outrage. Investing in South Australia's regions is important for our region's ongoing economic growth, sustainability and quality of life, particularly following the recent challenges of widespread drought, bushfires, floods and the COVID-19 pandemic. Banks provide a variety of services to their customers. They include enabling customers to open and close accounts, to deposit and withdraw cash, to obtain various types of loans. Historically, banks have tended to deliver these services through their branches and we know that this is particularly vital for older South Australians.

When a bank leaves a town, it leaves locals unable to use these services. On 17 February this year, Westpac closed its Coober Pedy branch. The closure of the branch effectively leaves the town without a bank and it is already impacting vulnerable consumers, particularly the elderly and First Nations people. Customers are being forced to drive to either Port Augusta or interstate to Alice Springs to access a branch, both of which are more than 500 kilometres away.

We heard today—and I raised this matter in question time with the minister—reports that residents of Coober Pedy are anxious about travelling in a car with large wads of cash because they are living in fear that they might be pulled over and robbed. This is not a satisfactory response and, again, what does the government suggest: make a submission to the Senate inquiry. Vote with your feet. Really, this is not acceptable.

Unfortunately, Coober Pedy is not the only town in regional South Australia to have had all of their bank branches closed. Since 2012, the following towns have been left without a bank: Angaston, Barmera, Birdwood, Burra, Freeling, Gladstone, Kapunda, Lobethal, Mannum, Maitland, Uluru, Peterborough, Riverton, Roxby Downs, Strathalbyn, Tailem Bend, Tumby Bay and Willunga. A total of 69 branches have been closed throughout regional South Australia since 2012.

There has also been a significant decline in the number of branches in remote Australia wide. In fact, 41 per cent of all branches closed were in regional and remote areas in 2020, despite these areas only making up 28 per cent of the Australian population. In its final report, the Regional Banking Taskforce, set up by the federal government in 2021, found that many older Australians, persons with disabilities, migrant communities and First Nations people face greater challenges and require more assistance when they are using their banking services.

When the banks close their doors, the challenges for these consumers are exacerbated. The task force ran for a year and received 416 submissions from rural residents who were distressed about dwindling essential services, limited access to cash and the slow economic death of their towns.

Not only do these bank branch closures increase the time and cost required to travel to access similar services but there is also a loss of face-to-face banking that is reducing the availability of information on services. That information is normally provided at a face-to-face level that is easier for people to understand and helps them understand their financial decisions and the options that they face.

It is morally wrong for these institutions that are making massive profits to close their branches in regional and rural Australia. Bank branches are essential services and they should be kept open for our regional communities. The government has a responsibility to advocate on behalf of these residents.

I know there has been a lot of discussion about the cost-of-living crisis at the moment. The narrative seems to be that this is being driven by wages growth. We know, of course, that that is not true and that wages have not kept pace with inflation. Rather, what we are seeing is profit price inflation; that is, large corporations are making enormous profits and, in turn, that is driving up inflation. Those costs are now being faced by consumers, and we are seeing that with the cost of housing and other essential services in this country.

The big banks have been one of the major beneficiaries of profit price inflation in this country, and yet, in the face of those record profits, they close regional branches with impunity, they thumb their noses at the community, and they rake in these record profits and do not invest in any level of community service. I think it is absolutely outrageous. Really, the Malinauskas government needs to step up here, rather than simply palming it off onto other levels of government or saying it is all too hard. They need to step up and show some leadership.

I do want to put members on notice that I plan to bring this matter to a vote in a future parliamentary sitting, and I look forward to members getting behind this very sensible push to try to bring these big corporations to heel.

Debate adjourned on motion of Hon. I.K. Hunter.