Regional Bank Closures

The Hon. R.A. SIMMS (15:10): I seek leave to make a brief explanation before addressing a question without notice to the Minister for Regional Development on the topic of regional banks.

Leave granted.

The Hon. R.A. SIMMS: Last week, the federal inquiry into the impact of bank closures in regional communities delivered its final report. The report contained eight recommendations, including a feasibility study into publicly owned banks and adding a supplement to the federal major bank levy to fund a program to support community bank branches in regional areas.

In 2017, the then Labor government proposed a state-based major bank levy, which at the time would have raised $370 million of revenue over four years. Bank closures have impacted a number of regional towns in South Australia and also suburban areas such as Golden Grove, with Rhiannon Pearce MP organising a petition to reverse the closure of that local branch.

My question to the Minister for Regional Development therefore is: is the minister advocating for the federal government to implement the recommendations of the Senate inquiry into bank closures in regional Australia, and has the minister or her department considered which, if any, of the recommendations could be implemented at a local state level?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (15:11): I thank the honourable member for his question. He is correct that in May 2024, the Senate Rural and Regional Affairs and Transport references committee delivered its report on an inquiry into bank closures in regional Australia. I am advised the inquiry received 609 public submissions, and a total of 13 public hearings were held across a number of regional centres, including in Kingston South-East, that one being on 21 February.

The report provided a list of eight recommendations made by the committee. A chapter was included on possible solutions to the regional banking crisis, listing the following, which have been extracted from the report: alternatives to bank branches, such as better remote service options; co-location of banks; community hubs; local council banks; mobile banking; more community and customer owned banks; increasing the role of bank at post; a national public bank; options for regulatory reforms, such as imposing a universal service obligation on banks; increasing regulation and oversight in relation to branch closures; and options to address issues around loyalty of bank customers.

In terms of the recommendations, we are expecting, as I am sure many are, some further communication from the federal government in terms of their intentions. Members may recall that the state government made a submission to the inquiry. I think we were alone in that in the chamber. I do not think the asker of the question, nor the opposition, made a submission, but I guess that is up to them of whether they just want to come in here and make statements or whether they actually want to take some action. However, our submission emphasised the scale of the 71 per cent reduction in South Australian bank branches from a peak of 228 in 1975 to only 67 in 2021, and the impact this reduction has had on services available to regional banking customers. Those impacts include:

reduced customer access to detailed face-to-face advice on banking products which suit their particular circumstances. That, of course, includes businesses operating in agriculture, fishing and forestry, among others;

increased inconvenience and security risks in customers transporting large sums of cash and, in some cases, several hundred kilometres to the nearest deposit-taking institution;

reduced financial inclusion of remote First Nations people, as well as older people, people with cognitive impairment, and those with lower levels of English language or financial literacy;

reduced local economic activity, which results from banks reducing local sponsorships; and

bank employees leaving regional towns.

Our government submission concluded that, while decisions around bank branch closures are commercial decisions taken by the banks, the impact of these decisions could be alleviated in a number of ways. Our government submission also recommended that the Australian Prudential Regulation Authority be asked to investigate ways in which more tailored information about banking products and services could be provided to people in regions, including through the use, for example, of virtual meetings with bank staff, which could be facilitated by using technology hosted in Australia Post offices or other government offices located in regional towns.

We look forward to seeing what the federal government's plan is in terms of implementation of recommendations that are within their scope, and that will inform any future actions that we might be able to take.