A newly established Senate inquiry is calling for banks to immediately stop closing branches in regional towns until a proper impact assessment is done.
Prompted by the number of bank closures across regional Australia in recent months, Coalition Senators have launched the inquiry to look at the economic and welfare impacts of losing regional branches.
The number of regional branches fell from 2,500 to 1,900 in the four years to June 2021, part of a 23% nationwide decrease from 5,800 to 4,500.
ATM numbers have also fallen significantly – by 20% nationally since 2016.
The inquiry has been referred to the Senate Rural and Regional Affairs and Transport (RRAT) References Committee and will investigate issues including:
- the branch closure process, including the reasons given for closures;
- the economic and welfare impacts of branch closures on customers and regional communities; and
- the effect of bank closures or the removal of face-to-face cash services on access to cash.
It follows the work of the Regional Banking Taskforce, established by the previous Coalition Government in October 2021, and which reported its findings in September 2022.
Liberal Senator for Western Australia Dean Smith, says the existence of a banking outlet not only provides an essential service, but also gives people a sense of security and optimism in their town.
“Local banks are one of the core components of regional communities and their closures badly hurt residents and businesses,” Senator Smith said.
“From Derby to towns in the South West, I have seen first-hand how a physical branch closure, or reduced operating hours, has a negative flow-on effect to the entire community.
“Small businesses, for example, may have to close during the week just so they can drive to a town with an open bank – that is an unacceptable situation.
“While 88% of adults in regional areas have internet access, and the data suggests a large number of them are using it for some form of online banking service, the more vulnerable or those in isolated areas must not be overlooked.
“Banks should look at the services they provide to regional towns as part of their social licence and consider the loyalty shown to them by customers over many decades.”
Senator Smith welcomes Chair of the RRAT Committee Senator Matt Canavan’s call for the major banks to acknowledge the seriousness of this issue by adopting a self-imposed moratorium on further bank closures in regional communities for the duration of the inquiry.
“Access to a bank can be a life-or-death factor for many businesses. I do not have confidence that our banks are properly considering these severe impacts before they have announced closures,” Senator Canavan said.
“Our Senate Committee calls on all banks to defer any decision on whether to close branches until they can hear from locals through this inquiry.
“The call for a bank closure moratorium has been backed by Senators from different political parties.”
Submissions to the inquiry close on 31 March 2023 and can be made by any member of the public.
The inquiry is then expected to report back to the Senate by 1 December.
Further information about the inquiry, including how to make submission, terms of reference, and public inquiry dates can be found here: Bank closures in regional Australia – Parliament of Australia (aph.gov.au)