2CC BREAKFAST WITH STEPHEN CENATIEMPO
FRIDAY, 2 JULY 2021
SUBJECTS: Bank branch and ATM closures
STEPHEN CENATIEMPO, HOST: Bank branches have been gradually disappearing all over Canberra, including various branches in Weston Creek, Mawson, Tuggeranong, Dickson, Civic. Westpac have announced they're closing nearly 50 branches right across the country, and it's an issue that Andrew Leigh, the member for Fenner has been across, and I imagine has been inundated with phone calls. Andrew, thanks for joining us this morning. I guess the difficulty here is compelling private businesses to open a shop front, so to speak.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Yeah, that's right, Stephen, and I'm really glad that Ron's raised this important issue. It's something that I was asking the big bank CEOs about when we had hearings with them earlier this year. When each of them gave their evidence I went through and asked them how many branches they had closed, how many ATMs they'd closed, and what their plans were for the coming year. The picture is pretty much the same across the big four: they're just steadily shrinking that network of ATMs and branches because they say that they lose money.
Now, it's true that their in-person custom is dropping, but there are vulnerable people who rely on these ATMs and branches, and just shutting them out risks a whole slice of the population becomes unbanked. I think the big four need to do more to think about the most vulnerable as they're assessing the state of their ATM and branch networks.
CENATIEMPO: The thing that I find counter-intuitive here is, you're right, their face-to-face customer is decreasing, but you would have thought that made the need for ATMs increase rather than decrease. I don't understand why they're shutting all of their services. Is it just that most of us are doing everything online these days? Is that the reason behind it?
LEIGH: That's right, people are shifting away from cash. Not, of course, in the black economy. There's quite a lot of cash around the black economy, but for regular, day-to-day transactions there's a whole lot less than there was a decade or two ago.
But if you want to open an account, you've got to go in person in most cases. There's a range of complicated transactions that require being there in person. If you can just jump in the car, that's fine, but for people who are reliant on public transport, if their local branch or ATM closes that can be a real pain. There's been tie-ups between some of the big banks and Australia Post outlets. I think that's good, because that ensures that Australia Post is able to keep more of their outlets open, but that isn't the full solution to what I think is a really serious problem.
CENATIEMPO: The problem I see here is that when it comes to telecommunications providers, we have minimum service requirements, that they very rarely meet, anyway. Is there something to be said for maybe legislating some sort of minimum shopfront requirement for banks? Is that something that is possible for the government to do, or is that just pie in the sky?
LEIGH: This is a big change in terms of how their business model is operating. You don't want to lock firms into an outdated business model. The move away from cash is good for a range of different businesses, because it means they don't have the security risks and the cash handling costs that they had in the past. But we've got to make sure that we've got that equity there. I mentioned before the Australia Post agreement with CBA and NAB that was signed yesterday. That's important in terms of providing other ways in which people are able to get access to those important services, and I'll be monitoring it closely on behalf of the community.
CENATIEMPO: Is there something to be said for expanding that kind of program, then, beyond Australia Post, other outlets that might be able to, and I can't think of one off the top of my head at the moment, but surely there must be other government-type agencies that might be able to operate as agents for the banks?
LEIGH: It's certainly possible. The thing about Australia Post is they have gotten good at doing a range of these transactions, doing the ID checks and having the appropriate security in place. I think Australia Post is going to be the way forward for this in ensuring that their networks are strongly sustainable, because of course a lot of Australia Post licensees have been placed under enormous pressure over recent years.
CENATIEMPO: Andrew, thanks for your time this morning and keep us updated if you have any progress on this issue.
LEIGH: Absolutely, Stephen. Thanks again.
CENATIEMPO: Good onya. Andrew Leigh, the Member for Fenner Shadow Assistant Minister for Treasury.
Authorised by Paul Erickson, ALP, Canberra