Additional comments from Labor Senators

1.1Labor Senators believe that all Australians should have accessible, secure and affordable banking services. By virtue of the deposit guarantee that the Commonwealth provides for Australians and their banks, Labor Senators consider banks to be operating under a social licence which obligates the industry to ensure all Australians have access to banking services, irrespective of where they live or their economic circumstances.

1.2Labor Senators believe that all banking organisations currently operating in regional, rural and remote Australia should work with consumer organisations, local communities, the Finance Sector Union, and all levels of government to ensure that Australians living in the regions have access to adequate face-to-face banking services.

1.3Labor Senators recognise the challenges for some people living in remote and regional communities in accessing physical services. These challenges are present not just in the banking sector but also in other sectors such as retail and legal services.

1.4We are concerned, however, that some of the recommendations of the Committee do not directly address these challenges and could have unintended consequences on existing service provision in the regions, thereby reducing competition in the banking sector and diminishing access to services.

1.5Labor Senators welcome the Government's commitment to ensuring that cash continues to be accessible to all Australians, recognising that the cash system provides resilience to the Australian payments system in times of natural disaster, crises and network outages, and that some customers—including those in regional and remote areas—continue to prefer using cash.

1.6Labor Senators strongly believe that all major banks should participate in Bank@Post. We support the Government considering an increased role for Bank@Post in handling cash and supporting the transition away from cheques.

1.7Labor Senators also welcome the Government's commitment to boosting competition in the banking sector, including through introducing a financial sector regulatory grid and setting an expectation that Australian Prudential Regulation Authority (APRA) seeks to minimise the costs and burdens of regulatory requirements for regulated entities, including by applying proportionate requirements that take into account the different businesses models that exist in the sector.

1.8Labor Senators note that the Government is yet to respond to recent Australian Competition & Consumer Commission (ACCC) recommendations related to the Home Loan and Retail Deposit markets. Labor Senators consider the changes recommended in the reports—which would make it easier for customers to switch mortgages, more transparently compare banking products, and understand interest rates eligibility—would contribute to a better banking experience for customers.

1.9When it comes to branch closures, Labor believes the banks have an obligation to first consult with the impacted community to ensure there is suitable and accessible access to banking services. Labor senators are concerned about the unintended consequences of the recommendation that relates to branch closures. There may be unintended impacts on prudential supervision of banks, as well as competition and insolvency laws. It is also not clear what criteria would be established for the regulator to permit closure, how the impacts of denying permission for closure would be funded, nor the basis upon which penalties (civil and criminal) might be applied.

1.10Labor Senators note that in a recent costing of an increase to the Major Bank Levy, the Parliamentary Budget Office assumed that 75 per cent of the levy would be passed onto customers. Whilst noting this is an assumption, Labor senators would be concerned about this pass-through of costs to households and businesses who are under pressure at the moment.

1.11Labor Senators recognise also that Australian banks have invested heavily in digital and online banking to serve all of their customers. In light of this, we welcome the extensive work being undertaken by the Government in educating banking and other customers about online safety and scams. The establishment of the National Anti-Scam Centre and ongoing legislative and education reforms should help provide customers with the confidence they need to use online services. We also welcome the work being undertaken by the Government to increase access to secure internet services in remote and regional Australia.

1.12In closing, Labor Senators wish to place on the record our thanks to the many members of regional communities that came forward to share their experiences in accessing banking services with the Committee.

1.13We also wish to record our deepest thanks to the late Senator White for her significant contribution towards the conduct of this inquiry and for her advocacy for regional communities and people living in regional Australia.

Senator Glenn Sterle Senator Raff Ciccone

Deputy Chair Substitute Member

Labor Senator for Western AustraliaLabor Senator for Victoria