At the end of two days listening to senate hearings investigating the impact of regional bank closures in Western Australia all I wanted was a hot shower to wash the grime of corporate greed from my pores.

First at Carnamah in the state’s mid-west and then Beverley in the Wheatbelt last week, witness after witness told of how the full cost and burden of banking in their communities had been left to everyone but the entities granted a licence to provide those services.

The question anyone who was listening has been left with is how on earth are the banks getting away with this when face-to-face banking services are so obviously still needed and the bank’s own systems require customers to attend branches?

People are not taking time off work every Friday during footy season to drive hundreds of kilometres to the next closest bank to get money to pay the players and run the bar for the fun of it. Or drawing on their annual leave to get the cash float for the local show.

You don’t clock up more than 500km in two days trying to find a bank that is open to make a security deposit to see the country and you don’t place advertisements in the local paper for coin to provide change at the post office to make new friends.

And while the idea of a two or three-hour road trip with a bunch of mates could be spun as a positive, the requirement to have every signatory for a voluntary organisation’s accounts present in a bank at the same time to make changes to office bearers is simply ridiculous.

The senators heard stories like these over and over again.

• It now takes a two-night overnight stay in Moora for Carnamah residents without a car and reliant on public transport to go to a bank.
• A man drove 240kms to be in a bank one minute to sign a document.
• Another in his nineties has had to drive himself 240km three times already this year to visit the nearest bank after his local branch closed.
• A newsagency owner said she was now a cash hoarder because of legal requirements to be able to pay out lotto wins in cash and nowhere in town anymore to get the money.
• Another business is now facing increased insurance premiums after someone found out how much cash they were being forced to hold on premises and robbed them.
• Community organisations are operating on trust systems where “an awful lot of people are walking around with a lot of money in their possession that is not their own”.
• Post offices have been forced into the role of being proxy banks without the staff, systems or security to do it viably or safely.
• A woman’s mother begged her to attend the hearing and speak for the many elderly people who can’t use online banking, ATMs or the complicated, multi-level phone systems most banks are using now.

This went on for two days.

The anger was directed at all the big four banks – ANZ, Commonwealth, NAB and Westpac – and the Commonwealth-owned Bankwest.

Every witness statement at these hearings started the same way – customers finding out about the closures from a note stuck on the door of their bank and, according to one councillor, “a wonderfully patronising and condescending letter after the decision was made”.

The only bank to appear at this round of hearings was Bankwest, fronting up to a hostile crowd at Beverley.

Under questioning, its representatives said the bank saw itself as an essential service and that it would, to its credit, be honouring the senators’ request to pause any closure plans until the committee reports in December before adding, “we don’t have a hit list, so to speak, but after the end of the year we expect to see fewer branches in line with our strategy”.

This is what regional Australia is up against.

After everything those bankers heard that day (presuming they stuck around to listen) it is clear there is no welfare or economic argument that will change their plans to alter their business models, because that is the real reason branches are being closed.

It’s nothing to do with customer use (the banks don’t actually know how many people come into their branches, they only record transactions), it’s about cutting costs and customer service is where they have decided to make their savings by transferring the cost of banking to communities.

And the cost to these people following the removal of their banks is adding up every year.

It’s not just the outlay for fuel, wear and tear on vehicles and lost time from work, there’s also the lost revenue to their town when people start shopping and doing business where the next closest bank is. (A butcher reported that his shop’s takings dropped by 15 per cent after the NAB closed at Wyalkatchem and the cafe next door and shop across the road closed down due to the drop in foot traffic.)

Customers in these regions will also be increasingly penalised for their carbon emissions generated by the extra travel they are now making to get to banks, while the banks are allowed to claim the branch closures against their emission saving targets under “building consolidation” and a reduction in energy use.

Is there hope?

A quietly spoken voice at the Carnamah hearing shared a story she had written about what happens if just one bank is added to a town rather than taken away.

Would it surprise readers to know that it would only cost the banks less than $6 million a year in total to put a bank employing a manager and a small team in the 600 towns that have been left without a major bank since the 1970s?

Roughly speaking, that is just $150 million annually for each of the big four banks to stop all of this rot.

As Senator Gerard Rennick (who declared that he has shares in the Commonwealth Bank) said, he would be happy to take a hit to his dividends to see the regional network invested in again, but seriously, at that cost, would anyone even notice a figure so small relative to the huge profits the banks are making each year?

The people in those towns would – the money they are now spending on fuel would be back in their pockets, their homes and businesses would no longer be targets for thieves and the angst over how to manage their banking needs on a daily basis would be over.

The environment would – customers would no longer be forced onto the roads driving petrol and diesel vehicles hundreds of kilometres to find banks.

The banks themselves would – local bank managers with local knowledge and relationships helped build the businesses these banks now count as major customers. Putting them back could not only recoup the annual costs but set the bank up for new generations of business investment.

Senator Matt Canavan raised the possibility of an essential service contribution for banks along the lines of that imposed on the telecommunications industry.

If given a choice between a $1 million annual fee to offset their social licence to operate for each closed branch, or replace/keep that branch, what would the banks choose?

It would be interesting to work out whether that would cost them less than another suggestion to come from the hearings – banks providing fuel cards for every customer who loses their local branch.

It was a suggestion made in jest but what is not so far-fetched is forcing the banks to include customer travel due to branch closures in their scope three emissions that are reported to government through Climate Active.

If this were to happen, the implications for the banks would extend beyond the hip pocket and into environmental performance reputational risk, making the idea of putting a bank back in every town and retaining what remains of the regional network look much more attractive.

Update

Just one week after The WA hearings were held, the National Australia Bank (NAB) announced the closure of its branch in Waroona, a town just two hours from Beverley.

It is Waroona’s only bank.

Senators Canavan and Slade Brockman have expressed their disgust at what they described as a “cowardly decision” given the timing of the senate inquiry holding sittings in the region.

“NAB waited until after we’d conducted our hearings in WA to close another branch just two hours down the road from where we were,” they said in a joint statement released after news of the closure broke.

“They’ve done this with little to no consultation with the community, and unlike the other big four banks have not put a halt on their branch closures while we undertake our inquiry.

“The bank has made a decision that will negatively impact Waroona, and the surrounding area and it’s becoming clearer and clear that the banks are happy to spend millions of dollars on campaigns on the trendy social issues but aren’t willing to ensure that a community maintains an essential service.”

Senator Brockman said Waroona and all regional communities deserved the chance to be heard and to be listened to.

“This is especially true when we reflect on just how much of Australia’s wealth come from the regions,” he said.

Questions put to NAB:

• Why did NAB wait until after the WA hearings of the senate inquiry into regional bank closures were completed to announce the Waroona closure?
• What is NAB’s response to the timing being described by Senators Matt Canavan and Slade Brockman as “cowardly”?

NAB response: Questions not answered.

This article appeared on The Regional on 21 August 2023, updated 23 August 2023.