Drive into any country town and you will see the remnants of old bank buildings. They have often been turned into smart cafes, serving flat whites and specialty teas to locals and passersby alike.
It is quite a fitting use. When it comes to rural banks – and rural politics generally – there is a lot of tea and sympathy but not much else.
You may have seen the headlines about the continuing closure of rural bank branches. While some branches have had a temporary stay, in most cases it appears to be a public relations reprieve while the lights of a Senate inquiry are upon them.
The truth is, the latest closures have simply continued a decline – well charted by independent journalist Dale Webster – that has been going for decades.
Back in the 1980s, when Australia threw its economic shutters open under the Hawke-Keating government, banks were pushed to find dance partners in order to get bigger and more competitive. At the same time, the Commonwealth bank, built by the assets of the state, was privatised.
Straggling branches started falling like ninepins and customer service was reserved for the rising coffee market. In 2004, federal politicians wrote a report about the decline in country branches called Money Matters in the Bush. It could have been written yesterday.
Technology, it said, was shifting the way we use banks. Financial institutions were now competing on a global scale and their imperative was to reduce costs.
“The tradeoff, however, has been the rationalisation of bank branches,” says the report.
It noted Indigenous people faced an extra layer of challenge compounded by remoteness, lack of financial literacy, socioeconomic disadvantages, cultural differences or a combination of these factors.
But its recommendations were largely about being nice to customers as the branches shut down, such as waiving fees for closing accounts, giving communities fair warning, charging fewer costs to transfer loans and educating customers about electronic banking. (It also noted there were “challenges” in rural telecommunications access and accepted government intervention was needed to ensure adequate rural services.)
In short though, its conclusions were mostly smile and wave boys, and don’t let the door hit you on the arse on the way out.
Two decades later, this conclusion stands out: “The provision of adequate banking and financial services to regional, rural and remote Australia is the joint responsibility of the financial services sector and government with the active involvement of the community.”
Do governments or banks still acknowledge a responsibility to provide adequate banking services to remote, rural and regional Australia?
Just last year, the Treasury released the final report of the Regional Banking Taskforce, which was established by the former Coalition government in October 2021 to analyse closures, assess impacts for communities, consider transitions as branches close and come up with alternative models.
When it reported in September 2022, it came to the same conclusions as the report completed 18 years earlier: strengthen the “closure protocols”, consult communities, provide support for vulnerable people, and improve education.
It noted the “perception that financial service providers occupy a special position of responsibility and trust in their community”. It was silent on whether there actually was a responsibility to provide financial services.
The social contract between banks and customers in regional communities has stretched thin in the past four decades, thanks in no small part to branch closures. So I was interested in Jim Chalmers’ Monthly essay about pivoting towards a more values-based capitalism.
It is a concept with a certain attraction for rural places. Governments and large companies servicing us are caught between the expectations that the services will remain the same in a policy context where economic policy calls for ruthless efficiency. What sort of country are we to be? Ruthless amoral capitalists or economic contributors rooted in values? The answer matters for rural areas.
This clash of expectations is happening even as the people and landscape on which those models are applied morph and change. For example, we know the population shifted during the pandemic and reversed the tide in many regional places, now swelling with new residents and a mini-housing boom.
So how do you get to the stage where a Westpac branch is earmarked for closure in a town like Moree, a rich agricultural area including some pretty large businesses and a population forecast to increase?
Alternative models are thin on the ground for those who want to visit branches.
The Commonwealth has transitioned 90 branches to shorter hours from 9.30am-1pm, after which their local staff pivot to phone call centre duties. Other banks are also changing hours. At least it keeps the doors open on what is, let’s face it, much cheaper real estate than metro mega branches. It means the rural people get to keep those jobs.
(And it is worth noting city and suburban branches are closing at similar rates – though their customers have more options in their locales.)
Let’s face it, new thinking is required, particularly after the last few years. Chalmers wrote that recent crises had left us vulnerable. If that is true, rural Australia has some obvious vulnerabilities laid over the top.
Economic diversity is more shallow. Fractures of climate, of industries, of regional economies, can have far-reaching consequences. An economic tremor that would cause a ripple in a city can cause a sinkhole for a rural place. When we lost a local abattoir in our town, the following term, we lost a school class.
I accept towns and the businesses that service them cannot stay the same for ever. Our old Westpac Bank building, which was the Bank of NSW before that, is now the pharmacy. The National Australia Bank is closed. It is a residence now, no doubt with a handy safe.
The Commonwealth Bank is still open and as the other banks closed, some enterprising locals raised the energy and funds to attract a Bendigo Bank. It is a delight to sort my business out with the young woman who babysat my kids. Hopefully they will remain because while I do love a cafe, we need a bank branch as well.
