Money Matters in the Bush: Inquiry into the Level of Banking and Financial Services in Rural, Regional and Remote Areas of Australia

Note: This page contains links to PDF files. For more information, see the web page on Accessing files.

Money Matters in the Bush: Inquiry into the Level of Banking and Financial Services in Rural, Regional and Remote Areas of Australia

January 2004

© Commonwealth of Australia 2004
ISBN 0 642 71215 8

View the report as a single document - (PDF 4263KB)

View the report as separate downloadable parts:

Members of the Committee (PDF 183KB)

Duties of the Committee
Terms of Reference

List of Tables and Maps (PDF 125KB)

Acronyms and Abbreviations

Executive Summary (PDF 208KB)


Chapter 1 - Introduction (PDF 158KB)

Establishment of the inquiry
Conduct of the inquiry
Structure of the report

Chapter 2 - Bank branch closures in rural, regional and remote Australia (PDF 250KB)

The trend in bank branch closures
The influence of globalisation on the banking industry
The context of branch closures
  Financial regulatory policy
Technological developments
Changes in consumer preferences
  Growing consumer demand for electronic banking
  Banks investing in new technology
  The drift in population to larger regional centres and the 'sponge city' effect
  Population shifts and bank branch closures
  Regional shopping hubs and smaller towns
  Questioning the nexus between population trends and branch closures

Chapter 3 - Impact of Bank branch closures on the Community (PDF 237KB)

General decline in the provision of services
Branch closures and the decline in service provision to country Australia
The effect of bank closures in country areas on local residents
  Inconvenience and costs
  Savings and security implications
  Limited choices
  Financial exclusion
The effect of branch closures on businesses in country towns
  Daily banking affairs-inconvenience and costs
  Safety and security associated with cash management
  Fall in trade
  Erosion of business-banker relationship and the loss of business opportunities
  Limited choice in accessing finance
The effect of bank branch closures on the community

Chapter 4 - Managing branch closures (PDF 268KB)

Moratorium on closure and community reaction
Background to the protocol for bank branch closures
Development of the bank branch closure protocol
Notice of intention to close branch
  Period of notice
The transition period
  Education and training
  Services available after branch closure
  Portability of accounts-costs associated with transferring accounts
  Other disincentives to switching accounts
Omissions from protocol
  Notice before changing the branch that manages the account
  Community impact statement
Amendments to the branch closure protocol

Chapter 5 - Competition in the banking industry - winners and losers (PDF 170KB)

Competition and contestability in the banking industry
Retail banking transactions in country Australia

Chapter 6 - Access to banking services in Australia (PDF 1248KB)

Anticipated branch closures
Current access to a banking service-overview
Statistics on access to banking services
APRA's 'Points of Presence' database
  Problems with definitions-branch and agency
  Other difficulties in analysing the data
  Lack of analysis
A map of the distribution of banking and financial services in Australia

Chapter 7 - Shared banking facilities and mobile Banks (PDF 213KB)

Shared banking
Perceived problems with shared banking
  Potential to undermine quality and level of service
  Conflicts in a shared facility environment
  Administrative difficulties
  Regulatory impediments-the Trade Practices Act
  Regulatory impediments-Financial Services Reform Act (FSRA)
Mobile banks
  Community support for mobile banking
  Banks' attitude to mobile banking

Chapter 8- Credit Unions, Building Societies and Community Banks (PDF 305KB)

A new regulatory regime for ADIs
Credit Unions
Building societies
Barriers to entry
  Start-up costs
  Portability and banking practices
  Prudential regulations
  Requirements under the FSRA
  Status of non-bank ADIs
  Lack of experience in servicing the financial needs of farmers
  Levy on industry
Community Banks
  The Bendigo Bank model
  The Heritage Building Society model
The advantages offered by a community bank
  Reinvigorate the economic life of a community
  Dividends for the community
Establishing a community bank
  Community support, commitment and determination
  Leadership and business skills
  Start-up costs
  Failure or take-over
Owner-managed branches
  Bank of Queensland

Chapter 9 - Agencies and Post Offices (PDF 213KB)

  Commonwealth Bank
  St George
  Bendigo Bank
  Agencies associated with credit unions and building societies
  Limited services
  Privacy and concerns about security
Banks' view
Australia Post
  Business banking
Shortcomings of Australia Post agencies
  Small business banking service
Scope for expansion

Chapter 10 - Rural transaction centres (PDF 808KB)

Background to the RTC programme
The RTC program and Post Office outlets
RTCs-broad support
  Support from local government
  Support from financial providers
Shortcomings of RTCs
  Implementation-slow start
  Limited range of services
  Meeting the needs of business
  Strategies to expand services

Chapter 11 - Automatic teller machines and electronic funds transfer at point of sale terminal (PDF 278KB)

Background-ATMs and EFTPOS
ATMs and EFTPOS-consumer benefits
Fees and charges
Drawbacks for consumers
  Distribution of ATMs and EFTPOS terminals
  Costs and security
  Limited services
  Safety, security, competency and confidence
  Physical access and industry standards
  Foreign ATMs-fees and charges

Chapter 12 - Telephone and Internet banking (PDF 250KB)

Computer and internet use in Australia
  Access to a computer
  Access to the Internet
The growing use of the internet and telephone for banking purposes
Small business and electronic banking
Farmers and electronic banking
Overall trend in the use of electronic banking in country Australia
Provision of telecommunications services in country Australia
  Overall accessibility to electronic banking
  Inadequate infrastructure
  Cash flow and cash management problems
  Establishing a relationship between customer and banker

Chapter 13 - The potential of electronic banking (PDF 364KB)

Using technology to bridge the divide
Electronic banking and customer relationships
The broader issue of access to financial advice and assistance
  Use of video conferencing

Chapter 14 - Older Australians (PDF 231KB)

Older people in rural, regional and remote Australia
Older Australians and the use of new technology
Strong attachment to traditional banking
Older Australians navigating electronic banking
  Proficiency in using new technology
  Risk of financial exclusion
  Education and training
  Building confidence in the use of new technology

Chapter 15 - Indigenous Australians (PDF 265KB)

Indigenous communities in remote Australia
Banking and financial services for Indigenous Australians
Telecommunications infrastructure
  Committee's view-telecommunications
Competency and confidence in using new technology
Financial literacy
Safety net banking account
  Committee's view
Book up
Education and training

Chapter 16 - The cultural environment (PDF 992KB)

'Money Dreaming'
Delivering culturally appropriate services
The Tangentyere Council
The Traditional Credit Union
  Limitations on expanding services
  The regulatory regime and compliance costs
  Competition with the traditional banks
The Cape York Community
Committee view
Rural Transaction Centres in remote Indigenous communities
Investment capital in remote Indigenous communities

Chapter 17 - Community service obligations (PDF 265KB)

Public expectations of financial services providers
The banks' awareness of community expectations
Financial institutions and community obligations
  Minimum standards expected of financial institutions
  Committee view
Community Service Obligation
  Imposing a community service obligation
  Licensing requirement
  Stronger government intervention
Access to finance and financial advice
The banks as invigorators and sustainers of social capital
Overseas models
  The United Kingdom
  United States of America (USA)
  Lessons for Australia
Local Government

Select Bibliography
(PDF Format Only)
(PDF 139KB)
Additional comments by Labor Members (PDF 186KB)
Appendix 1 - Submissions and tabled documents (PDF 130KB)
Appendix 2 - Public hearings and witnesses (PDF 133KB)
Appendix 3 - State Government exemptions for stamp duty on refinanced loans (PDF 148KB)
Appendix 4 - Points of presence by State and service channel (June 2001) (PDF 101KB)
Appendix 5 - Banking and financial services in regional and remote Northern Territory (PDF 147KB)
Appendix 6 - Towns assisted by Creditcare to regain financial services (PDF 90KB)
Appendix 7 - The Government's response to the recommendations of the regional telecommunications inquiry (PDF 205KB)

For further information, contact:

Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services
PO Box 6100
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 3583
Fax: +61 2 6277 5719