Pearls and Irritations

A public forum in Parliament House on 7 September demonstrated the growing political appetite in Australia for a national post office bank that can serve communities and force the Big Four banks to compete.

The forum was hosted by the Licensed Post Office Group (LPOG), which represents the interests of the almost 3,000 small business community post offices across Australia.

Four politicians from four different political parties participated, and were joined by staffers representing many more MPs and Senators, stakeholders, a former Productivity Commission economist, an award-winning journalist who has documented regional bank branch closures, and members of the public who are strong supporters of the policy.

The common message from all the speakers was that a public postal bank is a win-win solution for Australia’s economy and people.

Stakeholder support

LPOG Chairman Andrew Hirst and Executive Director Angela Cramp chaired the forum in Parliament, explaining that a postal bank is a policy they have supported for many years.

The LPOs and the postal workers, represented by the Communications Electrical and Plumbers Union (CEPU), are the biggest direct stakeholders in Australia Post.

The CEPU are also strong supporters of a postal bank; although unable to participate in the forum, for which they sent their apologies, all attendees were given a copy of a 2020 CEPU-commissioned report by Per Capita, “PostBank: Filling a Void, Securing Essential Services”.

The LPOG were the biggest defenders of Christine Holgate when then-Prime Minister Scott Morrison in 2020 bullied her out of the job of Australia Post CEO, and it was their support that led to the Senate inquiry and dramatic hearings in 2021, which cleared Ms Holgate and exposed the government’s plot to privatise Australia Post.

More than any other stakeholders, the LPOG appreciated the importance of Christine Holgate’s vision to expand banking services through post offices and, ultimately, to establish a postal bank, both to serve local communities and to increase revenue for Australia Post and its licensees.

Mr Hirst opened the forum by emphasising the post offices’ orientation to serving communities.

“We service the community that the banks don’t want to know about,” he said. “We service the community that big business doesn’t want to know about. They’re our bread and butter; they’re our people.”

LPOs know better than anybody the importance of face-to-face banking services, and the ongoing demand for those services.

When banks close branches, claiming customers are banking online, the small business owners who need to deposit and withdraw cash, the elderly, disabled, and anyone who wants the certainty of face-to-face services, queue at post offices to do their banking.

The current service that post offices provide, Bank@Post, is tenuous, as the private banks it represents are unenthusiastic about having to pay for the service; indeed, ANZ refused, and the other three major banks took advantage of the turmoil following Christine Holgate’s removal to reduce their payments drastically.

They also charge their customers heavy fees of up to $4 and $5 for using the service, of which only about $1.40 goes to the post office that actually serves the customer.

A dedicated, government-owned postal bank is the win-win solution, Mr Hirst said repeatedly, as using the existing post office network will ensure banking services are affordable, and the revenue from banking will support the viability of post offices.

Mr Hirst acknowledged the presence of award-winning journalist Dale Webster, whose reporting on the true extent of regional bank branch closures through her news service The Regional won her the Melbourne Press Club’s 2021 Quill award for rural and regional journalism and the Walkley Foundation’s 2022 June Andrews Award for Freelance Journalist of the Year.

The issue of bank branch closures, especially in regional Australia, is driving much of the support for a post office bank that can guarantee banking services for all communities but also force the major banks to compete.

The night before the forum, Strathfield City Council in Sydney became the fifth council across Australia to pass a resolution endorsing the postal bank policy, out of concern for the impact of bank closures and lack of competition on their communities.

New Zealand experience

Former New Zealand Cabinet Minister Matt Robson was the featured speaker at the forum, recounting the successful campaign to establish NZ’s post office bank, Kiwibank.

Referencing the long tradition of public banking in both New Zealand and Australia, where he was born, Mr Robson observed: “Our forebears in this, in all parties, recognised that unrestrained financial power was a danger to countries, because you become a hostage to that unregulated financial power, and banking is at the heart of that financial power, of what countries need to exist.”

Mr Robson was a member of the Alliance, led by former NZ Labour Party President Jim Anderton, who had broken with Labour over the privatisation of the Bank of New Zealand in 1987.

Without a public bank, NZ’s private banks, all Australian owned, did what their Australian parent banks did: gouge customers with high fees and fat interest margins, and shut branches.

When Jim Anderton led the Alliance into a coalition government with the Helen Clark-led Labour Party in 1999, it had one policy demand—re-establish a public bank, a policy which the New Zealand people had dubbed “Jim’s bank”.

NZ Post approached the government with the business case for the public bank being a postal bank, and eventually the extremely reluctant Labour Party agreed to give Jim Anderton his bank.

Expecting it to fail, the government would only invest $60 million, and Helen Clark and her Labour Ministers loudly proclaimed they wouldn’t bank with it.

Within three years, however, Kiwibank had hundreds of thousands of customers, had repaid the $60 million, and Helen Clark and her ministers had opened their own accounts.

“It’s been an enormous success”, Matt Robson said, “because we showed we could put a bank up, and it could compete.”

He emphasised that the immense popularity of Kiwibank with the people of NZ has shaped the politics, such that even ideological opponents of government involvement in banking who have tried to weaken Kiwibank know they cannot privatise it.

He also observed, having spent the week in meetings with Australian politicians, including with two government Ministers, that the campaign for a postal bank in Australia is more advanced than it was in NZ when the Alliance entered government in 1999, as there is already cross-party support in Parliament for the policy, whereas in NZ the Alliance had been a lone voice.

Political endorsements

The existing political support for a public post office bank is unusually bipartisan, ranging from the Greens to One Nation, Katter’s Australian Party, many individual members of the Nationals and ALP, including senior figures, and even members of the Liberal Party.

All parliamentary political parties were represented at the forum, either by politicians or their staffers.

Member for Kennedy Bob Katter, whose support for Christine Holgate and the LPOG was pivotal in forcing last year’s inquiry, is a staunch advocate of public banking, and spoke of the potential for investment in economic development.

Mr Katter is preparing a bill, called the Commonwealth Postal Savings Bank Bill, which would establish a Commonwealth government-owned banking corporation, separate from Australian Postal Corporation with its own board and management, but with a permanent agency agreement to operate through post offices.

The bill’s provisions include that the bank is guaranteed by the Commonwealth government; the agency agreement must ensure that Australia Post and the LPOs receive full and fair payment for providing the infrastructure for banking services; the bank will provide full banking services, including taking deposits and advancing loans; the bank may lend for housing, small and medium enterprises including farms, and local, state and federal infrastructure projects; the bank must act in the public interest; and the bank must give priority to access to banking services.

One Nation Senator Malcolm Roberts said a public bank is needed to hold the private banks accountable and to ensure banking services for all communities.

Liberal Senator Gerard Rennick described himself as a passionate backer of a people’s bank, both as an essential service, and as an instrument of monetary policy to direct investment into the economy.

National Party Senator Ross Cadell attended but was called back to the chamber before he had a chance to speak.

Closing the forum, LPOG Executive Director Angela Cramp said post office people were delighted at the support for a postal bank.

“We have the network; we’re ready for the work,” she said. “Bring it on.”