SUBMISSION TO THE RURAL AND REGIONAL AFFAIRS AND TRANSPORT REFERENCES COMMITTEE BANK CLOSURES IN REGIONAL AUSTRALIA INQUIRY
This submission is on behalf of independently owned retail newsagency businesses that belong to the newsXpress marketing group.
More than 75% of newsXpress businesses are in regional Australia and most of these have been negatively impacted by bank closures.
Some of these businesses were, themselves, agents for banks, and have had the agency business taken from them, closed. In these businesses the impact has been even more considerable.
Many of the remaining 25% of our members, in city and suburban areas have also been impacted by bank branch closures.
The banks have been poor at communicating their closure decisions and vague in explaining reasons for closures.
While there has been less cash pass through the business in favor of electronic transactions in recent years, cash remains the biggest method of payment for goods and services sold by local newsXpress businesses. This is because of the type of products sold.
Bank branches are important for not only banking takings for but also for accessing banknote and coin change. With the average transaction value in our local retail businesses under $15.00, having available change is an important need.
newsXpress businesses impacted by bank closures have a higher cost of doing business as a result due to:
- The need to drive to another town to do the banking for the business. The drive time each way ranged from 30 minutes to close to 2 hours.
- Carrying more cash, especially smaller denomination notes and all denominations of coins, so the business does not run out between banking days.
- The need, for some, to switch banks because the usual bank for the business is now several hours away.
- Covering the cost of growing EFTPOS payments due to the fixed price nature of much of what is sold in a typical newsXpress business.
Bank branch closures have added on average for those newsXpress businesses impacted, additional operating costs of between $250.00 and $500.00 a week.
With many newsXpress businesses selling lottery products, the call on cash for the payment of prizes varies, and often cannot be adequately predicted.
In addition to the actual additional cost is additional pressure on the business owners since going to the bank no longer can be done in a few minutes. It needs to be scheduled, rostered for.
There is an emotional cost to bank branch closures, too, as there is more pressure on managing cash since the safety net of the local bank branch has been removed. This extends to the drive to the further away bank branch with cash takings from several days and worry about the safety of this compared to banking at the local branch across the road.
POSSIBLE SOLUTIONS
- A communal banking model. In a town where a branch is not viable, the banks could work together, maybe under a government overseen storefront, to offer banking services for all Australian banks.
- Mobile banking. Require the banks to provide regular access to their services through a mobile banking service that visits each impacted town.
- Easier agency access. If existing banking agencies could be enhanced to be agents for all banks this could open more local banking options.
- Reduced fees. Where banks withdraw, or have withdrawn, local bank branch services, require them to compensate business customers with significant fee reduction, to help them feel the cost of their decisions.
The newsXpress retail businesses impacted by local bank branch closures feel ignored by their banks, not listened to and unable to rely on a reasonable resolution.
They feel left to figure out what to do themselves so that the banks can maximise shareholder value.
While maximising shareholder value is the most important requirement for the board of any public company, banks often pitch themselves as being more community engaged and socially aware.
The closure of bank branches in regional Australia does not reflect care or concern for the regional Australian community.
Sincerely and on behalf of all local newsXpress member retail businesses,
Mark Fletcher
Managing Director
Mobile: 0418 321 338.
Email: mark@newsxpress.com.au
