The Australian’s 28 August report, titled “Government-owned bank created out of Australia Post back on Labor’s agenda”, suggests that a government-owned bank created out of Australia Post is back on Labour’s agenda.
The Australian Citizens Party (ACP) has dedicated the past four years to establishing a public post office bank. The ACP sees this model as the most effective means to achieve its goal of re-establishing a public bank in Australia, which has been absent since the privatisation of the Commonwealth Bank.
The ACP collaborated with the Licenced Post Office Group (LPOG), an organisation that advocates for the 2,850 licensees who operate the majority of the postal network as small businesses and strongly supports the establishment of a public post office bank.
LPOG acknowledges that ensuring the financial sustainability of the postal network relies on the bank’s revenue. In turn, this guarantees that all communities have continued access to two vital services: post offices and face-to-face banking services.
Other strong supporters and advocates of a public post bank include:
- Christine Holgate, the former CEO of Australia Post, who played a significant role in the establishment of a post bank before her abrupt departure under Scott Morrison’s leadership.
- The Communications, Electrical, and Plumbing Union (CEPU) is the union that represents postal workers.
- The CEPU commissioned the Per Capita Public Policy Institute to write the excellent report “PostBank: Filling a Void, Securing Essential Services” in 2020, which introduced ACP to the post-bank model of a public bank.
- There are numerous prominent economists who advocate for a post-bank system to introduce necessary competition in order to break up the Big Four banking oligopoly.
- Independent politicians such as Bob Katter, Malcolm Roberts, Gerard Rennick, and the Australian Greens, along with numerous politicians from both major parties’ backbenches, are present.
The Senate Rural and Regional Affairs and Transport Committee’s extensive enquiry into bank closures in regional Australia greatly influenced the campaign. Senator Matt Canavan chaired this 15-month investigation and revealed the private banks’ disregard for their customers and communities. During the hearing in Canberra on 1 December 2023, the ACP, LPOG, and Per Capita all testified in support of establishing a public post bank as a solution to the issue of bank branch closures. They argued that establishing such a bank would ensure that the communities abandoned by the private banks continue to have access to banking services. Additionally, they believed that introducing competition through the bank could potentially discourage further branch closures, similar to the impact of New Zealand’s public post bank, Kiwibank, upon its establishment in 2002.
Senator Canavan suggested that the government should consider forming an expert panel to assess the feasibility of creating a public bank, potentially using the post-bank model as a reference.
The Australian reported that the government is considering a proposal in response to the concern over bank branch closures.
How it should work
A government-owned post office bank will provide Australians with the following:
- A strong focus on, and continued dedication to, in-person assistance and availability of cash;
- A revenue-sharing formula with post offices supports the funding of staff, infrastructure, and equipment, thereby ensuring the long-term sustainability of the postal network;
- Secure deposits guaranteed by the government;
- Offering low-interest, flexible lending options that prioritise sectors often overlooked by private banks, such as small businesses and farms, community services and infrastructure, as well as personal loans;
- The federal government, along with state and local governments seeking to reduce expenses, favors this banking services provider.
- There is a well-defined strategy to expand its reach, which involves exploring development lending, setting up a government insurance office, and tackling other vital sectors of the economy.
This bank is exactly what Australia needs. Australians should express their expectations that the government will fulfill this need.