Rural Australians left up in the air as banks shut down

The chairman of 197-year-old farming operation MDH, which runs 150,000 cattle across 14 properties in Queensland's outback, has had to go to extraordinary lengths to do the most basic business.

"To pay the wages on occasions we've had to get in a helicopter and fly over the tower, because the strength wasn't good enough to get out to the property," Mr McDonald told a Senate inquiry into rural bank closures.

Though connectivity is improving through satellite technology, there are still some "real dramas" getting online, Mr McDonald said.

The year-long inquiry was set up to examine the increasing closure of banks across rural Australia, where 798 branches have shut in the six years to June 2023.

The rapid shift has left an estimated 600 towns without a bank, including prosperous mining and farming regions like Coober Pedy, in South Australia, and Western Australia's Tom Price.

Business owners in those remote areas have also been forced to take to the skies to do their banking, flying their cash takings to a city branch.

"Generally, I stuff it in my suitcase ... and take it all the way to Perth," WA tourism operator Drew Norrish said frankly at a public hearing in March.

The major banks told the inquiry that more than 95 per cent of their transactions are digital, demand for cash has dramatically reduced and face-to-face transactions are swiftly becoming a thing of the past.

While shining a spotlight on the actions of the big four banks, the 600 written submissions and 13 public hearings also laid bare the vast differences between life in the cities and the bush.

Though bricks and mortar banks may seem obsolete to some in the digital age, they are considered a symbol of prosperity in regional towns and remain central to the social fabric.

"Loss of banks adds to the loss of professionals in a small community, and this has knock-on effects," Tasmanian Women in Agriculture vice-chair Diane Barr told the committee.

"The schools close and then the GP leaves, and it really is the death knell to small regional and remote areas."

The council in Cloncurry, a Queensland farming town that fought the closure of its Westpac branch, calculated the region loses $4 million in rates, rent and retail spending if just six people move away for good.

Elderly and vulnerable people, who are less likely to take up online services due to cost and digital literacy barriers, are also at a loss when a bank leaves a country town.

Maisie Robinson still has the paper passbook she received from the Commonwealth Bank in Junee, in the NSW Riverina, in 1943.

"I need cash because all this technology came in after I grew up," Mrs Robinson said at a September hearing in her hometown, months after the community successfully rallied to halt the closure of its last bank.

She held up the frayed and greying passbook, dotted with cursive script and bank stamps.

"I couldn't use that ATM out the front to save my life. I was too busy raising a family of five kids."

The banks are applying a broad societal shift to rural Australia long before it is ready, the inquiry found when it handed down its report last week.

"The removal of branches has occurred well ahead of advancements in digital connectivity and digital inclusion across regional and remote Australia," Indigenous Consumer Assistance Network operations manager Jillian Williams said.

"This means that even if people wanted to move to online banking, the lack of mobile connectivity and a reliable internet connection means they simply can't."

The Australian Digital Inclusion Index, which measures rates of technological access, affordability and ability, found almost a quarter of the population is "excluded".

While that figure has declined over the years, it represents a significant amount of Australians who do not have the resources to fully participate in social, economic and civic life.

Exclusion is more pronounced with remoteness, RMIT University researcher Daniel Featherstone said.

"There's an imperative that the banks, if they are withdrawing physical facilities, have a responsibility to ensure that customers have the access, the skills, the trust, to safely use their online services." Dr Featherstone told AAP.

The university's research also found banks were closing their doors in precisely the areas they are most needed.

More than a third of people in regional areas experience affordability stress when paying for high-quality internet, while online banking leaves older people open to financial abuse.

Academic Andy Schmulow from the University of Wollongong's law school said banks have a clear social obligation to serve Australians, given the federal government's guarantees on deposits.

Their essential role in daily life was recognised by a similar inquiry in 2004, when many of the major banks said they would maintain their physical presence.

"All they've done is shut branches," Dr Schmulow said.

"So they've lied to us, they've deceived us, they've misled us."

The latest inquiry's key recommendations included that a banking regulator have power to approve or defer closures.

The government should also set up an expert panel to look into the feasibility of a publicly-owned bank, possibly using the Australia Post network, the committee said.

After the report was published, the banking sector reiterated that the vast majority of transactions are carried out online.

"Given the past catastrophic failures of state-owned banks in this country, Australians should be wary of suggestions of a new taxpayer-funded government-owned bank." Australian Banking Association chief executive Anna Bligh said.

"Further, a large government-owned bank would put the ongoing viability of the many small and medium sized banks that serve customers in regional and rural Australia at serious risk."

For now, regional communities are dealing with more closures, including 11 NAB branches across NSW, Queensland, South Australia and Victoria before the end of the financial year.

A plea from Junee local Greg Zakharoff will likely resonate for many in those communities.

"The banks have to listen to people: the farmers out here, the graziers, the people in the town ... are the salt of this country," Mr Zakharoff told the committee.

"So I'm asking the banks to really reconsider what they're doing, look after their people, make life easier for everybody, don't close everything down."

Australian Associated Press