The power of Senate inquiries: Westpac announces 3-year moratorium on regional branch closures

Westpac has sought to pre-empt the recommendations of the Senate inquiry into bank closures in regional Australia by announcing a moratorium on regional branch closures until 2027.

The inquiry, initiated by Senator Gerard Rennick and chaired by Senator Matt Canavan, is the most comprehensive parliamentary examination of bank behaviour in decades, receiving over 500 submissions, lasting 16 months, and holding 13 hearings from one end of Australia to the other, including Launceston in the southeast and Tom Price in the northwest; its report is due on 16 May.

It has already had significant successes, with Westpac in May 2023 reversing the planned closure of eight branches, followed by Australia’s biggest bank, CBA, announcing in July 2023 a three-year moratorium on branch closures and the reversal of its planned closure of its branch in Junee NSW, which saved more than 300 branches.

Now Australia’s second-biggest bank is following CBA’s lead with its own three-year moratorium, which is a reprieve for more than 180 communities.

Jason Yetton, CEO of Westpac’s Consumer banking, said to the 30 April Australian Financial Review: “We’ve heard the feedback from customers about the impact of branch closures in the bush and understand they face many challenges such as limited internet connectivity and increased travel times to their nearest branch.

“This commitment will support customers and employees who live and work in over 180 regional areas and means we continue to give customers who prefer to do their banking in-branch access to face-to-face service for their banking needs and cash transactions.”

Australian Citizens Party Research Director Robert Barwick said Westpac’s announcement demonstrated the sheer importance of Parliament scrutinising the Big Four banks closely.

“Thanks to this inquiry, the banks have been squirming for 16 months, so we’ve finally seen some responsible decisions from some of them”, Barwick said.

“If it wasn’t so serious it would be funny—the inquiry found Westpac did zero consultation before closing branches, so it took a government-funded inquiry for Westpac to hear what they should already have known.

“Under their sham ‘self-regulation’, the banks aren’t used to this kind of intense scrutiny, which is a lesson for Parliament—they need more of it.

“And now they are extra nervous, waiting for Senator Canavan’s final report on the 16th, so Westpac has tried to pre-empt it with this announcement.”

Barwick said the banks are most nervous about the debate that the inquiry has super-charged as to whether Australia should re-establish a public bank, like the original Commonwealth Bank, to break up the Big Four banking oligopoly.

“A public bank is the private banks’ worst nightmare”, he said. “They whined for years about how unfair it was to compete with the public Commonwealth Bank, and got it privatised; but since the big banks haven’t had to compete with a public bank they’ve turned into monsters, gouging and exploiting customers for massive profits, without wanting to provide even basic services to earn those profits.

“It’s the banks’ appalling behaviour that has put the option of re-establishing a public bank front and centre of this inquiry”, Barwick declared. “At least three of the Senators who have participated in the hearings have enthusiastically endorsed it as a solution, and the ACP, the Licensed Post Office Group, and the Per Capita think tank were all able to testify to advocate for establishing a public post office bank like Kiwibank in New Zealand when it was established in 2002.”

Barwick added that public bank competition is necessary because the Big Four can’t be trusted, as they always look for ways to get around the law and their commitments.

Click here to sign the Citizens Party’s petition for a post office people’s bank.