Banks are closing up shop in country towns with 2,000 banks disappearing since 2017! However, the good news for the rural community is that the Senate is inquiring into how banks can stay open in the bush. The bad news is it could cost $370 million in fees plus higher interest rates to keep then open.

Worse still, history and a government number cruncher says the banks would pass these costs on to all customers!

The AFR’s Lucas Baird reports that Nationals deputy leader in the Senate asked the Parliamentary Budget Office to cost a 10% increase in the bank levy to bankroll bush banking. Here were the findings:

1. It would raise $498.8 million over 2024 to 2027.
2. 75% of this would be passed on to bank customers.
3. Fees on bank products would be lifted.
4. Interest rates on mortgages would be lifted.
5. Interest payments on savings would be lowered.

Who’d think banks would do that? All of us! That’s why I say if you want to get even with high-charging banks, then simply become a bank shareholder!

The levy was a Morrison Government slug from 2017 and is a 0.015% tax per quarter on banks with liabilities over $100 billion, which hits the big four plus Macquarie and raised $1.6 billion in 2022-23.

Senator Canavan wants the banks to pay the levy to keep banks open but it the PBOs analysis says banks will simply pass it onto their customers, so all customers will be subsidising our country cousins.

The alternative will be a greater reliance on Australia Post, which has taken on the banking services of the CBA, NAB and Westpac but not ANZ, with the latter’s CEO Shayne Elliott ironically complaining that Aussie Post is over-charging!

“I am half the size of CBA, yet Aussie Post wants to charge me the same flat cost for that service, and we didn’t think that was fair,” he told the AFR.

It would be great for lower income bank customers to get cheaper bank products from banks because they’re poorer than richer customers. Yeah, but that’s never going to happen.

The idea of a bank CEO crying poor mouth is really quite amusing.