Held to Ac­count

The Monthly (Australia) - - CONTENTS - by Rus­sell Marks

Wugu­larr, also called Beswick, is a re­mote com­mu­nity on Ja­woyn land, about 90 min­utes’ drive east of Kather­ine in the North­ern Ter­ri­tory. Un­til the mid 1990s, it was com­mon for lo­cals to do their bank­ing with pass­books at the com­mu­nity’s Aus­tralia Post out­let, which was au­tho­rised as an agent for the Commonwealth Bank of Aus­tralia. But pri­vati­sa­tion saw CBA with­draw its ser­vices from (un­prof­itable) re­mote com­mu­ni­ties. Now there’s a sin­gle ATM in­side what the lo­cals call the new store, opened with much fan­fare in 2015. The “big four” banks of­fer fee-free ac­counts, but they have lengthy forms and re­quire iden­tity pa­pers many peo­ple don’t have. Their “se­cu­rity ques­tions” (What’s the name of the first street you lived on? What is your mother’s mid­dle name? What was your child­hood phone num­ber?) make no sense in re­mote com­mu­ni­ties. Then there’s the cu­ri­ous re­sis­tance dis­played by some Kather­ine branches to serv­ing peo­ple from the sur­round­ing com­mu­ni­ties. One par­tic­u­lar bank’s feefree ac­count, which the bank’s call cen­tre and prod­uct

dis­clo­sure state­ments say is avail­able to all cus­tomers on Cen­tre­link in­comes, mys­te­ri­ously isn’t avail­able to par­tic­u­lar cus­tomers in the Kather­ine branch. Com­mut­ing from Wugu­larr to Kather­ine is not straight­for­ward, es­pe­cially for Astrid, a sin­gle mother of three in her 30s. Astrid doesn’t have a car or a li­cence. She can get lifts with fam­ily or friends if they’re go­ing into town, but then she’s de­pen­dent on their timetable – and of­ten they don’t have room for her kids, who go ev­ery­where with her. The not-for-profit Bodhi Bus, which is what passes for pub­lic trans­port in the re­gion, runs twice a week from Wugu­larr and costs $60 each way per pas­sen­ger. Of­ten it’s cheaper for Astrid and her fam­ily to sim­ply get a taxi, which can be a $400 round trip. In the wet sea­son, Wugu­larr can get cut off com­pletely. It was re­mote­ness and big four bu­reau­cracy that led tra­di­tional Yol­ngu own­ers on Milingimbi Is­land – off the Arn­hem Land coast – to es­tab­lish the Tra­di­tional Credit Union (TCU) in the mid 1990s. TCU has since opened branches in 12 other re­mote com­mu­ni­ties through­out the Top End, and has ATMs in a hand­ful of oth­ers (though not Wugu­larr, yet). It em­ploys more than 50 lo­cals in those com­mu­ni­ties, and has trained dozens more to Cer­tifi­cate II and III lev­els. Astrid has banked with TCU for more than a decade. For the past few months she’s been work­ing with Emily, a Kather­ine-based so­cial worker who was con­fused about why Astrid was run­ning out of money for food and elec­tric­ity to­wards the end of each week. The two sat down with Astrid’s bank state­ment in Oc­to­ber last year. Dur­ing Septem­ber alone, Astrid had been charged $145 in ATM and bank fees. In Au­gust, it was $167. In July, Astrid was charged nearly $278 just in bank fees.

When Astrid’s ac­count is over­drawn, TCU takes an­other $20. If she needs staff to help her make a trans­ac­tion over the phone, she’ll pay at least $6.50 – and up to $50 an hour.

Most Aus­tralians don’t read their bank state­ments every month, but fi­nan­cial il­lit­er­acy only goes some way to ex­plain­ing how Astrid and oth­ers in the NT’s re­mote com­mu­ni­ties can pay $200 a month in bank fees on Cen­tre­link in­comes. A quick glance at the TCU fee struc­ture (which is freely avail­able on­line) takes us fur­ther. Astrid’s “Ev­ery­day” ac­count costs her $5 every Fri­day just in ser­vice fees. It costs her $2 every time a trans­ac­tion is de­clined at an ATM, $3 to take money out of a non-TCU ATM (such as the one in Wugu­larr), and $2 every time she sim­ply makes an EFT­POS pur­chase. When her ac­count is over­drawn, TCU takes an­other $20. If she needs staff to help her make a trans­ac­tion over the phone, she’ll pay at least $6.50 – and up to $50 an hour.

ATM fees in re­mote com­mu­ni­ties were the sub­ject of mul­ti­ple re­ports some years ago. One by the Aus­tralian Fi­nan­cial Coun­selling and Credit Re­form As­so­ci­a­tion in 2010 led to a Re­serve Bank–bro­kered agree­ment to scrap ATM fees in re­mote com­mu­ni­ties. TCU was never party to that agree­ment, though at the time of writ­ing it is hop­ing to be very soon. But ATM fees are only the tip of the ice­berg. Like many in Wugu­larr and sur­round­ing com­mu­ni­ties, Astrid has a lot of di­rect deb­its. Busi­nesses reg­u­larly push these onto peo­ple in com­mu­ni­ties, os­ten­si­bly as a way of by­pass­ing reg­u­lar debt, which isn’t avail­able to them – but also to keep them con­sum­ing. One white­goods re­tailer in Kather­ine urges peo­ple to bring in their Cen­tre­link in­come state­ments to set up $10 or $20 weekly pay­ments via Cen­tre­pay. It then keeps that money in store held ac­counts. The in­ten­tion is to help lo­cals buy fridges and wash­ing ma­chines. In prac­tice, these ac­counts are of­ten used to pay for cheap re­place­ment mo­bile phones. Cen­tre­pay’s orig­i­nal pur­pose was to help peo­ple on low in­comes man­age util­ity bills. A rapid ex­pan­sion of “ap­proved busi­nesses” has led to much crit­i­cism and nu­mer­ous re­views, but no gov­ern­ment ac­tion. Astrid talks about cloth­ing out­lets that use Cen­tre­pay to help cus­tomers “book up” pur­chases, of­ten in the hun­dreds of dol­lars. “I don’t do book-ups any­more,” she says. “Last time the girl in the shop wanted me to keep buy­ing, keep pay­ing, and I couldn’t say no.” For peo­ple with very lit­tle dis­pos­able in­come, Cen­tre­pay and di­rect deb­its take huge chunks out of their weekly pay, so there’s of­ten not enough left for food and bills. And every time a di­rect debit is dis­hon­oured due to a lack of avail­able funds in their ac­count, Astrid and other TCU mem­bers are slugged $30. TCU di­rec­tor David Knights, also gen­eral man­ager of a big four bank, ac­knowl­edges that TCU’s fees are steep. But even he’s sur­prised at the fees Astrid has been pay­ing. Why are they so high in the first place? There’s a trade-off, Knights ex­plains, be­tween of­fer­ing ser­vices peo­ple in re­mote com­mu­ni­ties need – like in­stant card re­place­ments and specialised iden­tity proof for peo­ple who of­ten don’t have birth cer­tifi­cates – and en­sur­ing TCU is a go­ing con­cern. The fees come back to what Knights calls the “dis­or­di­nately high costs” of pro­vid­ing fi­nan­cial ser­vices in re­mote com­mu­ni­ties, to cover cash-han­dling (in­clud­ing fly­ing cash in and out of com­mu­ni­ties), train­ing for TCU’s lo­cal staff, and IT. “And we’re dif­fer­ent to the main banks, be­cause we don’t have huge cus­tomer de­posits to then lend out and de­rive in­come,” Knights says. TCU’s net in­ter­est in­come last fi­nan­cial year was just un­der $134,000; CBA’s was $17.6 bil­lion. “We have a very small lend­ing book, and there’s a much lower ca­pac­ity for our mem­bers to be able to bor­row.” With the fed­eral gov­ern­ment’s NT In­ter­ven­tion from 2007 came the Ba­sics Card, on which up to half an in­di­vid­ual’s Cen­tre­link in­come is quar­an­tined so that it can’t be with­drawn as cash (and spent on grog, ganja and porn, went the gov­ern­ment’s jus­ti­fi­ca­tion). Overnight, TCU’s as­set hold­ing (and in­come-earn­ing po­ten­tial) was slashed in two. A world away, the bank­ing in­dus­try is gear­ing up for the royal com­mis­sion. Most Aus­tralians in cities and towns pay noth­ing for their ev­ery­day ac­counts. In re­mote com­mu­ni­ties like Wugu­larr, peo­ple need ac­counts be­cause Cen­tre­link won’t pay into any­thing else. Astrid is wor­ried about what she pays in fees, but she isn’t ac­cus­tomed to imag­in­ing she can change what in­sti­tu­tions do to her. “Money some­times runs out, be­cause when my fam­ily comes to my house I like to feed them,” Astrid tells me. “But I still have no fur­ni­ture in the house.”

Most Aus­tralians in cities and towns pay noth­ing for their ev­ery­day ac­counts. In re­mote com­mu­ni­ties like Wugu­larr, peo­ple need ac­counts be­cause Cen­tre­link won’t pay into any­thing else.

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