Community anxiety over banks

The chairman of Australia’s first community bank has joined a chorus of protest over a decision to remove flexibility involving State Government banking services.

Rupanyup and Minyip Community Bank chairman Peter Niewand said a government mandate to remove the opportunity for state-owned organisations such as public schools and hospitals to bank with community bank branches was a major blow.

He said the move was likely to impact heavily on a banking model that had, since inception more than 20 years ago, helped consolidate community assets as well as banking services in regional areas.

“Being unable to offer banking services for state-owned assets that operate in country towns and centres will seriously impact on community banking’s bottom line,” he said.

“The community banking model involves a profit-sharing arrangement where banks use money generated from accounts to provide investment directly back into community projects.

“It is a sound model that works. Without the contribution of these large players, which are integral parts of local society, our communities will be the loser.”

Rupanyup-minyip Community Bank, part of the community Bendigo and Adelaide Bank chain, pioneered the community-banking model.

In an effort to save, consolidate and grow services, more than $1-million has flowed into community projects in the towns since the bank’s launch.

Mr Niewand said two decades of volunteer work had gone into getting the community banking formula right across Australia.

“How it’s evolved has been based on a grass-roots understanding of circumstances, particularly in regional areas, and a need to maintain or provide face-to-face banking services,” he said. “It’s also providing employment for locals.”

Regressive move

Mr Niewand said former Labor Premier John Brumby had joined Bendigo Bank former managing director Rob Hunt in enthusiastically backing the concept 20 years ago.

Mr Niewand was also echoing the sentiments of Member for Lowan Emma Kealy and Member for Ripon Louise Staley in calling for the government to remove the mandate.

Ms Kealy said the government needed to change its decision.

“Labour announcing that stateowned organisations must close accounts with local banks and transfer their money into centralised accounts in Sydney-based Westpac Bank branch is a regressive move,” she said.

“We are already seeing the big banks close small country branches and this decision is likely to result in even more closures.”

Ms Kealy said community banks provided critical support for many ‘local’ projects.

“Many of our local schools and hospitals have large accounts with their local community bank,” she said.

“Closure of these accounts will mean these community banks will be unable to adequately fund the public facilities and projects they support.”

Ms Kealy raised the issue with Victorian Treasurer Tim Pallas in parliament yesterday, asking him how he planned to compensate communities that would lose a major funding opportunity.

Bendigo and Adelaide Bank is one of Australia’s largest community banks and has invested almost $114-million in Victorian communities since 1997.

In 2017-18 Bendigo and Adelaide Community Banks funded 4584 Victorian community projects valued at $12.9-million.

“If Premier Daniel Andrews had any idea how rural and regional communities worked, he would not be making this decision to move local money out of town,” Ms Kealy said.

“It’s a complete disregard for why communities needed this banking model.”

Several regional centres across Lowan and Ripon electorates feature community bank branches.