Australia needs a public bank and licensing Australia Post to operate as “PostBank” would fill the bill, according to a new report.
Think tank Per Capita has taken its lead from the Hayne royal commission report, which said that many Australians did not have adequate access to basic financial services, in recommending that the country’s banking system should not be left entirely in private hands.
Its report, PostBank: Filling a Void, Securing Essential Services, looks at banking services offered through postal services in other countries and argues the same could work here.
“A government owned bank offers many benefits to Australians, including improving services for currently underbanked customers, especially in rural and regional areas, improving standards across the financial services industry, and providing stability to Australia’s economy in times of volatility in international financial markets,” the report says.
Shadow Treasurer Jim Chalmers told The Sydney Morning Herald that the idea was worth considering.
Per Capita likens banking services to healthcare and education, where public and private provision of services meet different needs.
“There are many reasons to treat banking as essential economic infrastructure. Like roads, ports and train lines, the banking system is essential for the functioning of a modern state.”
The report draws on research that suggests countries with substantial publicly owned banks are likely to outperform economically. “This is explained by the fact that a public bank can be mandated to serve public or national interests, rather than simply serving commercial interests.”
The paper also argues that a government owned bank taking a lead in such areas as loan pricing and services would be an effective way of encouraging better practices from private banks.
The United Kingdom, New Zealand, France, Switzerland and Italy have post office banks. New Zealand’s Kiwibank attracted 500,000 customers within four years of starting operations.
Another argument is that “PostBank” would help Australia’s Post maintain the viability of its other services.