Howard's End: Oz Banks Admit "Social Obligations"
In lowering transaction fees and introducing other measures aimed at improving their image, Australian banks have admitted for the first time that they have "social obligations" to the community. John Howard writes.
Australian banks will try to improve their image by offering five million disadvantaged Australians access to cheaper bank accounts.
The banks, who also operate in New Zealand, have given no indication whether they will now offer the same lower fees and conditions to New Zealanders.
Under the new industry standard announced yesterday, three months notice will be given of branch closures while the elderly and disabled people will have access to better services.
The accounts will have no account-keeping fees, six free non-deposit transactions a month, no minimum monthly balance and unlimited free deposits.
Australian Bankers' Association (ABA) chief executive, David Bell said, " The message is: the banks have heard the community, we understand we have social obligations and today we're delivering an action plan to meet those social obligations."
Australian banks made a $ AUD 9 billion profit last year.
The Australian social obligation safety net is still much less generous than that offered by banks in countries such as Britain and the United States.
Basic accounts in Britain have unlimited free transactions, in Canada they allow eight to fifteen free transactions a month and in the United States, basic accounts offer eight free transactions each month and often many more depending on the banking regulations in each State.
New Zealand looks to be the poor cousin and seems to be at the bottom of the heap having some of the highest bank charges in the world with no end in sight.
The ABA proposal, which provides that rural communities be given three month's notice before bank closures, is also less notice than is required in Canada where regulations require four months notice before a bank closure in a rural area and three months in urban areas.
That the Australian banks have finally admitted they have social obligations is a good start.
Now, it is up to each New Zealand consumer, the politicians, and the media to start asking questions about why New Zealanders shouldn't receive the lower banking fees and conditions as other countries. After all, the banking sector which operates in New Zealand is owned and controlled by essentially the same overseas owners.
The politicians should do as much for New Zealanders about banking charges as they did about Monteith's beer. I'm sure we'll all watch with interest.