The Shire’s response to bank branch closures across regional and remote Australia.

The Shire of Ashburton is located in the Pilbara Region in West Australia and is a driving economic force delivering 12% (approximately $39 billion) of WAs Gross Regional Product in 2022. The Shire is a nationally significant producer of Australia’s export wealth, exporting $20.26 billion of Goods and Services in 2021/22.

Despite the immense economic contribution, the Shire’s towns, like many Australian regional and remote towns, have been losing essential services including banking.  The town of Tom Price recently experienced its only bank (Westpac) in the Shire close its doors late 2022.  There is now no physical banking presence across the entire Shire! Some of our Pilbara residents now travel a 9 hour return trip to access face-to-face banking.

In March 2024, BankWest announced closure of all 60 of its branches across Western Australia by the end of the 2024 – another 17 regional communities losing face-to-face services. In December 2023, APRA stated that more than 2100 Australian bank branches have closed across the country since 2017, with regional areas suffering a 34% loss in branches and the number of ATMs across the country also reducing by 50% in regional areas.  In 2023 alone, 420 bank branches have closed nationally.

The social, financial and economic impact of this accelerating inequality effects:

• Vulnerable members of our community
• Aboriginal peoples and their communities
• Sustainability and productivity of businesses
• Community safety, participation and wellbeing
• Survival of community groups and clubs
• Access to credit and other core financial services including insurance
• Reliance on technology already compromised due to the regional digital inclusion gap

No access to face-to-face banking services results in limited to no financial relationships or financial education, impaired financial literacy, and less access to financial information relevant for credit assessment and decisions for business and personal needs. 

In addition to the obvious impact of branch closures, there is also the hidden and more insidious impact that goes to the heart of how we live, our sense of place, safety and identity.  Refer to the following reports for an overview of this impact.

With nearly 7 million people (approximately 28% of the population) living in regional and remote Australia, there is now an opportunity to develop a practical and pragmatic solution that provides essential financial services, carries a different risk profile, leverages not only the social license afforded to the LG sector but leverages the sector’s mandate as a not–for profit, governing local communities.

The participation of the LG sector in a regional and remote financial services solution needs to be researched and modelled.  Potentially manifesting as a Local Government Bank of Australia (the Bank), the Bank could have a primary purpose of providing essential community banking services and facilitating investment in regional Australia. The Bank could be driven by a social licence benefit and operate on a not–for–profit basis with surplus funds reinvested back into local communities, geared to higher risk levels to promote investment in regional communities, businesses and the regions. Having this essential service ensures that regional Australia remains a real and viable destination for businesses, employees, families, residents and visitors.

With the support of WALGA, the Shire is seeking the support of local government’s Australia–wide to consider an alternative financial services community–centric model. A model that draws on the sector to be agile and innovative in how it can invest in community and seeks the Australian Local Government Association’s consideration to leading a feasibility study for the communities across regional Australia and the seven million people that will benefit from a new community platform for banking services and investment.

To progress the initiative and create a national conversation, The Shire of Ashburton has submitted a Motion to the ALGA National General Assembly 2024 as follows:

That the Australian Local Government Association engage a consultant to investigate the feasibility of establishing a Local Government Bank of Australia or alternative model for regional Australia, which includes how the local government sector can facilitate or deliver face-to-face banking services; and requests that the Australian Local Government Association reports back to the local government sector at the 2025 National General Assembly with the outcomes of the feasibility report.

For further information, please contact:

Ingrid Bishop, Acting Director Infrastructure Services, [email protected]; M 0457 629 920