National Australia Bank Branch Closures
Page: 1138
Urgent Motion
Mr W. D. SMITH (South Coast) [3.52 p.m.]: I move:
That this House :
(1) calls on the National Australia Bank to immediately scrap its decision of last week to close 14 branches in country New South Wales, including Milton, Culburra and Bomaderry branches in the Shoalhaven;
(2) expresses its support for the 2,050 workers who were yesterday forced onto the unemployment line by the National Australia Bank; and
(3) notes that studies have shown closing rural bank branches leads to a population decline in these small towns.
The National Australia Bank [NAB] is a disgrace. For too long the banks of Australia have had it all their own way. Now the National Australia Bank has seen fit to close 14 of its vital country branches in New South Wales and a total of 56 branches across the nation. Apparently the $2 billion profit that the National Australia Bank made last year is not enough and closing a few country branches is the way to go. That is how the bank believes it will ease the pressure on its bottom line. How much profit is enough? A $2 billion profit is apparently not enough for those running the National Australia Bank. The citizens of New South Wales who contributed to the bank's profit have been slapped in the face for their loyalty. The National Australia Bank's decision is tantamount to economic vandalism in country New South Wales.
Country people have a strong sense of loyalty to their banks and they have been betrayed. With these bank branches will go the fabric of small country communities. Banks are integral to the existence and survival of country towns. The ability of small business to operate and attract people to these towns will suffer, as will the ability of the community to access adequate banking services. The bank's spokesperson, Tamsin Beale, told the Sydney Morning Herald on 4 April:
No country community will be left without access to banking facilities.
Tell that to the people of Milton in my electorate, who will be left without banking services when the National Australia Bank moves out. Ms Beale should also speak to people in the neighbouring communities of Ulladulla, Manilla, Gunning, Warialda, Boggabri, Baradine and Culburra, all of whom will be in the same dire situation. Those seven communities will have no bank branches and must depend upon at best unreliable telephone and Internet banking services. Residents of those seven communities will be left without access to small business loans and home loans and will be unable to discuss their day-to-day banking issues with anyone face to face.
Make no mistake, local businesses will suffer as a result of this decision. Many business owners to whom I spoke yesterday expressed their anger at the National Australia Bank. Some of them had moved their business and family accounts to the National Australia Bank because of the convenience of banking in their local communities, and they now feel very let down. For example, the town of Gunning has a population of 600, two pubs, a post office and a Chinese restaurant. It also used to have a bank. The townspeople fear that they will lose their livelihoods when the NAB branch is closed. The proprietor of Gunning general store, Marilyn Lawton, is one business operator who fears the worst. She is quoted in today's Australian as saying:
I'm worried people from outlying areas won't come here anymore.
Businesses, such as the local butcher, closed their doors after pensioners were forced to drive 50 kilometres to Goulburn or Young in order to access their bank accounts. I am sure honourable members on both sides of the House agree that the National Australia Bank has committed an act of sabotage in these communities. Their economic growth and development relies on adequate access to services—particularly the financial services offered by the banking sector. These communities will be left without facilities vital to sustaining new businesses.
Another eight bank branches will be closed in the towns of Gulgong, Urunga, Brunswick Heads, Bangalow and Molong. The National Australia Bank has called this process of ripping branches out of country areas its "positioning for growth" strategy. What a ridiculous term! The only things growing in these communities is pain caused by the closure of those branches and anger towards banks in general. The bank has paid little attention to small communities across the country that will be left without any bank branch. It has paid even less attention to the almost 2,500 workers in its worldwide operations whose jobs will be axed. The only thing the bank has paid real attention to is the needs of its wealthy, mainly city-based customers.
It is all about the bottom line. In a recent statement the National Australia Bank Chief Executive Officer and Managing Director, Mr Frank Cicutto, claimed that these cost-cutting measures would save the bank some $370 million. So to improve the bank's bottom line NAB executives have started slashing. A total of 56 rural bank branches will close and the jobs of almost 2,500 people will go with them. Banks were once the cornerstones of rural communities. The local bank manager was respected in the town and the tellers knew each customer by name. This is the type of service that banks used to deliver to country communities and it is the type of service that country people deserve. I am particularly concerned about the impact of the closures on the elderly in country communities. For the elderly, a trip to the bank serves several purposes. It is a social outlet: an opportunity for them to chat with a teller whom they know well. Pensioners who choose to walk to the bank will get some exercise.
Elderly people might meet with friends at the bank and have further social conversations. In these ways the bank is very important to their existence. Further, the elderly do not like the notion of going into a post office, which is a very busy area, and doing their private and personal business across a counter within earshot of others. The organisational arrangements in banks precludes that happening. People can conduct their banking in privacy and not have their business spread across the community. That is a matter of significance to the elderly in our community. The time is long past for big financial institutions, such as the NAB, to take corporate and social responsibility. Mr Tony Beck, the National Secretary of the Finance Sector Union, has never uttered truer words when he said that these closures were about nothing more than greed. Mr Beck told ABC radio on 4 April:
Our concern clearly is going to be for our members' jobs and employment, but as importantly it will be the service and customer contact and access issues for customers in rural and regional Australia.
The union's concern is shared deeply by Country Labor and the people of my electorate. Mr Beck also pointed out that while country branches were being closed left, right and centre, top executives would not be taking a pay cut. He said:
The executives are being paid extremely well, and yet they are going to do more of the same in terms of cutting jobs and cutting services.
I cannot help but be reminded of that great Australian film The Bank, in which a bank was taken over and all the executives were shown the door. Perhaps it is about time that the highly paid executives at NAB got a taste of their own medicine. It is hardly surprising that they are not putting up their hands and claiming responsibility for their own mismanagement. Rather, they blame 56 country communities and on a whim decide that those branches should be closed. It is nothing short of a disgrace. A staggering 2,000 bank branches have been closed in the past 10 years. It has also been an era of staggering bank profits.
For the year to September 2001 NAB made a $2.08 billion profit. Obviously, this enormous profit is not enough to sustain the greed and egos of the directors of the National Australia Bank. I was heartened by radio reports this morning that the ANZ Bank is looking to buy the 56 country branches from the NAB. That is the type of corporate confidence and leadership country people are looking for from the banking sector. Unfortunately, the offer has been rejected. I strongly urge the NAB to reconsider the offer. I hope that the NAB directors will heed the needs of our country communities and reconsider the ANZ offer. The NAB is trading off people for profit—it is as simple as that.
Mr SLACK-SMITH (Barwon) [4.02 p.m.]: In support of this motion I express my extreme disappointment at the decision of the National Australia Bank [NAB] to close its branches in small towns throughout regional New South Wales. With the closure of these 56 branches, 2,500 people in small communities throughout Australia will lose their jobs. In New South Wales 14 branches will be closed. Why was this decision made? Obviously, the loss of $3.6 billion through poor investments overseas has forced the National Australia Bank to try to recoup some of that money by picking on people in regional New South Wales. The poor investments in its United States of America subsidiary HomeSide Lending, with a loss of $3.6 billion, has instigated the decision by the National Australia Bank.
The proposed closures follow the loss of many essential and vital services which have been taken out of small towns by both the State Government and the private sector. It was not long ago that Westpac Bank did exactly the same thing as the National Australia Bank intends to do. I am very disappointed with this decision, as there was a guarantee in 1991 that no NAB branches would be closed in regional New South Wales. Government departments have been taken away from regional New South Wales. The Department of Agriculture cut 450 jobs and the Department of Land and Water Conservation also cut jobs. The Castlereagh local area command in my electorate has already been reduced by 11 police officers. That means 11 families leaving the towns. Teachers, police, nurses and tradespeople have helped the economy in these small, vulnerable towns and created spin-off trade. These types of people have been a vital part of many of our small communities. If they leave, other people will leave as well. I am very critical of the National Australia Bank taking this very short-sighted step.
The National Australia Bank has decided that it will allow Australia Post to take over its business in many of these small communities. However, the withdrawal cash limit from such outlets is $1,000. That will not be sufficient and people in these small communities will be without a service at all. When this sort of thing happens, people who want to come to a town to start a business, to retire or to live will ask whether the town has any banking facilities. When the answer is no, they will go somewhere else. A lot of small communities are doing it tough. I endorse what the Federal Minister for Agriculture, Warren Truss, said last week: that commodity prices have improved and a recovery phase is on the way. He believes that the actions by the National Australia Bank have been very short-sighted. I join the Federal Minister's call to the NAB and other banks to carefully consider any further service withdrawals in country New South Wales.
John Shaw, a friend of mine, said that this is another nail in the coffin for the town of Boggabri. The town has just lost its chemist and the bank closure is a huge disappointment. He said that the town has been trying to keep its business sector and there had been no mention of this closure. The Boggabri bank branch operates three days per week and employs two staff members. That does not seem like very much, but the loss of two staff members from a small country town is equivalent to the loss of thousands of jobs in Sydney. Those people are vital to the economy of the town. Another friend of mine, Mayor Cheryl Randall from Manilla, said that the NAB sub-branch closure is another example of the service that has been taken from the town without any regard for the social and business impacts it will have on the community. Councillor Randall said, "Even when it has become a restricted service of 15 hours per week, the business customers remain very loyal. But now it means that another building in a town like Manilla, which is a beautiful little town, is now closed." The loss of another business will send the wrong message to people coming to Manilla.
Warialda economic development officer Sam Barwick described the news as another kick in the guts for the town. He said that the town has no alternative facility other than the Westpac agency or a limited service at the post office. When the NAB closes on 3 July Warialda residents will have to travel 70 kilometres to Inverell to go to a bank or credit union. These are just a few of the small country towns that are having this situation thrust upon them. It will be a very sad day for the 14 towns in New South Wales that will be affected. These small towns are on the point of recovery with better commodity prices. The National Australia Bank has been very short-sighted in taking this action.
The proposed closures are a knee-jerk reaction to poor overseas investments—United States HomeSide lending—which resulted in a loss of $3.6 billion. That is hard to accept. It is sad to note that not only government but also the private sector have been taking services away from small towns. A couple of years ago we chastised Westpac in this House for doing exactly the same thing as the NAB is doing. At that time the NAB said, "We are here for the long term, we are here for agribusiness, we are here because we back the farmers and the industries, and we support businesses in rural and regional New South Wales." But it has now decided to take the easy way out. Previous speakers have mentioned the profits made by the National Australia Bank. I have no problem with profits, because if you do not make a profit you will go broke. If a bank branch anywhere in New South Wales is not making a profit, of course it should close. I have no problem with that. But the National Australia Bank is continuing to make a profit, as Westpac did.
Many people in our small communities will change banks. It is remarkable that the ANZ Bank, which previously closed some of its branches, has offered to purchase the NAB branches that are earmarked for closure. I can only wonder about the sincerity of the ANZ Bank. People will no longer be loyal to lending institutions. Many people are now looking around for the best deal. The loyalty that banks have built up in their clients over the past 20 or 30 years is quickly disappearing. Banks have adopted a hard-nosed attitude and it has taken some time for country people to believe that their banks are no longer loyal to them. Therefore why should they be loyal to the banks? These closures are being driven by hard-nosed, economic gurus in head office who believe that closing bank branches will result in greater profit margins. I do not believe that. With the resurgence of agricultural prices, our dollar being in the right place and our performance overseas—we are going gangbusters—those in regional New South Wales are, for the first time in a long while, repaying loans. The closures are a retrograde step by the National Australia Bank.
Mr COLLIER (Miranda) [4.12 p.m.]: The National Australia Bank is clearly beset with problems. It has a management problem, a leadership problem and, more important, an attitude problem. The attitude of its leader, Mr Cicutto, and its management to the workers and to the ordinary people of rural and regional Australia is nothing short of contemptible. This bank made a profit of more than $2 billion last year, yet it proposes to shut 56 branches across Australia—14 in New South Wales—cut 2,050 jobs and tear the heart out of country towns. Australia's largest bank, and one of the world's top 100, is making millions of dollars in fees and charges, but it intends to force its loyal customers to use post offices, automated teller machines [ATMs] or branches in other country towns.
Why? The answer is profit. The bank's Chief Executive Officer, Mr Cicutto, whose salary package is around $2 million a year, has vowed to increase the bank's share prices. That is fine, but it should not be at the expense of thousands of direct and indirect jobs, rural families and country towns. It is no secret that the NAB has a management problem. It lost $3.6 billion as a result of a poor investment in the United States of America, the so-called HomeSide disaster. What does the bank do? It decides to claw that back and cut its costs by a wholesale shutting down of branches across Australia. Country towns and families are paying the price for NAB's poor management decisions and they are meeting the costs of its overseas failures. It is all part of Mr Cicutto's vision statement that he calls "positioning for growth".
This decision by the NAB shows no vision, no loyalty and absolutely no faith in the people of New South Wales country towns. In its usual hypocritical way the NAB claims that customer service will not be affected. In the past two years five bank branches in my electorate have closed, including two National Australia Bank branches. That claim is just plain rot. Ask the people and the shopkeepers of Kirrawee, who lost their only bank after 47 years, or the people of Jannali and Gymea who lost two branches each and then had St George become a clayton's bank, how it affected them! What about the people of Gunning, who, following today's announcement by the NAB, will for the first time in 127 years have no bank?
It is all very well for Mr Cicutto and the NAB to say, "Use your local ATM, use your local post office." But an ATM is not a bank, nor is a post office. You cannot discuss your mortgage with an ATM; you cannot leave your valuable documents at the post office. People, particularly the elderly, want full face-to-face, over-the-counter service from banks. Shopkeepers want the same. Mr Cicutto said on ABC radio that services will improve; this is a good news story. It certainly was not a good news story in my electorate, and it will not be a good news story for small businesses in country towns or for bank workers and their families. People shop where they bank. If they have to travel to a larger town or to the next suburb to bank, they will do their shopping in that town or suburb. That is what happened in Jannali, Kirrawee and Gymea. If bank branches are shut small business declines, country towns have fewer job prospects and the children move away.
Recent research from the University of New South Wales shows that contrary to the NAB claims, the number one service that those in small business need is their bank and their bank manager, whom they know and with whom they can communicate. Despite that, Mr Cicutto and his management team want to shut branches. They have absolutely no loyalty to the towns or the customers who have supported their shareholders and investors over the years. The ANZ Bank has offered to buy the NAB branches and offer a full range of services. But the dog-in-the-manger, disloyal NAB management says "No." Why? Presumably because the ANZ wants to take over the NAB customers. What is wrong with that? It is usual business practice: if you buy the business you buy the goodwill. Perhaps the NAB has no goodwill left.
The NAB is closing branches, kicking rural communities in the guts and sending locals to other towns, ATMs and post offices. Yet it continues to expect people to be loyal. What hypocrisy! If honourable members believe the bank has a management problem, they should think about this: it is closing branches as a result of a cost-cutting drive. The ANZ wants to buy the branches and offer a full range of services. The ANZ spokesperson, Paul Edwards, said that the ANZ sees an opportunity to expand but the NAB simply wants to close branches. It is time the NAB put "national" into National Australia. It must change its contemptuous attitude to ordinary, decent people, the ordinary men and women of country New South Wales and country Australia.
Ms HODGKINSON (Burrinjuck) [4.17 p.m.]: I support the intent of the motion, which calls on the NAB to take up this morning's offer by the ANZ to take over its 14 rural branches and expresses support for the workers who will lose their jobs. I note that studies have shown that closing rural bank branches may lead to a population decline in small towns. We must be ever wary and vigilant to show our discontent when these sorts of things occur. It is extremely disappointing—having regard to the negative publicity generated by Westpac, the ANZ and other banks that have closed branches in country areas—that the NAB has decided once again to get on the bandwagon. It is unbelievable that it has taken such action. I share the disgust and outrage of many members in this House at the actions of the NAB. If this decision was taken for the benefit of the shareholders, it is interesting to note that the NAB share price fell by 48¢ yesterday.
Much has been made of the fact that the NAB will close its branch in Gunning, which is in the electorate of Burrinjuck. Gunning is close to home; my grandfather had a local business there. The branch has been located in Gunning for something like 127 years and the locals and the business people are extremely upset about what is going on. We have been worried for some time that the NAB would close the branch, but when that shell hit, it hit hard. We are disgusted by the attitude of the NAB in closing that particular branch. With so few services left in the town, the closure will encourage local people to shop elsewhere. As a member of Parliament representing a country electorate I am continually advocating that the local dollar should be spent in the local community. It is becoming extremely difficult to keep selling that message when banks close their doors on local communities.
I believe that Warren Truss summed it up fairly well last weekend when he said that the NAB grew up on the sheep's back because country people supported their local banks. I spoke to the business community when the same thing happened with the ANZ, and I spoke at a forum in Boorowa when Westpac closed its doors there. The local community in Boorowa was also outraged by that decision. I said that we have supported these banks for many years and they repay our loyalty by shutting their doors. I believe these banks, which have been supported for so long by farmers, country people and businesses, have a community service obligation to put back into the community some of what they have taken out of it. When one remembers that it is difficult for people to move all of their accounts out of a branch where they have banked for many years, it is obvious that the loyalty factor has been left behind.
Alan Willoughby, a retiree aged 76, has been a customer of the Gunning branch of the NAB for more than 50 years. That is a sort of loyalty that people display to their local banks, particularly in country areas. We rely on them and when they turn their backs on us we are very upset. It is appalling and it is greedy. All of these things have been mentioned in the course of this debate. Honourable members have all read today's press reports and have been listening to the radio. There have not been any positive comments whatsoever about these closures since the announcement was made. It is disappointing for the 2,000 or so people living in the Gunning shire that their last-remaining fully functioning bank branch will disappear. I am sure it is equally disappointing for Baradine, Boggabri, Gulgong, Urunga, Warialda, Coolamon, Manilla, Brunswick, Bangalow, Culburra, Molong, Milton and Bomaderry, each of which will lose its National Australia Bank branch. I condemn this move. Taking services out of country areas, which have supported them for so many years, can be regarded only as an act of bastardry by the banks.
Mr HICKEY (Cessnock) [4.22 p.m.]: I support this urgent motion relating to bank branch closures. As my Country Labor colleague the honourable member for South Coast and the honorary member of Country Labor, the honourable member for Miranda, so clearly put it, this action is nothing more than an absolute disgrace. It was good to hear the honourable member for Barwon and the honourable member for Burrinjuck speak in support of the motion. I well understand the feelings of anger and disgust directed by members of the community towards these financial institutions, which believe they are head and shoulders above their customers. The National Australia Bank made a record $2 billion profit and then closes its doors on rural and regional communities across this great State. I am absolutely disgusted at its actions and the way it is forcing rural and regional communities of New South Wales to use EFTPOS machines and to bank at post offices and newsagencies. The bank has stated in the media that there will be no loss of services. It is extremely difficult for a customer to go into the local newsagent and negotiate a home loan or anything of that nature. The banks can say what they like, but there will be a loss of services.
I draw the attention of honourable members to a motion that was debated in this House last March. The motion, which was moved by the Minister for Regional Development and supported by a majority of members, called on this House to note that at the same time as the four major banks were making record profits they were continuing to close branches across the State and to increase fees and charges. The motion also called for the introduction of a minimum level of service for banking, particularly for pensioners and low-income earners. The motion also welcomed the Federal Opposition's policy of a legally binding social charter that included a six-monthly community consultation period on bank closures and an increase in banking services in regional areas.
We have not moved forward from that position. The Federal Government, which is in a position to make a difference so far as this issue is concerned, has not done anything. This motion has been well supported by my Country Labor colleagues and by other members on this side of the House. That begs the question as to where the National Party stands on this issue. Some members of the National Party have supported the motion, but where does the Leader of the National Party stand on this issue? He has not spoken to the motion, although he has lost at least half a dozen bank branches from his electorate. Still he says nothing.
Why have the Liberal and National parties ignored the cries for help from rural and regional communities that will continue to suffer the devastating effects of branch closures if we continue to allow these financial institutions to chart their own path of slashing and burning? The time has come to put a stop to the greed of the banking industry and to ensure that banking services are both affordable and available. The Federal Government must play a role. It holds the power to control banking policy and is in a position to impose conditions on the banking industry. The time has come for the National Party and the Liberal Party at a Federal level to stand up to these institutions to ensure that rural and regional New South Wales has access to appropriate banking facilities.
It is unfortunate that neither the Leader of the National Party nor the Leader of the Liberal Party is here to support this motion. Country Labor regards this as a very important issue and it is at the forefront of trying to address the problem and trying to put pressure on the Coalition at a Federal level. The principles must be adhered to and honourable members opposite should understand those principles. Too often we hear of the Coalition's prowess at supporting small business. I regret to inform honourable members opposite that, once again, they are failing their constituency by allowing their Federal colleagues to dance to the tune of the banks.
Mr W. D. SMITH (South Coast) [4.27 p.m.], in reply: I thank the Opposition for its bipartisan support of this motion. I believe that every member of this House would support it and that at a Federal level both the Government and the Opposition would condemn the recent actions of the National Australia Bank. I thank the honourable member for Miranda, the honourable member for Cessnock, the honourable member for Barwon and the honourable member for Burrinjuck for their contributions to the debate. I know that the honourable member for Miranda has certainly been down this path before with five bank closures in his electorate. Yesterday I visited the three communities in my electorate that will lose their banks: the communities of Bomaderry, Culburra and Milton. The degree of anger, frustration and continued disillusionment with the banks was well and truly evident yesterday both from those in small business and members of the general community alike.
I launched a petition calling on the NAB to immediately drop its plans to close bank branches, particularly in the Shoalhaven. As I asked business owners whether they were happy for me to put a petition on their counter they almost ripped it out of my hand: they were so frustrated by what the banks have done to communities across New South Wales. Customers overheard what I was saying and wanted to sign the petition before it was even placed on the counters. A common theme from the speakers in this debate has been loyalty. The NAB does not understand that to country people loyalty is a big issue. They have done business through local bank branches for many years and feel that they are part of the branches. It is a real slap in the face for them that the NAB has not reciprocated their loyalty. ANZ spokesman Paul Edwards said that ANZ regards the recent events as an opportunity to expand its branches in regional areas. He said:
We've had a moratorium on branch closures in rural areas for about three years now and we certainly see this as an opportunity to expand by those customers who are served by those branches.
The ANZ is not squeaky clean on this matter; it closed branches in the early 1990s. Perhaps it has seen the light. I call on the NAB to re-examine the offer put to it this morning. The South Coast Register, my local newspaper, referred in its edition of yesterday, Monday 8 April, to the remarks of Steen Pedersen, President of the Bomaderry-Nowra Chamber of Commerce. He said:
There are about 100-150 small businesses in Bomaderry. Many of them use the National Bank.
When the Commonwealth Bank closed in Bomaderry a lot of these businesses looked at getting a community bank established here, but the NAB said it was going to stay so we pushed to keep businesses using the local branch.
So a guarantee was given to the Bomaderry Chamber of Commerce president that the branch would be kept open and there would be no need for the establishment of a community bank because the NAB would be there for them. But look what happened yesterday. Mr Pedersen said:
Businesses changed accounts to the NAB because they said if we supported them they would support us.
But now the NAB is closing, where do all those businesses go?
This highlights how little NAB understands about banking in rural and regional New South Wales. Mr Pedersen went on to say:
We now have to go into Nowra, but where will the extra parking spaces come from, and who is going to serve all the extra customers in the bank?
It takes nearly an hour for us to go to Nowra to bank after we try to find a parking space, join the long queues in the already small banks.
If Nowra is going to have to accommodate all these extra businesses and people, who is going to fund the extra car parking spaces and other needs?
Mr Pedersen said that the Bomaderry Chamber of Commerce received a letter from NAB chief executive Mike Pratt last year stating that the bank would not close its regional or rural branches and it was only looking at consolidating its metropolitan businesses. What the NAB has done to rural and regional communities across New South Wales in the last 24 hours is a disgrace. [Time expired.]
Motion agreed to.