A slow news day in a pandemic is a great time to trot out the old “wouldn’t it be a good idea to start a government-owned bank” story.
What a fabulous concept. No wonder Labor’s shadow treasurer Jim Chalmers jumped at the chance to support the union-backed report from the Per Capita think tank.
But wait. Wasn’t it Labor which sold the last government-owned bank?
A quick check will confirm that it was the indeed the great Paul Keating who privatised the Commonwealth Bank of Australia (CBA) in three tranches from 1991 to 1996.
And every year since we’ve had stories calling for the creation of a new “people’s bank”. That is, except during the banking royal commission when the litany of scandals led to said stories appearing every week.
Almost as regular is the concept of using Australia Post as the conduit for the new entity. Thankfully Australia Post hasn’t been sold off yet, so we can still float this one.
Right on cue the Per Capita report trotted it out again in the report commissioned by the Communications, Electrical and Plumbing Union, leading to The Sun-Herald headline “Postbank idea gets ALP stamp of approval”.
Now Chalmers is obviously keen for media oxygen these days, but he should note the rash of similar stories floated over the past decade.
Here is just a small sampling of similar ideas floated in recent years.
In 2009, when former NAB banker Ahmed Fahour took the helm of Australia Post there was a great deal of excitement that he would expand into financial services. The belief that he would be the saviour of the sector, helping everyone from rural communities to small business from the scourge of the Big Four, continued for most of his expensive and underwhelming reign.
In 2015, Australia Post did start a partnership with Westpac to provide banking services and this was then expanded to include the rest of the banks for the next couple of years.
In 2018 ANZ refused to stump up the fees Australia Post was charging for the service but the old government bank CBA certainly saw the PR advantage in paying $22 million annually over five years to help keep Australia Post providing banking services.
It was the midst of the great banking scandals so it was a good look to help underwrite the estimated 376 million consumer financial transactions at post offices each year.
In the last 2019 profit result it was reported the initiative had signed on 70 financial institutions. Yet still Australia Post reported a 70% slump in profit to $40.6 million despite record revenue of $7 billion.
While the banks have flourished financially, poor old Australia Post is always looking for that panacea to solve its inevitable decline. Even the Per Capita report admitted the government would need to provide even further funds for PostBank.
And before Chalmers gets too excited about the bank idea, he might want to see what happens with Qantas.
Yes Jim, we once had a government-owned airline as well — which was also privatised by that nice Mr Keating.
Not sure I see your point here JP. You seem to be saying that having a publicly owned bank is a bad idea because its an idea that has been suggested before. Should we abandon seeking better treatments for Cancer? People have beating that horse for a very long time, must be a bad idea
Maybe you could try an article that actually gives a reason, just one, why having a publicly owned bank is a bad idea in the specific conditions of 2020?
Yes, Keating was responsible, to his shame. He was an autodidact, and neoliberalism was the policy being pushed by many influential economists at the time. The big four banks have all been self serving and rather than serve the real economy they have been parasitic on it. They should be drastically regulated or face nationalisation. I don’t see why past mistakes should not be corrected.
I don’t think anyone, ever, referred to Paul Keating as “nice”!
“……..poor old Australia Post is always looking for that panacea to solve its inevitable decline.”
I don’t know about that ! Our small town rural Post Office has never been so busy with parcels and online shopping generally……..it’s booming !
And yes, a peoples bank would be a wonderful idea after the last of the big four (NAB) pulled out in January.
I’m all for labor returning to their more socialist roots, that would be ‘nice’. I don’t care if it’s a backflip, U-turn or whatever. I don’t see anything wrong with them being able to say that have made mistakes in the past and it’s time to fix them. Probably would garner them support and make them stand for something, instead of the current less then nothing.
Unfortunately, I can see no visionary anywhere in our politics. Sad day for us.