O’Sullivan says rural loan changes needed

Banks should reopen branches as a gesture of social conscience, Senator Barry O'Sullivan says


Politics
Senator Barry O'Sullivan, right, pictured with the Member for Gregory, Lachlan Millar, at the Winton races last Saturday, said his objective in pushing for a banking royal commission was to expose "cultural difficulties" so the corporations themselves could restructure. He said everybody knew there were problems in the banking culture.

Senator Barry O'Sullivan, right, pictured with the Member for Gregory, Lachlan Millar, at the Winton races last Saturday, said his objective in pushing for a banking royal commission was to expose "cultural difficulties" so the corporations themselves could restructure. He said everybody knew there were problems in the banking culture.

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Senator Barry O’Sullivan has called on the big banks to reopen branches in regional areas and to restructure lending policies.

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As his government colleagues hastily retract their opposition to a banking royal commission in the wake of revelations of deception, greed and possible fraud, Senator Barry O’Sullivan has called on the big lenders to reopen branches in regional areas and to restructure lending policies.

Mr O’Sullivan was one of the main agitators pushing his government to instigate the commission, announced in late November last year.

He said at the time he had been working on matters around debt and banking for over two-and-a-half years that included “very significant policy adjustments to drought funding that include the banks”.

On the weekend he said that in order for banks to restore their social licence and credibility as they re-engaged with people in the bush, they needed to provide products and relationships that were conducive to increasing productivity.

These would need to take into account the fluctuating income streams experienced in rural enterprises subject to weather extremes.

“One of the things I’ll be urging the banks to do as they restructure culturally, is to look at their relationship with rural and regional Australia, in terms of lending,” he said. “We know over a long period of time now, over decades, there's been any number of anecdotal stories on how difficult it’s been for people in the bush.”

There were a number of ways he thought they could offer loan products that were more sympathetic to rural needs, such as longer, more flexible arrangements for people in the bush.

“We have long periods now where we have inclement weather – we have droughts, we have floods – and they need to have a finance package that responds for them, taking into account their cash flows.

“When we have a weather impact, it can be between three and seven years before they restore cash flow on farms.”

Mr O’Sullivan said the value of rural properties would always come back, “no question”, and banks should always be flexible enough to have products to accommodate that.

He said there was also no question that branches in regional areas should be reopened. Closures in regional towns have been the subject of increasing news reports in recent months.

The ANZ bank alone has either closed or is planning to close branches at Stanthorpe, Gladstone Central (Kin Kora), Highfields, Ingham, Moura, Oakey, and Chinchilla in 2018, while the community of Blackall was shocked to learn in March that the Commonwealth Bank was planning to close its branch in June.

In all circumstances, online banking and a decline in in-house transactions have been cited as the reasons for the closures.

Mr O’Sullivan said personal banking allowed people in the bush to sit and negotiate their circumstances.

“You’ve got decision makers who are living in those communities who understand the challenges that are faced by that particular client at that time,” he said.

“I’ve been more surprised than what I thought I would be (at the banking revelations) – the depth and systemic nature of what could otherwise be described as corruption has shocked everybody.”

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