Senator CHAPMAN (4:30 PM) —It is all very well for Senator Conroy to come in here and lambaste the banks for closing branches, for their increase in fees, for their increase in interest rates and for what he regards as their excessive profits. Maybe there are, Senator Conroy, some questions for the banks to answer in relation to some of these issues. But certainly Senator Conroy shows the height of hypocrisy when he comes in here and in his MPI criticises the Howard government and alleges that it:

Senator Conroy talked about the government taking responsibility for banks. He talked about making the banks provide services. Let us have a look. Senator Conroy has got a short memory, or perhaps he was too young to remember what happened when Labor governments did have responsibility for banks. Need I remind Senator Conroy about the State Bank of South Australia under Labor administration, and how its mismanagement of the State Bank is still costing South Australians dearly as a result of the $3 billion that that bank lost under its adventures under a Labor administration, or in Victoria the misadventures of the Tricontinental merchant bank in the late 1980s, with losses of more than $1 billion? So let us hear none of this nonsense in terms of criticising the Liberal government about its approach to banking.

The fact is, apart from those banking disasters that I have just mentioned, the Credit Union Services Corporation Ltd, when it conducted research back in 1995, found that there were 600 rural towns in Australia with between 200 and 5,000 inhabitants which did not have a financial institution within 40 kilometres. This was towards the end of Labor's 13 years in office. They had had 13 years in office and did nothing about this decline in banking services. Yet today they have the hypocrisy to march in here and criticise the Howard government for allegedly doing nothing about banking services. They did not, in office, propose that any form of community service obligation apply to the banks, although they could have done so in government. So Labor has an appalling record with regard to this issue.

In contrast, since this government has been in office, it has taken initiatives to turn around the situation with regard to the provision of banking facilities, particularly in rural communities. There is a number of innovations for which this government can take great credit. The most important of those, of course, is the establishment of rural transaction centres, an initiative of this government to ensure that rural and regional communities have access to financial services. This program recognises the importance of face-to-face services being available to people with regard to financial services. The program will support the establishment of up to 500 rural transaction centres in towns with populations of less than 3,000 people.

The rural transaction centres will provide access to services such as personal banking, business banking aspects and automatic teller machines, as well as post, phone, fax and other communications systems. So there is a marked contrast between this government and the previous Labor government with regard to providing banking services in rural towns. Already—in contrast to what Senator Conroy said—although this program has only been in operation a short time, there are six rural transaction centres operating in Australia: three in New South Wales, at Eugowra, Urana and Gresford; at Aramac in Queensland; at St Mary's in Tasmania; and at Welshpool in Victoria. So there is a positive initiative taken by this government with regard to ensuring that services in the bush improve.

Another important initiative has been taken by rural communities themselves. The government's banking legislation, the increased competition model that this government has introduced, has allowed institutions like the Bendigo Bank to be established by local communities. Under the old banking regulations of the Labor era such an initiative would not have been possible. Initiatives like the Bendigo Bank involve community banking, with the community providing the start-up capital for the branch of an existing bank and with local investors owning and managing that branch. The community takes responsibility for managing the staffing levels and the day-to-day running of the bank as well as the risks of the branch but does obtain technical assistance from the parent bank.

We know well the success of the Bendigo Bank with regard to providing this form of service. Already there are 19 community banks set up under the Bendigo Bank label under this model, which has, as I said, as a result of this present federal government's policy been allowed to develop. The viability of a community bank is obviously dependent on what businesses are operating in its local area. But it should be noted that communities as small as 1,100 people have been able to support a branch of the Bendigo Bank split between two rural towns in the Wimmera district of Victoria. The other important aspect of a community bank such as the Bendigo Bank is that the revenue raised is split between the community bank and the parent Bendigo Bank. So there is money going back into the local community from this initiative, as well as the benefit of the banking service that is provided.

So there are two specific initiatives that have resulted directly from the policies of the present federal government. That simply reinforces the fact that the Howard Liberal-National party government is committed to ensuring that all Australians have access to the best possible banking services. It has allowed that by the introduction of greater competition into the banking system.

In addition to that, of course, there is the development of initiatives on electronic banking. The provision of electronic banking facilities will overcome some of the difficulties created by the absence of face-to-face banking. But I say to the banks in this context that, if they want people to engage more in electronic banking, they must provide education and information to their clients so that they fully understand the way in which electronic banking is organised and how it operates. They can then fully participate in that activity and, again, gain the benefits that electronic banking can provide to customers. Another initiative of this government is to allow credit unions to issue cheques. That follows on from the government's policy of allowing a wider range of players into the financial sector, including superannuation companies being allowed to provide traditional banking products—again, heightening further competition. As part of its initiative with the credit union movement, the government has initiated Credit Care to help residents in rural and remote communities that do not have current banking support or that have lost it to regain convenient access to basic financial services. As a result of this initiative, 39 towns across Australia have received access to financial services. That will continue to increase in the future. We have also initiated a public inquiry on financial institutions and public administration through the House of Representatives standing committee. That inquiry has also examined further alternative means of providing adequate banking services in regional and remote Australia. The recommendations of that committee are currently under consideration by the government.

I mentioned earlier the growth of electronic banking services. An important aspect of that is the provision of automatic teller machine services. Again, if the banks want people to engage in this form of banking more widely—both to the advantage of the bank and to the advantage of the customer—it is important that they meet standards. A couple of weeks ago I called on the banks to ensure that suitable arrangements were put in place to give customers full fee information at automatic teller machines at the time transactions are undertaken. This was included in a draft code of electronic banking practice formulated by the Australian Securities and Investment Commission in discussion with the banks, but it has been omitted from the final draft code. My call a couple of weeks ago for that particular part of the code to be restored and made part of the code agreed between the banks and ASIC certainly met with widespread positive reaction and support from the community in terms of people phoning my office, people writing letters to the editor and talkback radio discussions. So it is clear that the issue of banking services is important to the community. There are initiatives that the banks can undertake to ensure that those services are maintained and improved. But the fact is that the initiatives this government has taken in terms of rural transaction centres, banking reforms to allow organisations like the Bendigo Bank to develop its services and credit unions have certainly provided opportunities for a better establishment of services, particularly with regard to rural and remote communities. (Time expired)