A group of influential economists is calling on the government to set up a “bank of the people”, so the public can deposit money with Australia Post and have it managed by the Future Fund.
Is establishing a basic bank a brilliant way of breaking up the Big Four monopoly, or is it just bs?
An open letter to the Prime Minister and Treasurer is signed by economists who have advised both sides of politics, including Christopher Joye, chairman of John Howard’s 2003 Home Ownership Task Force, and Nicholas Gruen, chairman of the Government 2.0 Task Force for the Finance Minister.
The economists raise concerns at how the banks are using their privileged access to government guarantees, saying they are “rushing offshore” to expand.
Since the financial crisis began, the Big Four have increased their share of the mortgage market from 80 to 92 per cent and have taken over second-tier banks including St George and BankWest.
The so-called people’s bank would be similar to New Zealand’s successful Kiwibank, which was itself set up to break the dominance of the Australian-owned majors.
Do we really need such an institution in Australia? Does the government really need to intervene so dramatically in the banking sector? Let us know below.