The three factors I will briefly describe are:

Indigenous Australians are both relatively and absolutely socio-economically disadvantaged when compared to other Australians (Council for Aboriginal Reconciliation 2000). In practical terms, this means that most low-income Indigenous households are without financial savings and often pay more than other households for financial services. These charges include for example cheque-cashing fees, bank account keeping fees and ‘book down’ interest charged by stores (Westbury 1999, 2000).

Families that do not maintain financial savings often have poor or non-existent credit ratings or debt to income ratios that exclude them from mainstream forms of credit. Such households have no financial margin for safety; even temporary disruptions in family earnings or unforeseen expenditures can create serious hardship.

The demographic spread and location of Indigenous Australians compared to the wider community also affects their access to banking services. The Indigenous share of total usual resident population is shown in Table 10.1for each census since 1981 in respect of an area which includes the Far West and North Western Statistical Divisions (SDs) in New South Wales; the South West, Central West, North West and Far North SDs in Queensland; the Eyre and Northern SDs in South Australia; the South Eastern, Central, Pilbara and Kimberley SDs in Western Australia; and Northern Territory Balance SD.^[8] This roughly corresponds to the area popularly termed ‘the outback’.

Table 10.1 demonstrates that the Indigenous share of the total outback population has grown from 13 per cent in 1981 to 18 per cent in 1996. This represents an overall growth over the period of some 23 per cent (Taylor 2000). Preliminary projections indicate that the Indigenous share of the outback population should rise from 18 to 20 per cent by the 2001 Census (Taylor 2000; and see Taylor & Hunter, Ch. 11, this volume).

This growth is occurring due both to a net reduction in the non-Indigenous population, and to higher population growth amongst Indigenous families. At a time when reference to meeting the needs of people living in regional Australia has become a constant political catchphrase it should not be overlooked that a significant and growing proportion of that population is, in fact, Indigenous.

The third related factor that is impacting on Indigenous people’s access to banking and financial services in Australia is the deregulation of the banking and financial services sector. One of the major impacts of deregulation is the rapid adoption of new technology occurring concurrently with major increases in consumer banking fees (Takac 1997; Westbury 2000). For example, in 1991 the major banks charged zero for account keeping fees. As at October 2000 this fee had risen to $6.00 per month (Westbury 2000). Similarly, over-the-counter withdrawals have risen from $0.50 to $2.50 per withdrawal (Westbury 2000). The continuing hike in bank fees acts as a strong disincentive for poor people to maintain a bank savings account (Stegman 1999).

Arguably the most important impact of deregulation has been the withdrawal and closure of branch and agency services in rural and remote areas (Ralston & Beal 1997a, 1997b). At a time when some of the major banks are foreshadowing hundreds more branch closures, they have also been announcing successive record profits. In the two years up to December 1999, the Reserve Bank Bulletin reported 763 branch closures Australia-wide, with 311 of these occurring in rural and remote regions. In regional New South Wales alone, over the same two-year period branches have been closing at a rate of five per month (Westbury 2000).

What we are looking at is a massive and continued withdrawal of banking and financial services in rural and remote areas. These changes have hit hard in regional Australia and have hit Aboriginal communities even harder (Commonwealth of Australia 1999). Not only have many Aboriginal communities lost agency or branch services, but also, in other locations, the historical legacy of a lack of any appropriate banking services looks set to continue (Westbury 1999).