Postcode discrimination, bank branch closures and an ever-reducing appetite to lend to the bush are symptoms of market failure in the regional banking sector, Katter’s Australian Party Leader and Traeger MP Robbie Katter has said.

Speaking following the news that Charleville and Longreach, in Queensland’s south and mid-west, would lose their local Suncorp Bank branches in the coming months, Mr Katter said there was a growing onus on governments to intervene in the untenable situation that was stifling industry and population growth in almost every region removed from the coast.

“For many years not only have the banks been departing from their bricks and mortar, but also their obligation to provide loans in rural towns,” he said.

“It is now well acknowledged that postcode discrimination exists from all major lenders and trying to get a loan in Charleville is dramatically more prohibitive than Townsville or Brisbane – these decisions are driven by postcode and are often no reflection on the suitability for an applicant’s security for a loan.

“Towns cannot move forward if people wanting to buy houses can’t get loans on reasonable terms nor can they attract people to buy businesses for the same reason.

“The main banks will keep saying that they still do business in the town but if you scratch below the surface, the reality is very different.”

Mr Katter said loan applicants in rural and regional areas faced more stringent lending criteria that was callous and unworkable.

“In rural areas it is not uncommon for loan to value ratios (LVRs) to move from 10 to 50 per cent for a house, meaning instead of a 10 per cent deposit you need 50 per cent upfront or you are out of the ball game,” he said.

“Anyone paying any attention to these struggles on the ground must realise this is a problem and one that demonstrates market failure in the commercial industry.

“Where there is market failure, the government is obligated to act; and acting is not an holding an ‘inquiry’ or offering platitudes of care and concern that mean nothing to the people whose lives are affected by this.”

Mr Katter said the answer to these issues, and to questions pertaining to rural development more broadly, was a government-owned or backed bank.

“To make initiating this process simpler, you could consider a model that has some of the necessary infrastructure already in place,” he said.

“For example, Australia Post was considering a model of this nature which would be the perfect vertical alignment for their operations.

“Bank lenders could operate out of Australian Post offices, similar to how it’s done in New Zealand through the NZ Post and its Kiwi Bank.

“The beauty of this solution is that is more likely to make money for the tax-payer than burden them, ultimately this model could be highly beneficial to the government’s bottom line.

“The last time the government (in this case, the State) owned a bank in Queensland it was sold, ironically, to Metway for around $1.5 billion – this is strong evidence of the opportunity here for the tax-payer.

“So, without waiting for an inquiry, why don’t we express our views publicly in regards to the direction we should move towards instead of waiting for a report that may never deliver anything?

“The western areas of Queensland desperately need to address this market failure – the closing down of the bricks and mortar branches is just the symptom of a much larger problem that is very much replicated across the entire country.”

Mr Katter said it was disappointing to hear that in the wake of the bank closures in the south and mid-west, the Member for Warrego had referred only to the work of the Federal Government’s Regional Banking Taskforce rather than assert a clear direction forward.