I probably shouldn’t pick on Peter Van Onselen, because I don’t think that he’s yet jumped on the Greens=Communist bandwagon kickstarted by that redoubtable Drum contributor The Honourable Kevin Andrews MP (unlike Greg Sheridan today). But he does have a (short) list of all the dastardly radical things The Greens stand for:
Then there are the purely ideological reasons why Liberals should refuse to preference the Greens. Conservatives like to highlight the radical agenda the Greens pursue: death taxes, decriminalising drugs and the latest being no fees for ATMs.
[My emphasis]
Think about that for a second. It’s literally insane.
One of the reasons for the Labor government’s move, in the last term, to ensure that ATMs highlighted the fact that a fee was being charged was surely to use transparency to pressure banks to abolish or reduce said fees. I don’t know that was judged as part of a Trotskyite Maximalist program, or whatever.
Meanwhile, bank shills today are out and about in the Fin claiming that abolishing ATM fees might lead to a dearth of said cash dispensers in country areas – an “unintended consequence of policy” which would actually, were it to occur, be fully intended by the banks. But all it really is a big hint to Messrs Windsor, Katter and Oakeshott.
All this from corporates which have been touting their social responsibility, no doubt to avoid any legislated universal service obligation (as mandated on the privatised Telstra by all those Red Revolutionaries in the Howard Government).
In today’s Business Spectator, we have a patronising little article warning Adam Bandt to stick to same sex marriage and avoid the untouchable field of economic regulation, which, intriguingly, cites Commonwealth Bank CEO (he of the $16 million salary package) Ralph Norris kicking the Commie can as well:
CBA’s Ralph Norris said the former policy was the “sort of stuff we’ve seen in eastern countries prior to the fall of the Iron Curtain, when people’s property rights were abrogated”…
How bizarre that any attempt to trespass slightly outside the limits of pro-business policy (reinforced again and again by the media) attracts accusations of Marxist intent.
Just nuts.
Incidentally, I’m more and more coming to think that the Liberal Party’s decision to preference Labor in Victoria over The Greens is directly linked to this ideological mobilisation. They want to preserve and reserve their own right to be mildly populist (Joe Hockey’s calls for ACCC powers to monitor whether there is any collusion in the banks’ interest rate movements) but leave the prevailing pro-big business political sentiment protected at any cost. Deeply interesting.
Of course we can’t abolish those $2 fes for using a foreign ATM how is Ralph going to get his $16 million salary or Gail her $50 million. the technology to route the transaction back to the bank is used by all ATMs so the the fee is money for jam.
Why would you trust a bank CEO to manage your money if he can’t survive on a salary of $500,000?
Government legislating to ban private companies from charging for a service they provide – sounds like a pretty radical agenda to me. There are areas where such intrusion can be justified (like prudential limits, retrictions on insurance ompanies refusing to insure the sick etc) but the economic case needs to be properly made. There needs to be a clear market failure.
There may be a case for reducing the charge to zero, but I have never heard it, apart from a general lament that the banks are too profitable. Ralph Norris’s absurd salary is really beside the point. It makes me sick as well, but let’s just get over it. The issue remains: why would banks bother providing ATM’s if they can’t make a profit on them?
I know it was a while since East Germany, Ceaucescu’s Romania, etc etc, but have these hysterical idiots, and the public, actually forgotten what real communism in those countries looked like? In twenty odd years? Imagine the reaction to anyone making these kind of fatuous comparisons in the eighties, they would be laughed off the page.
Hey Student T @ 2 – go do your gap year in the UK, where they run a more complex ATM regime without these fees.
BTW, you might like to check out the concept of the “loss leader” while you’re at it…
Isn’t this the sort of thing Uncle Joe wanted?
Er, Joe Hockey that is, not the Man of Steel.
Maybe as an aside, but just reading a few threads here over the past few days it seems to me that some of the people here who I would have categorized [not a good thing to do admittedly but take it with a grain of salt] a few years ago, or less, as Labor types seem to have moved into the Greens camp.
It might be just a perception of mine but I reckon several of our commentators, and a couple of our posters, are more sympathetic to the Greens now than they were saying some time [I'll leave that imprecise] ago.
Disillusion with the ALP?
Greens as the party of last resort?
Faulty perception of mine, which I’m alone in?
You’re overlooking the fact that Lenin, in his 1917 pamphlet, The State and Revolution proclaimed that abolition of ATM fees was merely the opening shot in the campaign to topple the capitalist class on a world scale. He once declared that abolition of ATM fees plus electrification equalled socialism. In 1920 he said that on the abolition of ATM fees a dirge would be sung over the world’s ruling classes. For him, this was the big one.
What’s odd is how conversant Norris is on the Marxist classics. That has to be a bit sus, IMO.
@ Ralph Norris or that fat cat from ANZ. I mean, where do they find these people?!
Reminds me of Carlos Slim, ‘the national broadband is too expensive.’ The media presents this as analysis from a real as in game playing expert. Oh well, I guess these people are impartial.
(Get rid of your tv if you still have one. I can’t believe people are upgrading to 3D, so that the likes of Tracy Grimshaw can lean into their living rooms.)
@ Kim – deeply interesting use of understatement
Thanks, Joe!
What about all those ATM machines not owned by banks? Those that are owned privately and are paid for by the ATM fees?
What about them, Chris?
Whatever happened to the local Councils charging the banks for use of their footpaths?
And have they caught those guys that blow up the ATMS for the cash yet?
And why should a fee for ATM transaction be rounded off to 50c, rather then jut $0.07232 per transaction?
And of course ATM and other bank fees are relevant to Gail or Ralph’s salary – cause that is where they are making their money = profit = share value = CEO bonus.
Fran, if that bloke you’re talking’ bout in the lenin’ industry, maybe he worked for a bank!
From the Greens’ website, for Chris’ attention:
“We are not advocating the fee ban for credit unions and building societies, which are generally member owned and not-for-profit, or for independent ATM operators, such as corner shops and clubs.”
So… if Bandt’s scheme is Communism, do Bank CEOs who charge excessive ATM fees get chucked into psych wards?
I could live with that.
FDB – well won’t the banks just sell off their ATM networks then? No point owning them if they can’t make any money out of them, or even pay for themselves, if they can get a bunch of money selling them off to someone who can…
Fran, good point. And I recall Edmund Burke pointing out that the retention of ATM fees was the only thing that protected Britain against the Jacobin excesses of the French revolution.
But Norris strikes me as one incoherent dude. Prior to the fall of the Iron Curtain? What does that mean? Curtains don’t fall, they are drawn. Even to give a sympathetic reaction to his ramblings, the “fall” (ie. drawing) of the iron curtain would indicate the imposition of socialist regulation, not its alleviation. Is he thinking about a wall that fell? Then why doesn’t he say so in plain language?
And just to add to my previous comment. Instead of having a westpac, a commonwealth bank, an anz and an nab ATM at shopping centre where you can choose your own bank’s fee free ATM, we’ll end up with one ATM owned and operated by westfield that does charge no matter which bank you’re with.
Oh I don’t know, so they can close country and city branches, sack staff in remaining branches and force people onto electronic banking whether they like it or not and cut services?
Anthony @17
You are clearly not a theatre-goer.
Chris – in such an environment (assuming no cartel-like behaviour), ATM operators would be in competition with each other, and the fee for ATM transactions would begin to reflect the cost of ATM transactions plus a modest profit margin. Rather than what we have, which is ‘free’ transactions at one’s own bank’s ATMs (paid for via fees and charges on a non-pro-rata basis through the back door) and ridiculously overcharged inter-bank or independent-ATM fees.
WIN!
I don’t want something for nothing – I just want to pay a reasonable price for services rendered.
GregM – what happens when a theatre curtain falls?
Does it unite the stage and the audience, or separate them?
The analogy is completely arse-backwards.
Unless the whole proscenium falls, of course.
If you’re going to be pedantic, you might as well go the whole hog.
GregM, fair point about theatre. But my observation stands: the “fall” of the iron curtain in this sense would indicate the imposition of socialist regulation, not its alleviation.
FDB, you think I am being pedantic? You don’t know the meaning of the word. My point to Anthony was a defence of the glory of the English language as a wonderful repository of metaphor ananalogy and allusion against his sad pedantry about curtain closure.
First some curtains, such as those in theatres, descend rather than being drawn horizonally. We refer to this as the curtain falling. Pointing this out is not pedantry, it is a rebuttal of pedantry.
Secondly the term “the fall of the Iron Curtain” is an allusion, an acceptable usage in the English language which is way too flexible and open to imaginative use than to be constrained by narrow technical points about whether curtains are drawn or fall. In theatres the convention is that the curtain falls, even if this occurs through some human intervention in bringing it down and hence “drawing” it.
Thirdly, as to the meaning of the “fall of the Iron Curtain”, this follows the theatrical usage in which the fall of the curtain signals the end of an act in a play or the end of the play or performance. So the fall of the Iron Curtain means the end of the play that was communism in Eastern Europe.
What does it mean, you ask? It means that the show, communism in eastern Europe, a tragedy played out over 45 years, is over, the lights come up (another theatrical term as, pedantically of course, they do not in fact come up but are brightened slowly through human intervention so as not to cause the audience discomfort in adjusting to the change from a darkened to a lit theatre) and the audience applaud, cheer or boo as is their wont, or just shuffle out of the theatre and get on with their lives.
FDB @ 21 – well I wonder what a reasonable fee for recovery of capital cost for an ATM, maintenance, security, insurance in case of theft plus a profit margin would be? It would depend on the number of transactions, so perhaps we’ll also have varying fees depending on how busy a location is as well as how many competing ATMs there are around.
One random observation – there seem to be plenty of people who’d rather pay $2 extra per withdrawl than walk 5-10mins to their own bank’s ATM.
And besides, who uses cash these days anyway
Have a guess how much the banks’ profits have increased since they no longer have to staff those pesky branches in various rural shitholes.
Hannah’s dad@7: Possum had this to say about the rise in the Green vote:
(See the graph here) It is almost as though the Rudd revolution gave people “permission” to become openly Green supporters.
We will see how the Greens use their new found power in the Federal parliament and Tasmania. It will be much harder to paint the Greens as raving loonies if they continue to use their power carefully.
Combine all the above with Julie’s commitment to stay as close to the Abbott position as she can and you shouldn’t be surprised by the swinging commentators.
Gregm@24: “First some curtains, such as those in theatres, descend rather than being drawn horizonally. We refer to this as the curtain falling. Pointing this out is not pedantry, it is a rebuttal of pedantry.”
Churchill, I believe, spoke of the iron curtain that descended across Europe, but most theatres have curtains that move horizontally, which I think you’ll find is the genesis of the term “fellow travellers”.
d
““Adam Bandt was what we call a Trot,” says ACTU assistant secretary Tim Lyons, a Labor stalwart who beat Bandt in a 1993 contest for NUS education officer. “I don’t remember him having much of a green tinge. To be honest, what I recall of him is a young man so incredibly earnest about Marxist intellectual politics that he sounded more like a party theoretician than someone running for office.””
http://www.theaustralian.com.au/news/features/greener-pastures/story-e6frg8h6-1225949393711
I think if you regress the Greens vote against ATM fees there is a clear correlation.
They aren’t doing themselves any favours by legislating ATM fees – it will cause a collapse in their vote.
“Thirdly, as to the meaning of the “fall of the Iron Curtain”, this follows the theatrical usage”
You know that ‘iron curtain’ itself was a theatre term, GregM? ie. it was already an allusion to theatre.
Anthony is quite correct @ 23, and the “fall of the Iron Curtain” was *exactly* how it was described in a million or so newspaper articles from the late 40s, early 50s.
It’s just ignorance to use it (or argue) otherwise.
The “fall of the Iron Curtain” meant the imposition of communism. In keeping with the metaphor, the ending of communism should have been depicted as the “raising of the Iron Curtain.”
I’m putting in early dibs on an entry for next week’s “Spotlight the Spin”.
Has anyone else noticed how this month-long focus on bank-bashing by the Opposition, Government and media has taken mining super profits and a carbon price off the public agenda?
They really can’t breathe and scratch their arses at the same time, can they?
Why not add it to this week’s? It’s still an active thread.
Darryl @ 28: Churchill’s original 1946 quote was: “From Stettin in the Baltic to Trieste in the Adriatic an “iron curtain” has descended across the Continent.”
silkworm @ 31: Absolutely. You beat me to it. Somewhere down the track, the significance of ‘up’ and ‘down’ have reversed, because the image associated with the phrase seems to have morphed from a theatrical curtain to an upraised barrier: perhaps a revival of the mediaeval curtain wall?
Semantic inversion bears similarities to the overall ‘green = red’ theme of this thread.
I think ATM fees are a rip-off therefore I am morally equivalent to Stalin. Wow, it’s easy to become a monster these days – must be the End Times.
I love the whole vibe of this debate: its important to be doing something, Swan isn’t doing enough! They’re laughing at him! All he does is issue stern warnings! Whereas Ive got a nine point plan.!!!
Omne: Legislation, MR Bandt? But that’s…..TEH Communism!!!
Tell ya what: allow we individuals her in Australia to borrow money overseas where interest rates are 1%, perhaps as larger volume mutual societies, just as banks do, and you can keep your ATM fees.
You’ll be needing them. You and the cartel you rode in on.
I love the ‘death taxes’ bit, imported straight from the US right. Needless to say there’s nothing remotely radical about the idea of taxing deceased estates. It was uncontroversial accepted practice in Australia almost from the foundation of the colonies, until Bjelke-Petersen decided to make the Gold Coast the national retirement capital and abolished it in Queensland.
I would have thought conservatives would be all for estate taxes. I mean unearned income is bad for people’s characters, isn’t it? Much better that they have incentives to be enterprising than to become members of the idle rich.
Still we’re in good company … Argentina and Mexico also have no estate taxes (unlike those radicals in the UK, USA, Japan, Germany etc etc).
Hang on! With my bank account at NAB, so far as I can work out, the only ATM fee I get charged nowadays is the fee levied for foreign exchange when I buy a book from overseas, the Cabcharge fee when I pay by card for a cab ride, and EFTPOS charges from the local shop. Because at the most I only have about 3 direct ATM withdrawals a fortnight which at the most amounts to 6 a month. I don’t think they even charge anymore for minor over-withdrawals.
(I haven’t consulted NAB publicity as I;m writing this or my bank statements but I think I’ve got that right.)
So, 1) NAB are a bunch of Commies.
2) If they can stop charging ATM fees for a limited number of transactions so they’re more competitive, why can’t the banks stop them for all transactions to be even more competitive unless, of course, competition policy = Communism, a point on which neither Adam Smith ot the major parties would agree, methinks.
LeftyE – didn’t a quite a few people do that a decade or so ago? And then when the Australian dollar dropped and their loan repayments blew out, they blamed the banks for allowing them to borrow!
I’ve no problems with death duties. Better to be taxed when you have no need for money. And with increased life expectancy inheritance probably doesn’t have as much impact as it used to.
I think the “Fall of the Iron Curtain” way be a conflation with the Fall Of Communism and the Fall of the Berlin Wall. Just more sloppy writing.
Meanwhile, the only Dutchman who doesn’t like dykes has put his spoke in over same-sex marriage.
Chris@40: “didn’t a quite a few people do that a decade or so ago? And then when the Australian dollar dropped and their loan repayments blew out, they blamed the banks for allowing them to borrow!”
The issues in those cases (in the mid eighties, just after the float of the dollar) was that the banks marketed the loans to their clients, without apprising them of the exchange rate risk or offering any hedge against that risk.
d
Yes a conservative would approve of death duties as you want people to use assets in the most efficient way possible.
People who buy the asset make better use of them.
Quire some time ago when the Organisation was known as the Bureau of Agricultural Economics there was an article showing quite a dramatic ( and therefore statistical ) difference in returns on farms which were handed down father to son etc and those which were bought.
Death duties would encourage a better allocation of resources.
Oh for heaven’s sake, surely we could be charitable enough to give her the benefit of any considerable doubt, particularly as in the era of media trained dummies sprouting innane talking points, we have someone who came across as a genuine person.
Aaah wrong thread. My apologies to the moderators. Should be on the royal marriage thread.
way = may.
Sloppy writing as opposed to my sloppy typing!
Let me get this straight. You lot want to ban fees on public use of privately owned infrastructure that has already been built and paid for. NAB have to allow Westpac customers to use their infrastructure free, just to avoid the minor inconvenience of finding a Westpac machine. How about letting passers by use their toilets while you are at it?
The sensible response of the banks would be to deny foreign transactions on their machines at all. The Greens would no doubt legislate to force them to open their machines to all.
This is even worse than government takeover. It is government vandalism of private property.
Jane @ 19 links ATM’s to closing branches. Banks can close branches wherever they want at any time. Do you reckon that reducing the local profit margin on the ATM will make it more or less likely that they close the Billibikanka branch?
I drop in to this silly blog every few months to hear you all congratulating each other on how open-minded, progressive and compassionate you are. Alternative arguments are dismissed and ridiculed. I check in at Catallaxy occasionally and they are way more brutal! There are numerous racist blogs, anti-men blogs, anti-women blogs that you can easily lurk around. Group think amplified by technology. I am coming to the conclusion that the web is unhealthy. It is too easy to surround yourselves with like minds and ignore views that challenge.
IIRC, when ATM’s first came in, the defence in relation to joblosses and branch closures, where that they were a cost saving and those savings would be passed onto customers.
Now you get charged for using them.
I also seem to recall vehment denials by the banks that they would eventually charge fees for using ATMs.
Student T 2 48,
If the ATMS are already bought and paid for, there’s no need to make a profit out of them. You’re virtually admitting the banks are using ATMs as a form of gouging.
Student T, the point has been made many times on this thread that ATMs represent a considerable cost saving for banks, and if the banks want to enter into an arrangement to share each other’s infrastructure then good on them – they make it even cheaper to dispense cash to their customers. But the tradeoff is exactly as Jane says – ask a banker if you don’t believe me.
REYNOLDS, are you around, you c*#&?
I don’t know about banning transaction fees. As I’ve said, a simple cost-plus-margin fee would be perfectly reasonable – y’know, the way most products and services are priced. An arbitrary $2 (mininmum) charge seems high to me.
I found your paragraph on blogs confusing. Perhaps given your obvious misreading (in this case) of a comments thread, on a topic about which you’re not very knowledgeable, the problem is partly with you?
Student T, I think I have a remedy for your problem. Simply stop coming to this silly blog.
Have a nice day.
To student T @2
I can understand your concern at market distortions being changed by legislative and or regulation. But as things stand there is a massive regulatory market distortion already caused by government that favours both banks and atm operators.
Wages to government employees and payments to contractors are done by electronic transaction – no choice from the employee or contractor. This is a very obvious market distortion so ATM operators and banks in general get to deduct fees from funds we have no option but to put hrough their system.
Maybe a true market system where we could chose how to receive payments would put market pressure on the robbers.
another distortion that could be abolished, tax breaks for tax fees. Every tax break means that all tax payers subsidise / put a floor under bank fees. With the floor gone we would be more aggressive about shopping around.
I wonder if Student T realises how few banks we’d have left standing without government regulation and guarantees.
But by God, regulation to benefit consumers? Heresy!!
[T]he web is unhealthy. It is too easy to surround yourselves with like minds and ignore views that challenge.
Well don’t give up Student T. Maybe you too will someday metamorphise into an individual generalization.
But in all honestly, it is madness, when private corporations, which make such huge profits are made to feel so insecure that they have to try and increase them. But that is the business culture of the society that we live in. And we’ve given it the innocuous name of “competition”, like it’s got something to do with playing bingo down at the RSL.
Darryl @ 43 – that exchange rate risk is still there, and probably even higher than it has been before and the risk of the exchange rate should have been commonsense to those borrowers. If the banks offered those sorts of loans to home owners (even with explicit warnings) and then the dollar dropped the banks would get crucified.
harleymc – its easy to avoid the ATM fees for most people. Just use an ATM owned by your bank. And if there’s so much profit to be made out of ATM fees why doesn’t someone else start up their own private network and charge just a little bit less than the banks?
On ATM fees: beware the non-bank ATMs that you find at hotels.
Whereas bank ATMs are restricted to a $2.00 per transaction fee, the non-bank ATMs have a variable rate according to the time of day or night.
It’s 3am on Saturday morning at the mid-CBD drinking establishment, you’re decidedly fuzzy and merry and you want to get $50 out of the ATM at the pub for your cab fare home or something else, you’re not really going to notice that the ATM has told you it is charging you $20 for using the ATM.
“And if there’s so much profit to be made out of ATM fees why doesn’t someone else start up their own private network and charge just a little bit less than the banks?”.
Chris @ 57, as I understand it, the entire concept of Direct Charging means there’s no room for, or even possibility of, charging less than the banks. You lease the machine from any one of the many private companies who lease machines, and stock it yourself with cash. You then receive rebates on transactions, which, apparently, have increased dramatically since the introduction of Direct Charging.
The *minimum* costs of ~$2 a transaction to the consumer are fixed and come directly from the bank via the transaction itself – not the machine leaser, or operator. There’s room to charge more than the banks (as per terangeree @ 58) if you think it makes good business sense, but not less.
However that minimum of ~$2 a transaction is obviously more than enough to go around. The banks, the machine leasers, and the operators are all raking in much more now…it’s the consumer alone who is being extorted out of $700+ million a year to fund what is, and can only be described as, a “lucrative” arrangement.
“harleymc – its easy to avoid the ATM fees for most people. Just use an ATM owned by your bank.”
And it’s this argument, of course, that makes it possible for them to defend it. If you don’t like it, just use your own bank, or change banks. So easy. I went out in Lygon St, North Carlton last week. In an inner suburb, a walk to my bank’s nearest ATM would have been at least 15 mins each way…and since most high streets have a maximum of just one or two institutions’ machines, the same applies no matter which you’re with. I’d be surprised if the consensus wasn’t to keep enough machines in the street to maintain brand profile, but beyond that, you’re actually *better off* if your customers use other companies’ machines…since they are.
In short, I don’t believe there’s even nearly enough choice made available to argue the consumer has a choice.
To reiterate: since the consumer now furnishes much more than their fair share of the expense, the banks can afford to pay higher rebates to the operators, and the operators are more able to cover and exceed the lease costs of their machines etc.
So, the legislation has made it more affordable and appealing for the average pub/club for instance to have machines installed. Since a large portion of the money withdrawn from those machines will be spent within the same venue, it will effectively never leave the venue. At the end of each night or week, someone (eg. my partner, citing the joys of managing a bar) is charged with literally washing a portion of the takings, and using it to restock the machine.
The pub/club doesn’t have to go to the trouble and expense of depositing the cash at the bank. The banks don’t have to go to the trouble and expense of counting it and recirculating it again for withdrawal.
Tens of thousands of venues nationwide equals tens of millions of dollars in cash every day that never needs to recirculated outside a series of relatively closed loops.
As a result, the banks can afford to employ less staff nationwide.
The more private ATMs in private establishments circulating the cash privately for them, the better. How could it be otherwise? As I’m seeing it, it can be factored in as a financial benefit to the banks above and beyond that of the unjustifiably high fee itself.
No wonder they collectively lobbied (don’t call them a cartel) so hard for the legislation.
Sory to distract from ATM fees but decriminalising drugs is not a radical position.
In fact, the criminalisation of marijuana in particular, which essentially criminalises the once-only or regular use of a drug tried by over 5 million Australians is radical on the verge of totalitarianism.
There is no liberal or conservative basis for opposing decriminalisation.
What would be radical is Julia Gillard or Tony Abbott turning themselves in at the local cop shop to face the punishment for the crime they once committed.
What’s good for the goose is good enough for the gander.
Nick @ 59 said:
Thats a bit odd. I’d welcome being corrected, but I thought the last set of changes regarding ATM fees forbid banks from charging their own customers for using foreign ATMs. But they are allowed to charge customers of other banks/non-banks a fee for using their ATM. Eg. the owner/leaser of the ATM now sets the fees. Which would I think mean that the banks no longer set the $2 fee that is charged to their customers when using an ATM which is not theirs – but it may well have worked the way you describe prior the last changes.
Very interesting bit about the recycling of money though! ATMs would be a bit of a money making machine for some businesses. There’s one pub that I walk past that offers a discounted meal if you show proof of having withdrawn cash from an ATM on their premises.
You’re right, Chris! I had it all backwards. Ok, that’s the last time I go off on a steam train of inference before putting some effort into getting my facts straight
The following has some more info which contradicts a lot of what I wrote:
Reform of the ATM System – One Year On
Nick – an interesting report you link to. So overhead costs for the ATM are probably around $1 per transaction now. Is a $1 profit per transaction too much? Non bank ATM operators don’t seem to have dipped below $1.50 (and $2 for non bank operators seems to be pretty common). I wonder what $1 per transaction represents in terms of return on capital.
Looks to me like the Greens push for banks not being able to charge people who are not their customers for using their ATMs is just a bit of populist bank bashing. As the report says since the changes more people are choosing to use their own bank’s ATM or EFTPOS to avoid fees.
Chris, have a read through this for more detailed breakdowns of the overhead costs (including the cost of capital, though you’ll have to give me an accounting/economics lesson for dummies on how that factors in):
Payment Costs In Australia
Re. the Greens ATM policy, it’s hard to deny that it’s people on low incomes who are hit the hardest by the fees.
It’s also hard to deny that it’s people on low incomes who are hit the most unfairly. Since you’re withdrawing less cash every transaction, the bank is incurring less cash handling costs ($0.18 out of the $0.74 total average cost per transaction to the ATM owner in 2007). I’m sure that’s not the only component you’re being marked up more for either.
“As the report says since the changes more people are choosing to use their own bank’s ATM or EFTPOS to avoid fees.”
That’s true, but to be honest, I’m not really sure just yet what to make of Graph 3. The lines jump straight up/down by about 5-6% as soon as the legislation kicks in, but then they flatline in a way they hadn’t previously.
What does that indicate to you? I’d suggest that’s where the locality/practicality factor of being able to choose to use your own bank’s ATM pretty much tops out.
And I wasn’t wrong about the banks collectively lobbying hard for this, btw – they submitted the original proposal for it to the RBA. They wouldn’t have done so if it was going to cut their profits.
Nick @ 65 – I’d agree that those on low incomes are more likely to be disadvantaged simply because its a fixed fee. Probably comparatively not that worse off if they are able to do things like withdraw all their pay/benefits in cash that they need just once a month or fortnight. But what are the alternatives – charge a fixed + percentage cost like say overseas visa transactions? It probably wouldn’t make that much a difference.
But I don’t see how this is a bank specific issue. Independent operators (even community organisations) charge in a very similar way. If people want banks to pay more tax then they should do that directly rather than trying to get them to subsidise other services which makes the whole thing very opaque and quite vulnerable to avoidance – eg banks just sell their ATM networks.
I think the upfront reminder of the charge is what is responsible for the change in behavior as the actual charges didn’t change much, just who got the money. It probably flatlines because that level in most cases represents how people value their time. Some people can’t be bothered walking 100m to use a free ATM because to them $2 really doesn’t represent much at all – others will spend a lot more time to save the money, but there is an equilibrium.
If you could access all the data – when people use foreign ATMs and the distance to a non foreign atm it would I think be quite interesting.
Chris, I generally agree, but note that while those figures may look impressive, the change in own bank ATM usage has increased by just 10-12% on what it was before flatlining.
To put that it in real terms, my behaviour, as an average Australian, has changed by just 1 in every 10 withdrawals. That’s less than 1 withdrawal a week. It’s not exactly much to write home about in terms of the success of the scheme.
Fees to customers have decreased by some $120 million a year. That’s great news on the face of it. But I guarantee you that costs to banks and operators have decreased by much, much more than that.
That’s what’s being obscured here.
Speaking as a former poor person, the fact that most ATM’s only dispense 50$ notes makes them not particularly useful for the very poor, who will choose to use EFTPOS at the supermarket/petrol station where they can withdraw smaller amounts.
I tend to agree with Chris, the Greens are being a tad populist with this one.
fb, I have to say I’ve never seen an ATM machine that only dispenses $50 notes.
But regarding EFTPOS usage, you may well be right. I haven’t seen detailed breakdowns based on income, but they can possibly to be found in the ABS’s Household Expenditure surveys.
On the other hand, EFTPOS only accounts for 16% of cash withdrawn in Australia. Since many others, regardless of income, also see the benefit of withdrawing some cash via EFTPOS when they have the opportunity, I honestly don’t know if that’s a large enough percentage to account for it as the number one choice for the average Australian on a low income.
“who will choose to use EFTPOS at the supermarket/petrol station where they can withdraw smaller amounts.”
Well, I guess the Greens argument would be that low-income earners shouldn’t be forced to choose to have to locate a supermarket/petrol station (and purchase something) just to withdraw cash out and avoid a $2.50 fee, given it costs the banks and independent operators much less than that to provide the service, and less again to dispense smaller amounts from their ATMs.
Nick – I think if it can be shown that something the banks are doing is restricting new competitors in providing ATM services that would reduce ATM fees then there would be a valid reason to consider regulatory intervention.
But it looks like to me that there are non-bank competitors who charge very similar amounts without colluding with the banks. But just because it may be cheaper for the banks to provide a service than their competitors I don’t think is sufficient reason to force them to provide that service at a lower price (or for free as the Greens would want).
EFTPOS machines seem to be everywhere these days. And if there’s one trend we seem to be getting from the US that I like its more and more stores not having minimum purchase amounts to use EFTPOS or a credit card. Paid for my parking tonight with a CC – $2, no surcharge. Just one more reason not to bother with cash anymore. The other is the rollout of the credit cards where for small value purchases you don’t even need to sign or enter a pin number, just place your card on the reader.
Nick, in my ten years in the area I currently live I’ve only ever encountered one ATM that dispenses 20′s, and it doesn’t exist anymore, all the others only spit out 50′s. I live in the outer suburbs, supermarkets and petrol stations are easier to get to than banks, same goes for the two country towns I’ve lived in. Maybe my experience has more to do with not being a true city-dweller, I’m not sure, but I’m surprised by how low the EFTPOS figure you quote is.
The idea that you shouldn’t need to buy stuff to access your money seems noble, but most people want to access money simply to buy stuff (loke groceries and/or petrol) so I think it is kind of a moot point. If all you have is rent and bills then you should be able to do that via bank transfer, which should also be free.
Like Nick, my experience is the opposite FB. Never seen a single ATM that didn’t do 20s – quite a few that only do 20s though, which is a pisser if you want fifty bucks.
Well, I’ve learnt something tonight then. The stall holders at my farmers market are always hitching about how people only have 50′s because of the ATMs. Maybe it’s a SA thing, I’m pretty sure I’ve only ever been able to get 50′s in the city too.
Bitching not hitching. Stupid phone.
BTW FB – I finally got round to planting those cavolo nero seeds – with a pretty awesome germination rate. More than enough for a dozen very nice xmas pressies, and about ten in my own back yard.
God I love the stuff – rich man’s silverbeet.
fb @ 74 – I wish ATMs let you choose the denomination of the notes you want like they used to. I feel a bit guilty using $50 notes in small shops when I’m only spending a couple of dollars. But I guess someone figured it’d be cheaper if they only had to stock one type of note in the machines.
Oh and I can’t resist linking to this site: http://damnyouautocorrect.com/
Glad they went well FDB! Yeah, it’s a great addition to a veggie patch, so yummy and versatile, and quite an ornamental plant too, I reckon.
Lol @ the link, Chris. It tried to turn my second attmept at bitching into botching, so I think somehow I ended up with a prudish one. I don’t think this phone is going to turn dinner into dildos! Heh.
furious, if you only get fifties, you’re asking for the wrong amount (a multiple of $50). I note, btw, you can’t get hundreds out of the fuckers for love or money.
If you ask for, say, $80, it’ll come out in twenties. As an aside, I remember the ATM at Adelaide Uni would deliver $10 back in the day. Obviously a concession to poverty-stricken students who desperately needed to get a couple of beers.
DI(NR) – I reckon you should start composing an apology for insulting St Furious’ intelligence there.
UWA used to have a machine with tens too – they’d run out almost immediately after each re-stocking, but oh boy it was awesome in a tight spot. Plus you could still get a jug of beer and a pie with it.
*taps out pipe*
Heh. Yairs, I’ve tried 40, 80, whatever – though I gave up trying that caper up several years ago, because none of ‘em could dispense that amount. These days the farmers market is about the only place I pay cash at.
I went to an ATM in Sydney’s inner west yesterday. I needed several hundred dollars. It came out in 20s.
Well, yes, apologies furious. (It should’ve occurred to me that you would’ve tried). I’m pretty sure I’ve managed to get twenties out of an ATM recently, though – including when I would’ve preferred fifties but the machine had clearly run out of them.
Having been a victim of this massive computer glitch affecting millions of Australians and thus had my brain temporarily frazzled
http://www.heraldsun.com.au/business/nab-computer-glitch-hits-wage-centrelink-payments/story-e6frfh4f-1225961012671
it has taken some time for my normally alert and suspicious mind to wonder if this systems breakdown was engineered just to show us what life would be like without ATMS if they were shut down because banks could no longer charge fees.
Na! They wouldn’t dare. Would they?