Minister calls on banks to give small businesses a break

7/11/02
Small Business Minister Clive Brown has urged the top four banks to give small business a fair go.
Mr Brown's comments follow the release of the National Australia Bank's financial highlights, which include a net profit of $3,379million, up 62 per cent from $2,088million.
"The NAB's end of financial year summary boasts that it is the leading banker to small and medium enterprises," he said.
"If the big banks want to look after their small business customers, it is time they looked at their costs, access and service.
"For example, data sourced by the Reserve Bank of Australia has confirmed that small businesses paid $2.64billion in bank fees last year.
"The growth in small business bank fees in 2001 was 18 per cent.
"In addition, merchant service fees (the fee paid by a business to its provider of banking services for the clearing and processing of credit card payments) paid by small business increased by an aggregate of 89 per cent between 1997 and 2000.
"In light of these figures, the small business sector can rightly claim to question its treatment by the banking sector."
Mr Brown said a recent forum of small business representatives confirmed their concerns at dwindling personalised service from banks and upward-spiralling fees.
"Costs and competition have been contentious issues for some time," he said.
"However, other justifiable issues include limited banking products and services and barriers to switching banking providers.
"Australia has one of the most concentrated banking markets in the world, which has resulted in almost complete dominance by the big four banks.
"Competition in small business banking will only improve if small players and new entrants build market share and deliver price competition and small businesses are free to switch banking providers without difficulty."
Mr Brown said he and his State and Territory counterparts were committed to addressing the fact that small businesses were trapped in a banking environment that was characterised by spiralling costs and diminishing service.
"The Federal Government and the banking industry must implement initiatives to help alleviate the financial burden facing small businesses," he said.
Minister's office: 9222 9699