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The Australian National University

Banking on Indigenous communities: Issues, options, and Australian and international best practice

Working Paper 18 / 2002


The ability of people to manage and budget their incomes, arrange to pay third parties, purchase food, goods and services, and maintain a level of financial and economic independence and planning, all rely on maintaining informed access to appropriate banking and financial services.

The rhetoric of economic independence is commonly employed as a laudable objective for Indigenous peoples. However, there is little evidence of systematic attention being applied to ensuring Indigenous Australians can even enjoy equitable levels of access to those essential banking and financial services that are taken for granted by other Australians (Reconciliation Australia Strategic Plan 2001–2003).

Aims of the workshop

This background paper has been developed to inform and stimulate discussion on some of the issues that will be discussed at the workshop on ‘Improving banking and financial services for Indigenous Australians’. It is not prescriptive, nor does it attempt to cover all the issues involved.

A key aim of the workshop is not merely to describe current challenges but to identify and debate possible options for the future. The options contained in this paper identify potential ways of improving Indigenous people’s access to banking and financial services by building on positive initiatives and experiences. To this end, workshop conveners are conscious of the need to identify realistic and practical ways forward, as well as recognise that there are no instant or magic solutions to what are often complex problems. Reconciliation Australia believes the workshop provides an important first step in bringing key players together to share and learn from each others’ experiences, and in turn generate a better understanding of how to overcome existing barriers to Indigenous economic development. Thus the options identified in this paper focus on developing mutually beneficial cooperation between Indigenous communities, the financial services sector and governments.

Part 1 of this paper discusses the importance of access to banking and financial services as a means of facilitating economic development, reducing welfare dependence and promoting asset accumulation. It explores some of the historical factors that have inhibited informed Indigenous access to, and use of, banking and financial services and the resultant reliance on informal financial service providers. It also identifies the need for more systematic research of both Indigenous access to, and use of, banking and financial services, and potential commercial opportunities resulting from the impact of Indigenous community and corporate cash flows on regional economies. Finally, part 1 of the paper also examines the relationship between informed access to banking and financial services and the wider policy issue of reducing welfare dependence.

Part 2 of this paper identifies current and future trends in the provision of financial services in regional and remote Australia and the implications of these trends for Indigenous communities. In particular, these trends are reviewed against the backdrop of the current and projected demographic outlook for the Indigenous population, especially in remo