Rose Conway Walsh (Sinn Fein) | Oireachtas source

It is crazy, especially for people in rural areas. This is why we are talking about a rural banking system, although I acknowledge the proposal is for SMEs. That people from a rural area who have no public transport and who have to travel miles to the bank are told to come back the next day is absolutely bizarre. It is happening because it is being facilitated. I lost count of the number of times we were given guarantees that customers who had been identified as being affected by the tracker mortgage scandal would no longer be contacted or, indeed, harassed by those same banks looking for the payments, yet this continued in very many cases. Therefore, there is something seriously wrong with the current banking model. On 2 May, my colleague, Deputy Doherty, asked when the interdepartmental report on public banking, which is based on the Sparkassen model, would be published. Let us remember that the publication of the report has already been delayed by several months. The Deputy was told that the report had been completed and it would be brought before the Government in the next few weeks. Has the Minister present, particularly as he sits at the Cabinet table, seen the report? When will it be published and made public?

The current threat to more than 390 post offices brings the issue of public banking into sharper focus. The postmasters at these branches have been offered a no win situation. Either they take the offer of a redundancy package of two years salary now or they try, as best they can, to keep their branches viable. The current option that has been presented is that the post office network must downsize and that the remaining branches in larger towns should open themselves up to the pillar banks and offer their services. It seems that Ulster Bank, AIB and Danske Bank are now being presented as the saviours of small post offices. The reason for discussing public banking is that we desperately need another banking model that is not open to the greed and incompetence that we saw those very same pillar banks destroy our economy. Why has the current offer been made to the postmasters? Surely if the Government was serious about setting up a second tier of banking it would strive to keep these branches open. There is also huge political will to get this done. I know that the previous Governor of the Central Bank favoured a second tier of banking. The current Government has a commitment to seriously examine the issue in the programme for Government. It is not as if we would venture into the unknown. There are many examples worldwide of public banking that uses or co-operates with existing structures, such as the postal network and delivering a second tier banking system.

I welcome Mr. Noel Kinahan from Irish Rural Link to the Gallery. I commend the work that Irish Rural Link has done on this matter. It is not like reading a blank sheet because proposals have been put forward. The German cohort met the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach again. I hope to be part of the delegation from the committee that will travel to Germany in September. On that occasion we will take a closer look at the German banking system and try to identify ways to replicate the model here. There are lots of answers and there are lots of actors involved. However, it is the Government's responsibility to have a banking system that meets the needs of its people.

Public banking is not solely focused on commercial lending and returns to its shareholders. It can play a huge role in lending to SMEs that are still a major employer in rural Ireland. In Ireland as much as 90% of lending to SMEs is controlled by two banks. I believe we cannot allow that situation to continue and we can no longer remain dependent on two pillar banks. The post office has a far greater presence in local communities when compared with pillar banks. The post office network could help re-establish the relationship between the borrower and lender. When one has a public community system like that one has a relationship, and such a relationship existed before the banks got greedy and reckless. It means that one could approach one's bank manager and bank personnel to discuss one's needs and plans with them.

One of the things that has disappeared from the pillar banks, especially in rural areas, is the relationship between a bank manager and his or her customers. I hear that refrain from members of the farming community all of the time. When these people approach banks now nobody understands the farming industry and how payments are lodged into and leave one's bank account at certain times of the year. As Senator Norris has said, in many rural branches one can no longer deal in cash, collect foreign currency or even set up an appointment with a member of staff.

In North Dakota and Germany there are public banking systems in place. I think a public banking system has been in place for 200 years in Germany. Such systems have proven to be really successful. Notwithstanding the fact that North Dakota has a population of only 750,000, as much as $1 billion has been returned to the state in North Dakota, which was given back to its citizens. In this country the banks have not had to pay corporation tax for decades. The money collected from such a tax could be spent on tackling the neglect of rural Ireland. If this country introduced a public banking system and the system was invested in rural Ireland then we could have a completely different approach thus leading to an entirely different outcome for our citizens.

The New Zealand model that we are considering today was established in 2002 yet already it has 20% of the overall banking market that caters for its population of 4.6 million. The New Zealand banking model could be replicated in this State. We have heard from representatives of the Kiwi (Post) Bank that the banking service was offered in order to break the back of the major Australian banks that held a huge market share in New Zealand yet they sent most of the profits back to Australia. The post office network needs something new. The public banking model holds the chance of keeping branches open and giving customers a choice in banking. We have talked for a long time about the fact that customers were mistreated by the major banks. I believe it is time to allow them to vote with their money and business and be allowed to embrace a new model of banking that has proved successful in many countries, including New Zealand. I firmly believe in a public banking system and Sinn Féin, as a party, has always believed in a public banking system but after the economic crash it is incredible. Let us not forget that only the Government can deliver and put impetus on introducing a public banking system.