By Denis Hay
Description
Big Four banks in Australia profit as citizens struggle – learn how dollar sovereignty could shift the balance of power.
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Introduction: The Banking Illusion
Australia’s Big Four banks – Commonwealth Bank, Westpac, NAB, and ANZ – are raking in billions while everyday Australians face soaring housing costs, growing debt, and job insecurity.
These banks dominate nearly every financial transaction, from home loans to superannuation, yet their profits surge even as Australians suffer under the weight of rising interest rates and economic inequality. This profit-first model isn’t just unfair – it’s a systemic problem that amplifies financial hardship and limits public investment in the services we all need.
But there is another way. By reclaiming Australia’s dollar sovereignty, we can challenge the power of private banks and build a public banking system that works for the common good, not corporate shareholders.
Who Are the Big Four Banks in Australia?
The Big Four banks in Australia – Commonwealth Bank, Westpac, NAB, and ANZ – control over 80% of the national banking sector. Their reach is vast: from home loans and savings accounts to superannuation funds and business financing.
Market Power and Political Influence
- These banks spend millions on lobbying and political donations.
- Former politicians often take roles on bank boards, creating conflicts of interest.
- Smaller community-owned banks and credit unions are pushed out by anti-competitive practices.
This concentration of financial power allows them to shape regulation and policy to suit their bottom line – not the public good.
Because of their size, profits, and political reach, the Big Four are uniquely positioned to influence banking laws and financial regulation in ways that benefit themselves. They lobby intensively, make large donations to both major political parties, and maintain a revolving door between their executive ranks and government roles. This often results in regulatory capture – where watchdogs go soft on enforcement – and watered-down reforms that preserve the status quo. As a result, legislation is skewed toward protecting private profits over protecting people.
Profiting While Australians Struggle
While Australians endure a cost-of-living crisis, the Big Four banks are thriving. In FY2023 alone, their combined profits exceeded $30 billion. These profits aren’t reinvested into communities – they’re distributed to shareholders, many of whom are overseas investors.
Housing Market Manipulation
- Banks inflate property prices through aggressive investor lending.
- Young Australians and low-income families are locked out of the housing market.
- High interest rates push up mortgage repayments while boosting bank earnings.
Hidden Fees and Financial Punishment
- Monthly account-keeping fees, overdrawn penalties, and ATM charges are routine.
- These disproportionately impact vulnerable Australians, including pensioners and casual workers.
- Even during crises like COVID-19, banks prioritised shareholder returns.
Job Cuts Despite Billions in Profit
- Banks have off shored thousands of jobs in the name of efficiency.
- Regional branches have closed, leaving rural communities without face-to-face service.
- Profits rise, but local employment and service delivery decline.
Banking on Inequality – Systemic Design Flaws
The Australian banking system is designed to reward profit over people. It’s not broken – it’s working exactly as intended.
Public Trust Shattered
- The 2018 Banking Royal Commission uncovered fee gouging, fraud, and unethical lending.
- Some banks were charging fees to deceased clients for years.
- Despite findings, penalties have been light, and business largely continues as usual.
The lack of real reform has deepened public disillusionment.
Public Loss and the Erosion of Sovereignty
As the Big Four banks amass wealth, Australians are told there’s not enough public money to fund vital services.
This belief is rooted in a dangerous myth: that government must rely on taxes or private borrowing to fund public goods.
The Myth of Scarcity
Australia issues its own sovereign currency. Like the UK, Japan, and the US, it cannot “run out” of money. Yet governments behave as though they’re financially constrained – allowing private banks to dominate.
This false narrative justifies underfunding public health, housing, and education while banks enjoy generous regulatory leeway.
How Dollar Sovereignty Can Shift the Balance
Australia’s monetary sovereignty means it doesn’t need to borrow from the Big Four banks or issue bonds to pay for public services. The government, as a currency issuer, can fund what’s needed—while using regulation to manage inflation and demand.
What Is Monetary Sovereignty?
- It means Australia controls its own currency and central bank.
- Unlike households, the government doesn’t need to earn before it spends.
- The real limit is inflation – not available dollars.
Replacing Private Greed with Public Purpose
- A national public bank could finance infrastructure, public housing, education, and renewables.
- Instead of funnelling interest to private shareholders, returns would support public projects.
- Banking becomes a tool for equality, not extraction.
Public Banking Models That Work
- Bank of North Dakota (USA): A profitable, state-owned bank funding local development since 1919.
- Postal Banking (Japan, France): Public postal systems that offer affordable banking to all.
- Australia could follow suit – using its monetary sovereignty to establish a financial institution that works for the people.
What Needs to Change?
The Big Four banks in Australia will not voluntarily give up power. Reform must be systemic.
Key Reforms to Reclaim Financial Power
- Ban political donations from banks to restore democratic integrity.
- Establish a public bank with a service-first mission.
- Regulate investor lending to stabilise the housing market.
- Protect local credit unions and mutuals from predatory competition.
- Use public money to serve public purpose – not prop up corporate profit.
These reforms won’t happen without public pressure – and public understanding of how Australia’s monetary system truly works.
💬 Reader Engagement Question
Do you think Australia needs a public bank to put people before profit? What would financial fairness look like to you?
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❓Q&A Section
Q1: Who are the Big Four banks in Australia?
Commonwealth Bank, Westpac, ANZ, and NAB dominate banking services across Australia. They control most mortgage lending, deposits, and financial markets.
Q2: How do banks profit while Australians suffer?
They increase interest rates, charge fees, and promote property speculation – generating billions while households struggle with cost-of-living pressures.
Q3: What is monetary sovereignty in Australia?
It means Australia can issue its own currency to fund public needs without borrowing from private banks. The government faces no financial constraint – only real resource limits like labour or materials.
Q4: Can Australia afford a public bank?
Yes. With monetary sovereignty, the government can create a public bank using public money – not taxes or private debt – investing directly in people’s needs.
Q5: Why hasn’t the government implemented banking reform?
The banking sector wields enormous political influence. Through donations, lobbying, and media influence, it resists regulation that would prioritise people over profit.
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References
Australian Banking Association – Key Facts
Banking Royal Commission Final Report (gov.au)
This article was originally published on Social Justice Australia
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