The Commonwealth Bank should be suitably chastised by its retreat on increased banks fees. The rudeness of the rises was compounded by the cheek of the timing _ just after the Prices Surveillance Authority had handed in its report.
The Government has been quite right to hold the sword of regulation over the heads of the banks if they do not behave with some social conscience over small account-holders.
Economic rationalists and free marketeers have argued that the banks have a right to charge so that each service is fully paid for by customers. That may be a reasonable argument if banking in Australia was solely driven by market forces like, say, confectionery or used cars. It is not. The Federal Government gives an unwritten guarantee that none of the big five banks will go under.
Further, society in general provides the banks with a large amount of social capital from which they draw to do business, not all of which is exactly costed according to user-pays principles _ roads, education, the phone system to mention a few.
Social security and wage arrangements almost universally require electronic transfers directly into accounts. All of social security and a significant amount of wages come from the Federal Government. The Federal Government should not have to go to the inefficient extreme of setting up its own bank to ensure these people have reasonable access to banking services, but it can certainly insist on a reasonable repayment of infrastructure, if the banks do not volunteer it.