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Di Natale: “People’s Bank Will Address Decline In Homeownership Rates”
The Greens Leader Dr. Richard Di Natale (Archives)

A new financial institution is needed in Australian banking market, “the People’s Bank will give current and future homeowners a much needed advantage over investors”, said The Green’s leader Richard Di Natale during his speech at National Press Club in Canberra on Wednesday.

“Our economy is changing rapidly, and Government has to keep up. We have to continue the conversation that I kicked off a year ago at this very podium; about what work will look like in the future when the rise of digital and automated technologies means that up to five million existing jobs in this country will be lost within the next ten years,” Mr. Di Natale said.

Greens offered 5 page brochure with the detailed description of the idea of People’s Bank.

Green’s proposal assumes that People’s bank will offer a no-frills ‘mortgage tracker’ account to homeowners who will be able to pay off their home since they will have opportunity to borrow up to 60 percent of the value of the property directly from the Reserve Bank of Australia. The authors of the proposal set minimum interest rate at 3 percent and add approximately 0.5 percent for the administration costs of contracted service.

Mortgage tracker accounts would only be available to people with no other direct residential property holdings, including through self-managed superannuation funds (SMSFs) and private trusts.

“It’s the only way we can force them to actually provide a public benefit, instead of distorting the economy and loading up the financial system with risk”, Mr. Di Natale said.


Worked example

Sam and Ashley have saved $90,000 for a deposit to buy their first home. They settle on a house in Pleasentville for $600,000. The People’s Bank will lend them 60% of the value of the home, which equates to $360,000. They will then need to borrow a further $150,000 from a retail bank.


House price $600,000
Deposit -$90,00
Loan requirement $510,000

People’s Bank
(60% x 600,000). $360,000

Retail Bank. $150,000


Comparing a retail loan for the full $510,000 at 4.5% with a combined People’s Bank loan at 3.5% and retail loan at 4.5%, if the monthly repayments were the same ($2,834.75 per month) the combined loan would be paid off 3 years and 4 months sooner and would save Sam and Ashley $113,102 in interest.

Combined loan: Paid off in 21 years 8 months; total interest paid $227,311

Retail loan: Paid off in 25 years; total interest paid $340,413.

Assuming a People’s Bank rate of 3.5%, stable retail rate of 4.5%


(Excerpted from People’s Bank. The Greens.)


Greens want that bank would face the same type of competition which retailers have to participate after Aldi and other discounted stores entered the market. In result, big banks will have to lower their fees or compete harder for a customer.

Greens want also help to make bank accounts as mobile and transferable as telephone numbers. “Banks rely on it being “too hard” for customers to move their accounts,” the description said.

Full account portability—or ‘open banking’—should be introduced as soon as possible. This would include a common data system for banking that gives customers ongoing ownership of their data as well as the ability to shift seamlessly and safety from one provider to another.

Richard Di Natale said that People’s Bank services will help turn around the drastic decline in homeownership rates. It will also force the banks to provide a public benefit, instead of distorting the economy and loading up the financial system.