The Nationals Senator for New South Wales John Williams has floated the idea of Australia Post offering specialist banking services as a competitor to Australia's big four banks. 

Senator Williams raised the issue when questioning representatives of the NSW Business Chamber during a Senate inquiry into the availability of finance for small business.

Senator Williams said competition in the banking industry is being reduced because of takeovers. He instanced Westpac's takeover of Bank SA, St.George and Rams, and the swallowing up of Bank West by the Commonwealth Bank.

"We saw the demise of the Commonwealth Development Bank years ago, and perhaps Australia Post could fill a void to provide banking services in almost all towns and cities.

The new Managing Director and Chief Executive of Australia Post Ahmed Fahour has a banking background with NAB and Citigroup and he should explore opportunities to position his organisation as an alternative to the Big 4 in regional areas.

Australia Post would have the backing of the Federal Government and would provide essential finance for the growth of small business, as well as being a safe and secure authorised deposit-taking institution.

I firmly believe that this idea warrants more research and consideration. Australians would welcome the competition", Senator Williams said.