Weekly Update: 05.08.22

“There’s been no increase in that default rate yet. And in fact, it’s lower now than it was in 2019, before COVID, or before interest rates started to rise.”

– ABA CEO Anna Bligh, ABC Radio Hobart, 3 August 2022

Parliamentary Update:

• The Albanese Government’s Climate Change Bill 2022, legislating a 43% emissions reduction target, has passed the House of Representatives. Labor has secured the support of the Greens, making passage of the Bill likely when Parliament meets again in early September.
• Parliamentary committee appointments:
  • Daniel Mulino MP has been appointed Chair of the House Economics Committee (membership). The responsibilities of the former Tax and Revenue Committee have been amalgamated into this Committee.
  • Senator Jess Walsh has been appointed Chair of the Senate Economics Legislation Committee (membership).
  • Senator Andrew Bragg has been appointed Chair of the Senate Economics References Committee (membership).
• Meghan Quinn will become the new Secretary of the Department of Industry, Science and Resources, effective 22 August. She moves from Deputy Secretary for Markets Group in Treasury and is the last Departmental Secretary to be appointed since the election of the Albanese Government.

Economic Update:

• The RBA raised the cash rate to 1.85%. It now forecasts:
  • Faster inflation at around 7.75% over 2022, a little above 4% over 2023, and around 3% over 2024
  • Slower GDP growth of 3.25% over 2022 and 1.75% in each of the following two years
  • Unemployment to be around 4% at the end of 2024 
• Retail Trade rose 12.0% compared with June 2021. Total online retailing sales were $3,635.1m in June 2022, in seasonally adjusted terms.
• Exports rose 5.1% to $61.5 billion, driven by rises in metals, ores and minerals. Imports rose 0.7% to $43.8 billion, driven by a rise in inbound tourism. Australia’s trade surplus rose to $17.7 billion in June, surpassing economists’ estimate of $14 billion.
• The RBA released its 28 July 2022 chart pack. The 10-Year Australian Government Bond Yield has dropped from a recent spike of just under 4%, whilst tradable and non-tradable inflation are both nearing 5%.
• New Zealand house prices recorded their biggest three-month decline since 2008, falling 2.5%. Prices have now fallen for the fourth consecutive month. In May, the RBNZ projected an 8.1% drop in house prices for the year.
• The Bank of England raised interest rates by 0.5% to 1.75%, the highest since 2008. The BoE predicts inflation will reach more than 13% by the end of 2022.

Regulatory Update:

• APRA has published the findings of its latest climate risk self-assessment survey. The responses to the survey suggest that climate risk remains an emerging discipline, with only a small portion of survey respondents indicating that they have fully embedded climate risk across their risk management framework.
• The ACCC has warned consumers of fake bond investment scams. Losses to imposter bond investment scams have tripled in the first half of this year to $20 million.

Communications:

• Major consensus reached on climate risk reporting. Co-ordinated by the ABA, 20 peak professional, industry and investor bodies overseeing $47.2 trillion in assets made a joint submission to the ISSB. Treasurer Dr Chalmers said he would write to the ISSB to express the Australian government’s support for the draft arrangements.
• ABA CEO Anna Bligh spoke with ABC Radio Hobart’s Kylie Baxter on historically low interest rates, low default rates and what to do if a customer has difficulty with their mortgage repayments.

More here: Read the Full Weekly Update

5 August 2022Weekly Update