Weekly Update: 23.09.22

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“I encourage you to see this Budget in October as the first of three or maybe four this term – the beginning, not the end of a big national conversation about the structural position of the Budget, how we fund the things that we value not just in our economy, but in our society, whether it’s healthcare or the other essentials that we need to provide. There will be difficult decisions in the October Budget.”

– Treasurer Chalmers, Press Conference, 20 Sep 2022

Parliamentary Update:

• Treasurer Jim Chalmers and Finance Minister Katy Gallagher gave a joint press conference previewing the October Budget.
• Treasurer Chalmers has also warned that intensifying international headwinds and rampant inflation are leading to interest rate rises and economic uncertainty, in an op-ed published in The Australian.
• Next week’s draft legislation programs have been released for the House and the Senate.
• A transcript of Governor Lowe’s appearance at the House Standing Committee on Economics on 16 September has been released.
• Senator Andrew Bragg released a draft Private Members Bill on crypto regulation – the Digital Assets (Market Regulation) Bill.

Economic Update:

• New research from Roy Morgan shows an estimated 854,000 mortgage holders (19.4%) were ‘At Risk’ of ‘mortgage stress’ in the three months to July 2022. The poll shows mortgage stress still remains below long-term averages, but it is rising.
• Melbourne Institute released their Pulse of the Nation Survey this week. Key findings:
  • Adjustments of food choices and drawing on savings. About 56% of Australians state they bought cheaper food options, 50% have reduced dining out, and 38% have dipped into savings.
  • Single-parent households with children are struggling. Almost 15% have pawned or sold possessions, 24% have cancelled or deferred medical appointments, 34% deferred bills or negotiated payment plans and a quarter have borrowed from friends or relatives.
• Australians currently have the highest median wealth per adult ($273,900) in the world, according to Credit Suisse’s Global Wealth Report. Australia’s mean wealth ($550,110) was the 4^th highest, behind Switzerland, the US and Hong Kong. Globally, convergence between median and mean wealth is narrowing – lowering inequality across regions. Download report.

Policy Update:

• The Office of the Australian Information Commissioner (OAIC) completed a major review of the Privacy (Credit Reporting) Code 2014. The review agreed with the ABA’s recommendations that credit reporting needs to be changed to better protect victim-survivors of family and domestic violence, as well as to better integrate credit reporting from telecommunication entities, utilities, and fintech such as Buy-Now Pay Later.
• The ABA attended the CEO Stakeholder Forum hosted by the NSW Department of Customer Service, on improving property settlement experiences for the people of NSW. NSW is the only state or territory with 100% electronic lodgement of land dealings.
• Minutes of the RBA monthly board meeting were released this week.

Regulatory Update:

• The ACCC is actively targeting ‘greenwashing’. The ACCC has raised concerns about environmental or sustainability claims in business marketing, and will soon commence an internet sweep. A similar review in 2020 by the International Consumer Protection Enforcement Network found 40% of environmental claims were potentially misleading.
• RBA Head of Domestic Markets, Jonathan Kearns, delivered a speech to the AFR Property Summit 2022 ‘Interest Rates and the Property Market’. “Overall we know that higher interest rates will tend to depress residential and commercial property prices but there is considerable uncertainty about the magnitude and even the timing.”
• Deputy Governor of the RBA, Michelle Bullock, announced that while the RBA’s $281b Bond Purchase Program was effective in supporting economic growth and maintaining market function through the pandemic, it resulted in a $27b loss. The RBA expects to return to positive earnings in the coming years.

Read the full update here

Sep 23Weekly Update