Weekly Update: 07.10.22

Read the full Weekly Update here

“I’ve had conversations with Anna Bligh, who’s been very constructive, I’ve got to say, and the banks, about… a new model of using a service in regional rural Australia that brings in those lowest-licenced post offices that are looking for money – that makes sure that they’re adequately paid for it… this might be an opportunity to look differently and be constructive.”

–  Nationals Leader, David Littleproud, on the Regional Banking Taskforce Final Report, ABC News Oct 4.

Parliamentary Update:

• Treasurer Jim Chalmers and Communications Minister Michelle Rowland held a joint press conference announcing new regulations to allow the sharing of limited Optus data to banks.
• Financial Services Minister Stephen Jones and the Treasurer released a media statement on debanking and the Council of Financial Regulators’ paper on potential policy responses. The Council provided its advice on debanking to the Treasurer in late August 2022 (but was released publicly this week).
• The Treasurer announced that consultations have been opened on international corporate tax reforms.
• The Treasurer held a key press conference on the RBA cash rate decision, the upcoming Budget, and upcoming international meetings.
• Deputy Leader of the Opposition Sussan Ley accused Prime Minister Anthony Albanese of breaching the faith of Australians over uncertainty of the Coalition’s stage three tax cuts. The Treasurer has said that the Government’s position on the Stage 3 tax cuts has not changed, but is regularly mentioning the need for responsible economic management and that fiscal strains are “intensifying rather than easing”.

Communications Update:

• The ABA’s industry-wide coordination in response to the Optus data breach continued this week with a statement welcoming the Federal Government’s decision to share compromised customer information with banks, including quotes from the Chair of the ABA and CEO of Westpac, Peter King.
• Positive comments by Nationals Leader David Littleproud complimenting banks’ contributions on the publication of the Regional Bank Branch Taskforce report.

Economic Update:

• The RBA has released its October Chart Pack on the Australian Economy and Financial Markets. Domestic deposits remain high at 60% of share of total funding, and major banks’ NIMs remain below 2%.
• The ABS has released lending indicators up to August 2022. The value of new loan commitments:
  • fell 3.4% for housing
  • rose 9.5% for personal fixed term loans
  • rose 51.7% for business construction (a typically volatile series)
  • fell 23.6% for business purchase of property (a typically volatile series)
• Retail trade rose 19.2% compared with August 2021. It rose 0.6% month-on-month, according to the ABS.
• IMF Managing director Kristalina Georgieva said a third of the world’s economy would suffer at least two quarters of economic contraction in 2023, signalling that the IMF is set to downgrade its economic forecasts again, for the fourth consecutive quarter.
• The ABS released its Household Impacts of COVID-19 Survey. Fewer Australians households (43%) tested for COVID-19 and of those tested, fewer reported testing positive (22%).
• The RBA released its October financial stability review, outlining rising global uncertainty, rising inflation, climate change and cyber attacks as risks to financial stability.
• Australia’s population was 25,890,773 at 31 March 2022. Annual growth was 234,100 people (0.9%). Net overseas migration was 109,600, an increase of 203,900 from 2021. Natural increase decreased by 4.6% (6,300 people) from 2021.

Regulatory Update:

• The RBA Board increased the cash rate target by 25 basis points to 2.60%. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 2.50%. 
• ASIC has launched legal action against Latitude Finance Australia and Harvey Norman over the promotion of interest free payment methods. ASIC alleges that from January 2020 to August 2021, advertisements promoting ‘no deposit’, ‘interest free’ payment methods over a specified term for purchases at Harvey Norman were misleading.

Read the full Weekly Update here

07.10.22Weekly Update