Weekly update: 21.04.23

“Today’s bank robbers are not tunnelling underground; they are at ergonomic desks with profit share spreadsheets, hedging risk and buying crypto with the stolen proceeds. Even worse, some criminals deploy a slave-like workforce to trick customers to hand over their savings.” 

ABA CEO, Anna Bligh

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Parliamentary Update:

• Treasurer Jim Chalmers spoke on the RBA Review and announced that:
  • The Federal Government has agreed, in-principle, to all 51 recommendations from the Review
  • The Federal Government intends to have implemented the recommendations by the middle of 2024
  • Consideration on whether to extend Governor Lowe’s term, or to appoint a new Governor, will take place in the middle of this year, and
  • Two new RBA Board Directors will be appointed: Iain Ross and Elana Rubin

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“This is about learning from the past to strengthen the Reserve Bank for the future. This is about bolstering the independence of the Reserve Bank, not diminishing its independence.” 

 The Hon Dr Jim Chalmers, MP Treasurer

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• The Treasurer released the first report of the Government’s interim Economic Inclusion Advisory Committee. The Treasurer said the government would consider, but not commit to, the recommendations.
• The Treasurer also held a press conference discussing his recent economic meetings in Washington DC and risks in the global economy. 
• Federal Opposition Leader Peter Dutton announced changes to his shadow ministry.

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Policy Update:

• ABA’s CEO Anna Bligh and Chief of Policy Chris Taylor appeared at the Select Committee on Cost of Living’s public hearing into the cost of living and shared with the Committee the trends banks are observing during this period and the forms of support banks can offer customers who are facing financial difficulty.
• The ABA is collaborating with Member banks to respond to the Data Standards Body’s Decision Proposal (DP 289), on the Consumer Data Right Register Standards Revision.

ABA CEO Anna Bligh and Chief of Policy Chris Taylor appearing at the Select Committee on Cost of Living this morning

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Regulatory Update:

• ACCC released the Targeting Scams 2022 report. They found that Australians had lost $3.1 billion to scams in 2022 with investment scams accounting for the most lost at $1.5 billion, despite accounting for only a small proportion of actual scams reported to Scamwatch. Despite the increase in total losses, ACCC’s Scamwatch received 239,237 scam reports last year, a 16.5 per cent drop on the number of reports received in 2021.
• The Attorney General’s Department has commenced consultation on reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.
• Treasury has commenced a consultation into financial adviser education standards reform.

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Economic Update:

• Data released by the RBA on retail payments shows that over the past year, credit card spend has grown at a faster rate than debit card spend. This reverses the longer-term trend where consumers have shifted their preference from credit to debit and comes after an extended period in the decline in the growth of spending on credit card.  In fact, the growth in credit card spend comes after a significant dip in credit card usage during COVID, Figure 1. Despite this, the value of transactions has returned to above long-term trend.

Figure 1: Value of credit card transactions, Original & trend, December 2022 – February 2023, $m 

Source: RBA Credit and Charge Card Transactions, Seasonally adjusted, Table C1; Analysis by ABA.

• While credit card transactions have increased, Australians are paying their balances off in equal measure, resulting in a lower value of balances accruing interest, Figure 2. As a result, where total balances dropped sharply during COVID, they have since only increased slightly, despite the return to consumers spending on credit. This suggests a remarkable shift in consumer appetite for sustaining credit.

Figure 2: Value of credit card transactions, December 2022 – February 2023, $m

Source: RBA Credit and Charge Card Transactions, Seasonally adjusted, Table C1; Analysis by ABA

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Communications and Media Update:

• Issues managed this week included the release of a scams-themed report from both ACCC and ASIC.
• We also continued to promote our anti-scams campaign with a series of radio interviews and an opinion piece by ABA CEO Anna Bligh published in the Australian Financial Review.

The ABA’s ‘Hear the alarm bells’ anti-scams campaign launched last week will continue to run into June

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Upcoming Events:

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Submissions Lodged:

• Inquiry into economic dynamism, competition and business

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Upcoming Submissions:

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Selected Media:

• ABC – Reserve Bank set for biggest overhaul in decades after review calls for more external leaders  
• AFR – Losses to scams pass $3b. Here’s how to beat the cheats 
• The Australian – May rate rise now ‘live’ after Reserve Bank says there’s still a strong case for further hikes 
• The Australian – NAB boss Ross McEwan braces for mortgage stress, $91bn fixed-rate roll over  
• AFR – Jim Chalmers rules out changes to bank levy

RBAScamsWeekly Update