Weekly Update: 25th Aug 2023

“Consumers are marching with their feet – or rather, not marching – but “tap and go”-ing. A Reserve Bank report found only 13 per cent of transactions in 2022 were made in cash, with older Australians abandoning notes and coins at the fastest rate.” 

– APRA Member Therese McCarthy Hockey, speech at GRC2023, 23 August 2023

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Parliamentary Update:

• The Intergenerational Report was released on Thursday, with the Treasurer making a key speech at the National Press Club.  
• The Treasurer announced the launch of a Competition Taskforce established by Treasury to conduct a review of competition policy settings.
  • The Taskforce will be supported by a panel with members including the CEO of the Grattan Institute Daniel Wood, and former Chair of the ACCC Rod Sims.  
  • Assistant Treasurer Andrew Leigh, who will oversee the task force alongside Dr Chalmers, said the dominance of only a few big players across a range of industries risks depressing innovation and competition to the detriment of productivity and consumers. 
• The Treasurer took part in a Superannuation roundtable and said he would issue a discussion paper in coming weeks canvassing problems with financial advice, customer service and retirement income strategies after APRA and ASIC previously said many funds were failing to provide sufficient support to their customers. 
• The Prime Minister confirmed that the date of The Voice referendum will be revealed next Wednesday.  
• The Senate Select Committee on the Cost of Living held hearings in South Australia and the Northern Territory across the week.  
• The Senate Economics References Committee held hearings into the influence of international digital platforms. Meta Platforms were asked about their anti-scams activities.  
• The Senate Economics Committee held hearings on ASIC’s investigation and enforcement powers with selected consumers and former Chair James Shipton.

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Policy Update:

• The Bank for International Settlements (BIS) released a research paper titled: ’Financial stability risks from cryptoassets in emerging market economies’.  
• The BIS also released a report on ‘the need for central counterparties to have adequate resources and appropriate tools to address non-default losses’.  
• The ABA:
  • Attended the offices of the ATO for a quarterly Working Group meeting, at which the ATO presented their Banking and Finance Strategy for 2023-24. The meeting was attended by Heads of Tax from member banks. 
  • Attended a quarterly liaison meeting with the Reserve Bank Payments Policy Department. The meeting discussed payments regulatory reform and the importance of securing Australia’s payments systems against fraud and scams. 
  • Held discussions with Treasury on the Government and industry’s approach to the retirement of legacy payment systems, in accordance with the Government’s Strategic Plan for the Payments System  
  • Presented to several consumer groups on scams. 
  • Met with senior representatives from Visa to discuss payments industry development and fraud monitoring in payments.  

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Regulatory Update:

• The Treasurer announced three new Australian Securities and Investments Commission (ASIC) Commissioners and ASIC confirmed several executive changes within its senior leadership team.  
• The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) released a report on the findings from a joint research project involving industry that explored potential use cases for a central bank digital currency (CBDC) in Australia. 
• The Australian Securities and Investments Commission (ASIC) confirmed several executive changes within its senior leadership team. 
• APRA Member Therese McCarthy Hockey delivered a speech at GRC2023 on the topic of ‘From fires to firewalls: The evolution of operational risk’.  
• The Full Federal Court dismissed ASIC’s appeal against an earlier Federal Court decision to dismiss ASIC’s case against the Commonwealth Bank of Australia (CBA) and Colonial First State Investments Limited (Colonial) for allegedly breaching conflicted remuneration laws.

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Economic Update:

• The Intergenerational Report projects that by 2062-63:
  • participation rate to decline gradually from 66.6 per cent to 63.8 per cent and average hours worked to decline slightly 
  • productivity to grow at 1.2 per cent a year. “The future path of productivity is not a foregone conclusion and will be influenced by decisions taken by governments, businesses, and investors, and the big shifts underway in the global and domestic economy.” 
  • the economy will be around two and a half times larger and real incomes around 50 per cent higher 
  • the population to reach 40.5 million 
• As of June 30, 2023 there were 2.59 million businesses in Australia, up from 2.57 in June 2022 – a growth of nearly 20k, or 0.8%, Table 1. There are fewer employing businesses and more non-employing businesses, but this contraction has taken place among micro-businesses which employ 1-4 people, rather than businesses with larger numbers of employees.

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Communications and Media:

• The ABA provided comments for an article in the Courier Mail about data from the Australian Financial Crimes Exchange (AFCX) that found almost half of crypto funds are being channelled to cryptocurrency. Read the full article here: Scammers diverting nearly half of stolen cash to crypto, as banks call for increased security The piece was syndicated across News Ltd outlets. 

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Upcoming Submissions:

Published submissions

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Selected Media:

• ABC – Kimberley roundtable brings banks, community members together to tackle tyranny of distance  
• The Australian – Inflation ‘hurt’ to continue but no recession: NAB CEO  
• AFR – Labor to consider unionists for RBA board 
• SMH – ‘Two-speed economy’: Bank bosses flag consumer weakness  

Weekly Update