Weekly Update: 21 June 2024

Highlights this week:

• Announcement: Treasurer Jim Chalmers announced reforms to promote greater competition on mortgages and deposits.
• In the media: RBA’s Ellis Connolly, Head of Payments Policy spoke about the Central Bank’s payments regulatory reform agenda.
• Key data: The RBA left the interest rate unchanged at 4.35 per cent.

Quote of the week:
“The payments landscape is very different to when surcharging was introduced. Many consumers have shifted from paying by cash to cards and there is increased public concern about payment surcharges. So, it is time to ask whether the surcharging framework is still fit for purpose and whether any changes need to be made.” 

– Ellis Connolly, RBA, Head of Payments Policy speaking the Merchant Risk Council Conference, Melbourne – 18 June 2024

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Parliamentary Update:

• The Treasurer announced a number of measures in response to two ACCC inquiries, including a regulatory review of competition across the mortgage lending landscape. Proposed changes include:
  • Notifying customers of interest rate changes
  • Better disclosure on financial product comparison websites
  • Direct access to forms for switching loans
  • Working with banks to improve how customers are notified about bonus interest rate offers
  • A Treasury investigation into encouraging customers to switch to cheaper loans.
• The Treasurer held a press conference following the RBA’s recent interest rate decision.
• Minister Julie Collins MP announced $23.3m to help small businesses adopt eInvoicing, reducing the risk of invoice scams and improving cash flow and productivity.
• Spillover sessions from Senate Estimates were held this week, including an appearance from the Australian Postal Corporation who were questioned by the Environment and Communications Legislation Committee.
• The Joint Select Committe on Social Media and Australian Society held its first hearings in Canberra today, hearing from key media corporations, ACCC, ACMA, and the Office of the eSafety Commissioner. Hearings will continue over the next two weeks.
• NSW Treasurer Daniel Mookhey delivered the 2024-25 Budget which focused on restraining the State’s spending profile, while gradually reducing the deficit over the outer years. Major measures centered around housing, health and cost of living pressures, while stabilising the State’s gross debt trajectory. There was more funding for cybercrime and scams, with the Government investing $205m for cyber security and $21.4m to build a NSW Digital ID.

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Policy Update:

The ABA:  

• met with RBA to discuss eConveyancing.
• met with APRA to discuss credit risk.
• attended the United States Studies Centre conference. 
• facilitated an update and Q&A session from Treasury and RBA on payments modernisation and the upcoming retail payments review.
• provided an action alert for its June meeting, where it confirmed it would release a revised version of the Australian Sustainability Reporting Standards with greater alignment to international standards.
• met with ACMA to discuss scam initiatives and insights from both organisations’ recent visits to Singapore.
• had a quarterly liaison meeting with AusPayNet.
• facilitated an update and Q&A session from Treasury and RBA on payments modernisation and the upcoming retail payments review.
• AASB provided an action alert for its June meeting, where it confirmed it would release a revised version of the Australian Sustainability Reporting Standards with greater alignment to international standards.

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Regulatory Update:

• RBA’s Ellis Connolly, Head of Payments Policy gave a speech on Online Retail Payments – Some Policy Issues at the Merchant Risk Council Conference.
• The RBA board left the cash rate unchanged at 4.35 per cent and released their Monetary Policy Decision statement.
• APRA released a new digital Prudential Handbook.
• ASIC commissioner Alan Kirkland gave a speech on Financial advice in a changing world.

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Economic Update:

• RBA’s May 2024 release of the Commodity Price Index showed a slight increase (1.2% to an index of 82.5) from the previous month.
• The overall trend of softening rural and non-rural commodity prices continued, with rural commodity prices remaining slightly lower than non-rural commodities. The index of base metal commodity prices is showing a slightly different trend, as prices continue to grow driven by demand for critical minerals.

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Communications and Media:

• The ABA marked World Elder Abuse Awareness Day by publishing the 2024 ‘Safe and Savvy’ guide as an important tool to help older Australians protect themselves from financial abuse.
• Anna Bligh held a doorstop in response to the Federal Government’s mortgage and deposits reforms. Transcript can be found here.

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Coming up next week:

Parliament/Regulators:  

• 24/6-4/7 Parliament sits (both houses)
• Key legislation on the agenda for next week:
  • House of Representatives
    • Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Capital Works (Build to Rent Misuse Tax)
    • Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Superannuation (Better Targeted Superannuation Concessions) Imposition (* Note for awareness, this is the PSRA Bill)
  • Senate
    • Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024
    • Treasury Laws Amendment (Consumer Data Right) Bill 2022
    • Help to Buy Bill 2023
• Upcoming Hearings:
  • 25/6, 28/6 – House of Representatives, Joint Select Committee, Social Media and Australian Society
• 28/6 – Parliamentary Joint Committee, Corporations and Financial Services (Financial Services Regulatory Framework in Relation to Financial Abuse)

Data announcements:  

• On 26 June the ABS releases the May Monthly Consumer Price Index
• On 27 June the ABS releases the May Job Vacancies and quarterly National Accounts: Finance and Wealth

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Upcoming Submissions:

Published submissions

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Selected Media:

• The Australian – Banks back reforms to savings, loans, competition in sector
• AFR – Bullock tiptoes through a political minefield
• ABC – Coles and Telstra loyalty point phishing scams are circulating. Here’s how to spot one
• SMH – ‘Uncertain’ times: Why the RBA’s interest rate decisions are getting harder
• AFR – RBA flags BNPL fee crackdown in broader probe into credit cards

Weekly Update