Weekly Update: 21 February 2025

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Highlights this week:

1. RBA cuts rates but remains ‘cautious on prospects for further policy easing’.
2. Anna Bligh joined NAB CEO Andrew Irvine for the Trans-Tasman Business Circle, with productivity, housing, interest rates and the economy all on the agenda.

Quote of the week:
“We have not pre-committed to any particular course of action on interest rates. But in the forecasts published this week, the central projection suggests that if monetary policy is eased too quickly or by too much, disinflation could stall and inflation would settle above the midpoint of the target range.”

–  RBA Governor, Michelle Bullock. Opening Statement to the House of Representatives Standing Committee on Economics, 21 February 2025.

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Media & Communications Update:

ABA CEO Anna Bligh appeared on Channel 7 Sunrise to discuss the RBA’s decision to cut rates, saying that with banks passing on the rate cut in full, this will be welcome news for borrowers after some tough economic times.

The ABA distributed the second edition of the Quarterly Data Bulletin, highlighting the latest trends regarding cash withdrawals, mobile wallet payments, and banks’ assistance for vulnerable customers.

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Parliamentary Update:

Shadow Treasurer Angus Taylor released Coalition policies on banking and financial services including:

• Changes to prudential settings, including the serviceability buffer and regulatory settings for mid-tier banks.
• Making the ACCC a permanent member of the Council of Financial Regulators.
• Simplifying Corporate Law and streamlining disclosure requirements for corporate bonds.

Treasurer Jim Chalmers made remarks following the RBA cash rate decision, saying: “This is the soft landing we have been planning for and preparing for but we know there’s more work to do.”

The Treasurer and Housing Minister Clare O’Neil announced that the federal government will ban foreign investors from buying established homes for at least two years and crack down on foreign land banking.

In an opinion piece on banking and ESG, the AFR’s John Kehoe reported that:

• “The Coalition is developing a debanking policy that could be rolled out before the election.”
• “Other policy options open to a potential future Coalition government include using moral suasion to have the banks temper their ESG policies and inserting expectations into a banking code of conduct.”

The House Economics Committee released its annual report into Australia’s four major banks, raising concerns about changes to remuneration practices.

RBA Governor Michelle Bullock appeared at the House of Representatives Economics Committee this morning and updated the Committee on cash distribution in her opening statement: “Although there has been progress, there is still considerable work to be done to establish a model for cash distribution that is sustainable.”

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Policy Update:

The ABA met with AUSTRAC regarding implementation timeline for AML/CTF reforms.

ABA Policy teams attended the Fraud and Financial Crime Conference in Sydney.

The ABA also attended the first meeting for the Northern Territory Financial Institutions Working Group for the implementation of eConveyancing.

Submission to Treasury on Positioning Australia’s financial reporting system for the future.

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Economic Update:

The unemployment rate rose 0.1% to 4.1% in January. Yet, the participation rate increased to a new record of 67.3% as the number of people employed rose by 44,000.

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Regulatory Update:

ACCC Chair Gina Cass-Gottlieb gave a speech on ACCC’s 2025-26 priorities at a Committee for Economic Development of Australia event.

APRA began consultation on proposed changes to the treatment of HELP debts.

The RBA issued the February Statement on Monetary Policy & updated its chart pack on the Australian economy and financial markets.

APRA announced the rescinding of the information paper on cloud outsourcing and cessation of ad hoc credit reporting collection.

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Coming up next week:

Data:

• 26/02 – Monthly Consumer Price Index

Parliament:

• Senate Estimates

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Upcoming Submissions:

Published submissions

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Upcoming Events:

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Selected Media:

• The Australian – NAB CEO Andrew Irvine calls for more homes, lift in productivity
• AFR – Inside the rate call that left RBA watchers puzzled
• SMH – Bullock follows rate cut with a bucket of cold water
• The Australian – Cap rates for new home buyers: biggest builders and property owners launch pre-election push
• AFR – Red tape slashed for home loans, markets and insurance under Coalition
• AFR – Larry Fink says 30-year fixed rate mortgages could change Australia

Warm regards,
The ABA Team

Weekly Update