Weekly Update: 26 June 2026 

---

Key News:

• The RBA commenced its Review of Payments System Regulation. The ABA welcomed this, saying “We welcome the Reserve Bank of Australia’s commencement of a broad sweeping review, especially the consideration of digital wallet access, three-party schemes and how the payments system can better protect Australians.”
• The Council of Financial Regulators released their quarterly statement warning of an elevated risk environment due to geopolitical tensions and frontier AI models.
• The Coalition has established a Senate inquiry into the management of and plans for Australia Post’s retail network.

“Every dollar of bank profits that gets reinvested into bank capital, generates on the analysis we showed this week, $4.70 of economic activity across the Australian economy.”

ABA CEO Simon Birmingham. Interview with Ross Greenwood, 21 June.

---

Media & Communications Update:

• ABA provided a statement to Newscorp on the buying and selling of bank accounts: “There’s nothing innocent about renting or selling your bank account details to anyone. If you handover control of your bank account you’re likely to get tangled up in serious criminal activity and help organised crime to steal other people’s money.”
• ABA CEO Simon Birmingham spoke with Sky Business Weekend’s Ross Greenwood on the economic contribution of banks.

---

Political Update:

• The RBA’s consultation paper on its Review of Payments System Regulation is seeking feedback on:
  • merchant choice of payment methods and payment providers; mobile wallets, non-designated card payment systems and buy now, pay later; A2A payments; cryptography and overseas card payment fraud; any other issues that may have implications for the design and implementation of the RBA’s payments system regulation.
• The New South Wales budget was released on Tuesday, leading with cost-of-living relief and posting a $2.3 billion deficit. Major spending commitments focus on healthcare, education and transport.
  • “This Budget is about building a state working Australians can afford. One where we deliver on people’s priorities through relief and reform.” – Daniel Mookhey, Treasurer
• The Queensland budget was also released on Tuesday. It was framed as a “foundation for a fresh start” through “challenging” circumstances, emphasising safety, health, cost-of-living support and infrastructure ahead of the 2032 Brisbane Olympics.
  • The books show a deficit of $8.84 billion in 2025-26, improving to a $6.1 billion deficit in 2026-27, with a return to a $619 million surplus projected by 2029-30.
• During Monday’s Question Time, Helen Haines asked the Treasurer whether he would commit to tabling the government’s response to the report on regional branch closures in regional Australia.
  • Treasurer Chalmers recounted the government’s “significant steps” in this area, including the moratorium, increased investment in Bank@Post, the cash acceptance mandate, and the cash distribution regulatory framework.
  • “When it comes to regional banking, we do have more work to do there. We’ve been up front about that. I acknowledge Simon Birmingham and others who have been working very closely on that, and we hope to make some more progress before long. We’ve also been working with the regulators and with communities to try to find sustainable solutions here.” – Jim Chalmers, Treasurer.
• The Government released its response to the Senate Rural and Regional Affairs and Transport Committee report, Bank closures in regional Australia. The response mostly noted the report’s recommendations, agreeing ‘in principle’ to only two:
  • Recommendation 5: that the Government commission the ACCC to explore the barriers to customers switching banks, with a view to allowing those that open and/or maintain branches in regional, rural and remote towns to attract more business.
  • Recommendation 7: that the Australian Government works closely with the banks and Australia Post, to require all major banks to have agreements with Bank@Post and to harmonise the terms of Bank@Post agreements to improve fairness and sustainability.
• Zali Steggall and Allegra Spender have lodged an application with the Australian Electoral Commission to register the newly announced Community Strong Australia as a political party.

---

Economic Update:

• Headline CPI softened to 4.0%, while core inflation climbed to 3.6% from 3.4%.
• The unemployment rate fell slightly to 4.4% as 40,300 jobs were added.
• National Accounts data released this week shows that the value of deposits banks hold with the Reserve Bank of Australia (RBA) has more than halved since the introduction of the Term Funding Facility (TFF) during COVID-19.
• The value of bank deposits at the central bank is now $174.5 billion, down from a peak of $453.5 billion in December 2022.

---

Regulatory Update

• APRA member Therese McCarthy-Hockey addressed the AFIA Risk Summit, outlining vulnerabilities that can result from increasingly sophisticated AI. She encouraged financial services entities to share early insights about potential harms with peers in order to make the whole financial system resilient against potential harms.
• ASIC Commissioner Kate O’Rourke also addressed the AFIA Risk Summit on the topic of productivity, outlining how ASIC is contributing to increasing Australia’s productivity.
• APRA published Deputy Chair Margaret Cole’s farewell remarks at a Conexus boardroom lunch.

---

Upcoming Submissions

---

Selected Media

• AFR – AI arms race is coming for Australia’s banks
• ABC – Greens back CGT, negative gearing changes in return for extended NDIS inquiry, end to super loophole
• The Conversation – Underlying inflation is still too high, keeping another interest rate hike on the table
• ABC – The fake ABC News articles trying to sell you a scam
• AFR – Banks and super funds must prepare for ‘grey zone’ war

Warm regards,
The ABA Team

Weekly Update