Weekly Update: 1 August 2025

---

Highlights this week:

• The Productivity Commission interim report has recommended cutting the company tax rate to 20% for firms with turnover below $1 billion and overlaying a 5% “net cash-flow tax” on all companies – a package the Commission concedes would leave the largest ~500 firms, including all banks with a turnover above $1 billion, paying more overall.
  • The BCA has issued a joint statement on behalf of 24 industry groups saying the proposal punishes our most productive parts of the economy. 
  • The ABA will examine this proposal further but would be concerned by any measure that risks increasing costs for consumers.

Quote of the week:
“While some businesses may benefit under this proposal, it risks all Australian consumers and businesses paying more for the things they buy every day—groceries, fuel and other daily essentials.“

–  Joint Group of Industry Organisations

---

Media & Communications Update:

• CEO Anna Bligh appeared on ABC Radio Perth to discuss access to credit cards for older Australians.

---

Parliamentary Update:

• The Government introduced into the House of Representatives the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 to update the Payment Systems (Regulation) Act. 
  • The Bill broadens the definitions of “payment system” and “participant” so the RBA can regulate digital wallets and BNPL providers. 
  • It also establishes a new ministerial designation power to bring nationally significant services or platforms under additional oversight.  
• Both Houses sat from 28 to 31 July.
  • The Pacific Banking Guarantee Bill 2025 passed the House of Representatives and is now before the Senate. 
  • The Universities Accord (Cutting Student Debt by 20%) Bill 2025 passed both Houses. 
• The House of Representatives Economics Committee membership is as follows:
  • Ed Husic (Chair)
  • Simon Kennedy (Deputy Chair)
  • Julie-Ann Campbell
  • Matt Gregg
  • Madonna Jarrett
  • Jerome Laxale
  • Henry Pike
  • Sally Sitou
  • Allegra Spender
  • Aaron Violi
• Senate Economics Committee membership is as follows:
  • Lisa Darmanin (Chair)
  • Jane Hume (Deputy Chair)
  • Matthew Canavan
  • Nick McKim
  • Deborah O’Neill
  • Charlotte Walker
• Australia dodged the latest round of US tariff hikes: President Trump’s new executive order left Australia off the list of countries facing higher “reciprocal” duties, so Australian exports to the US will continue to face the baseline 10% rate.

---

Policy Update:

• The ABA made a submission to Treasury’s targeted consultation on the expansion of the Home Guarantee Scheme. 
• The ABA hosted a roundtable with APRA for members on the Board delegation aspect of APRA’s proposed governance reforms. 

---

Economic Update

The ABS released the June quarter CPI this week, showing headline inflation rose 0.7% over the quarter and 2.1% annually, slightly below consensus forecasts of 2.2%. 

Key contributors to the quarterly rise included Housing (+1.2%), Food and non-alcoholic beverages (+1.0%), and Health (+1.5%). Partially offsetting the rise was a fall in Transport (-0.7%). 

---

Regulatory Update

• Treasury has released a consultation paper regarding the special levy for the Compensation Scheme of Last Resort.
• ASIC commenced Federal Court proceedings against payday lender CashnGo, alleging unconscionable debt-recovery practices – including using CDR data to monitor customers’ bank accounts hourly and make unscheduled withdrawals outside agreed repayment schedules.
  • CashnGo operates as a CDR representative (accessing data through an accredited data recipient rather than being directly accredited), highlighting oversight questions as Treasury considers CDR changes to boost uptake.
  • ASIC alleges the practices left customers overdrawn or without sufficient funds for essentials, underscoring ABA’s longstanding concern that CDR can be weaponised for financial abuse if misused. 
• APRA is consulting on a simpler bank-licensing framework – proposing explicit criteria instead of guideline expectations, a 12-month window for applicants followed by a three-month (published) decision target, and a review of the RADI pathway – with submissions due by 31 October 2025. 
• APRA will keep its macroprudential policy settings steady following its latest review of domestic and international financial conditions and risks, confirming that:
  • The mortgage serviceability buffer will remain at 3 percentage points; and
  • The countercyclical capital buffer stays at its default level of 1 per cent of risk-weighted assets.
• ASIC released its latest bank-fee review, Report 811 Better and beyond: Expanding better banking outcomes to more low-income Australians, detailing banks’ responses to excessive fees charged on transaction accounts.  
• AFCA has received more than 100,000 complaints for the second year in a row in 2024-25, despite a 4% decline in complaints overall. Highest complaint increases were reported in the Investments and Advice sector (up 18%) and the General Insurance sector (up 17%). 
• APRA released the Monthly Authorised Deposit-taking Institution Statistics (MADIS) for June 2025. 

---

Coming up next week:

• Politics:
  • 05/08 – Treasury consultation on ‘foreign bail-in bonds’ closes.
  • 07/08 – Submissions close on Senate Econ Legislation inquiry into the Pacific Banking Guarantee Bill
  Data:
  • 05/08: Monthly Household Spending Indicator (ABS)
  • 07/08: International Trade in Goods (ABS)
  • 08/08: Monthly Business Turnover Indicator (ABS) 

---

Upcoming Submissions:

Published submissions

---

Events

---

Reports

---

Selected Media

• The Adviser – APRA proposes changes to bank licensing framework 
• AFR – ‘Gotcha’ regulators are hurting economy 
• Reuters – Australia Q2 inflation surprises on low side, heralds rate cut 

Warm regards,
The ABA Team

Weekly Update