Weekly Update: 13 September 2024

Highlights this week:

• In the Media: The ABA welcomes the release of draft legislation to establish mandatory industry scams codes.
• Announcement: APRA announced proposed changes to the use of AT1 capital instruments.
• Key Data: Non-performing mortgages trended up to over 1%.

Quote of the week:
“…yes, there needs to be liability not only for our banks but for our telecommunications companies and social media platforms as well. The business that would have the most to gain through making the banks always pay is Meta…Meta are making up between $5 billion and $6 billion here every year in Australia… Let’s ensure we have a robust framework that puts obligations in place on banks, on telecommunications companies, on social media platforms, and let’s ensure that we do it in a way that stands up for our sovereignty.”

– Assistant Treasurer and Minister for Financial Services, Stephen Jones. Speech to the House on scams, Wednesday 11 September. 

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Media & Communications Update:

• The ABA released a statement welcoming the announcement of draft legislation to establish a Scam Prevention Framework and Anna Bligh did a number of radio and TV interviews including the ABC, Channel Nine and 2GB Radio.
• The ABA provided a response to The Australian, AFR, & Financial Times on APRA’s proposed changes to the use of AT1 capital instruments saying “banks will now carefully consider the implications of the proposal, balancing any changes to costs of capital, as well as impacts on capital markets and investors.” 
• The ABA provided comments to The Australian on the Government’s first tranche of privacy reforms saying this “is an important first step in uplifting the Privacy Act and ensuring protections for consumers are fit-for-purpose in this modern digital world.”
• The ABA’s Scam Awareness Campaign moves into its final week:

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Policy Update:

• ABA CEO Anna Bligh met with COBA & the ICA.
• The ABA met with:
  • APRA regarding the release of AT1.
  • The Tasmanian LTO to discuss the ongoing implementation of eConveyancing.

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Regulatory Update:

• ASIC published its enforcement and regulatory update stating their intent to target misconduct in the banking sector.
• ACCC authorised the ABA led collaboration to support Cash-in-transit services.
• Sarah Hunter, RBA Assistant Governor (Economic) gave a speech on understanding the journey to full employment.
• APRA issued a proposed update to bank capital framework to strengthen crisis preparedness by removing AT1 capital instruments.

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Parliamentary Update:

• The ABA spent Tuesday and Wednesday in Canberra meeting with MPs to discuss key, evolving industry issues as we near the final sitting weeks of the 47th Parliament.
• The Assistant Treasurer released landmark draft legislation to establish a new Scam Prevention Framework to better protect Australians from scammers. The Exposure Draft can be viewed here.
• The Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024. The Bill and Explanatory Statement can be viewed here.
• The Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 passed the House of Representatives and will be debated in the Senate (likely) next week.
• The Attorney-General introduced legislation to strengthen privacy protections for Australians. The Bill and Explanatory Statement can be viewed here.
• The Minister for Communications introduced legislation to give the Australian Communications and Media Authority new powers to hold digital platforms to account and combat harmful misinformation and disinformation. The Bill and Explanatory Statement can be viewed here.

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Economic Update:

APRA Quarterly ADI Statistics showed that:

• In the past year banks in Australia paid $218bn in interest to customers, the most ever paid, including $135bn to deposit holders.

• Non-performing mortgages with banks (those more than 90 days past due) have trended up to over 1% for the first time since the March 2021 quarter, while loans in arrears remained steady at 0.66%.

Loans Past Due, % of total outstanding credit, Banks in Australia, March 2019 – June 2024

• Owner-occupiers have a higher rate of non-performing loans than investors, with 1.1% of loans non-performing compared to 0.86% for investors.
• Repossessions have remained low, at 0.012% of all mortgages, more than a third of the proportion seen in 2019 (0.039%).

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Coming up next week:

Parliament/Regulators:  

• Only the Senate is sitting.
• 20/09 Senate Select Committee, Impact of Climate Risk on Insurance (Sydney, NSW).

Data announcements: 

• 19/09 – Labour Force, Australia.

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Upcoming Submissions:

Published submissions

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Upcoming Events:

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Selected Media:

• News.com.au – Facebook, banks to face huge fines if they turn a blind eye to scams
• The Australian – Personal insolvencies set to soar as renters buckle under debt: AFSA
• SMH – Chalmers eyes Greens lifeline for Reserve Bank overhaulAFR – Why APRA will kill off bank hybrids for good
• The Guardian – Despite all the doom and gloom on Australia’s economy, could the worst be behind us?

Weekly Update