Weekly Update: 15 August 2025

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Key News:

• The RBA Board unanimously decided to lower the cash rate target by 25 basis points to 3.60% on 12 August.
  • With underlying inflation within the 2–3% range, and labour market conditions easing slightly, the Board determined that a further easing of monetary policy was appropriate. 
  • However, the Board remains cautious about the outlook, particularly given the heightened uncertainty around both aggregate demand and potential supply. 

Quote of the week:
“The industry effectively still has one foot in the old world of banking and one foot in the new world. At some point, the weight of their customer behaviour and the customer shift is going to require them to put both feet in the new world. And it’s very hard to predict what date that’s going to happen.”

–  Anna Bligh, ABA CEO

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Media & Communications Update:

• Anna Bligh, outgoing ABA CEO, reflected on her tenure in interviews with the AFR, The Australian, The Sydney Morning Herald and Sky News.
  • SMH – How bank branches can avoid the fate of video stores
  • AFR – ‘I had a mandate to shake the joint up,’ says Anna Bligh
  • Further articles will be released in the coming days.
• Anna also appeared on ABC’s 7.30 to discuss regional banking.

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Political Update:

• A leaked “outcomes” paper for Labor’s Productivity Roundtable circulated on Wednesday suggested measures such as pausing parts of the National Construction Code to cut building costs and accelerating approvals via an AI plan; the government said no decisions had been made and denied that the event is pre-cooked.
  • The Prime Minister reiterated that ideas like a four-day work week are off the table as the roundtable approaches, while keeping the door open to productivity measures rather than major new tax changes. 
• The Senate Economics Legislation Committee held a hearing on the Pacific Banking Guarantee Bill.
  • Discussion focused on Bank South Pacific’s complaints that the guarantee would disadvantage local banks. 
  • BSP urged broader eligibility, a tighter scheme, and a transparent consultation process.
  • Government senators, Treasury and bank representatives argued that the design is non-distorting and is needed to maintain banking access in the Pacific.
• Pat Conaghan, Shadow Minister for Financial Services, called the Government’s welcoming of eight of nine recommendations from the Review into Small and Medium-Sized Banks “a step in the right direction.”
  • He added that, while cutting red tape helps, more is needed to keep regional banking accessible.

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Policy Update:

• The ABA participated in an Agriculture Productivity Roundtable that was hosted by Minister Julie Collins, and attended by a range of stakeholders including producers, processors, importers, exporters, R&D representatives, unions, and other business representatives.
  • Discussion focused primarily on cutting red tape and regulation in the agricultural sector.
• The ABA met with industry representatives from banking, telecommunications companies and social media platforms to discuss alignment on data sharing opportunities under the Scam Prevention Framework. 
• The ABA met with NSW Police to discuss proposed Witness Protection regulations. 
• The ABA hosted the new OECD Ambassador, Stephen Jones, in a roundtable forum to discuss areas of alignment.

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Economic Update

• The Wage Price Index (WPI) rose 0.8% in the June quarter 2025 (lower than the 0.9% rise in the March quarter 2025) and 3.4% annually. 
• Quarterly private sector wages rose 0.8% in June 2025, while public sector wages rose 1.0%. However, both sectors had lower annual wage growth compared to the June quarter 2024.
  • Wages in the private sector grew 3.4% over the previous 12 months, lower than the 4.1% growth recorded in the year to June 2024.  
  • Annual public sector wage growth was at 3.7% this quarter compared to 3.9% at the same time last year. 

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Regulatory Update

• The RBA also released a discussion paper titled ‘How Costly are Mark-ups in Australia?
  • The paper estimates how much higher Australian productivity and GDP would be if competition had stayed at mid-2000s levels, improving resource allocation across firms.

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Coming up next week:

• Politics:
  • 19/08-21/08 – Economic Reform Roundtable
• Data:
  • 20/08 – Monthly Employee Earnings Indicator (ABS) 

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Upcoming Submissions:

Published submissions

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Events

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Reports

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Selected Media

• AFR – Why Australia is $3000 poorer per person, according to RBA economists
• AFR – Government to freeze housing code as part of red tape blitz
• AFR – No ‘talkfest’: The one idea summit guests already agree on
• The Australian – Business cries: get us out of this $110bn red-tape tangle
• The Australian – Four-day week ‘thought bubble’ not on the cards, says Labor
• Daily Mail – Albo’s radical plan for cash as fewer Aussies pay with banknotes

Warm regards,
The ABA Team

Weekly Update