Weekly Update: 16.09.22

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“This lift in inflation has come as a surprise. A year ago, the RBA was forecasting that inflation over 2022 would be just 1¾%. Now, we are expecting CPI inflation this year to be around 7¾%. This is a very big change and a very large forecast miss.”

– RBA Governor Philip Lowe, Speech to Anika Foundation, 8 Sep 2022

Parliamentary Update:

• RBA Governor Lowe appeared before the House of Representatives Economics Committee, the first public meeting of the Committee in this Parliament.
• The Prime Minister announced that National Cabinet had agreed to extend the pandemic leave disaster payment beyond the 30th of September. It will remain available for as long as mandatory isolation periods are applied by all states and territories.
• A revised Parliamentary sitting calendar has been issued to allow for a period of mourning for Queen Elizabeth II. 
• The Review of the Reserve Bank of Australia released an Issues Paper which poses key questions about the RBA’s monetary policy objectives, performance, governance and culture. Submissions close 31 October, 2022.
• Assistant Treasurer Stephen Jones released the Financial Accountability Regime Minister rules 2022 for public consultation. Consultations close October 7, 2022.

Communications Update:

• The ABA attended the Australian Information Industry Association (AIIA) event at Parliament House on Wednesday on the transition to a net-zero economy. ABA CEO Anna Bligh spoke at ‘The impact of the green economy on jobs and business’ panel: “Progress towards a digital economy and steps to decarbonisation are deeply integrated, banks are playing an important role in this transition”.
• The latest New Payments Platform podcast NPP Soundbites features ABA Chief of Policy & Strategy Christine Cupitt, discussing scams and the role of PayID in protecting bank customers.

Policy Update:

• The ABA held a workshop with Treasury on the Help to Buy scheme. The Government is seeking bank feedback on design and governance for a roll out in the early part of 2023.
• The ABA facilitated a briefing from Good Shepherd on its Financial Independence Hub (FIH). The FIH has already supported over 1,000 survivors of financial abuse.
• The ABA invited Norton Rose Fulbright to brief members on the potential impacts of Chinese Personal Information laws. China recently fined rideshare platform Didi Global $1.7 billion for violations.
• The ABA and ABA members attended the Government’s cross-industry Taskforce on Nature-related Financial Disclosures (TNFD) summit. It provided an overview of the current beta v.02 framework and details on the future of the framework.

Regulatory Update:

• The RBA released its Bulletin for September 2022. Subjects covered:
  • The Current Climate for Small Business Finance
  • The Cost of Card Payments for Merchants
  • Trends in Australian Banks’ Bond Issuance
  • Sentiment, Uncertainty and Households’ Inflation Expectations
  • Evolving Financial Stress in China’s Property Development Sector
• APRA released an information paper for a multi-year program to modernise the architecture of prudential standards and guidance. Key focus points are improving the prudential standards framework, adopting a digital-first approach, and adapting to the rise of cryptocurrencies.

Economic Update:

• The World Bank says worldwide bank account ownership is now 76%. COVID-19 boosted the adoption of digital financial services: more than a third of adults in developing economies paid a utility bill from a bank account for the first time after the start of the pandemic.
• Business confidence remains elevated. Confidence reached +10 index points, business conditions rose to +20 index points. This most recent survey showed no signs that the strong conditions of recent months are moderating.
• Consumer sentiment remains at near historic lows, despite seeing a small uptick in the August data, the first since November 2021.
• Unemployment rose to 3.5% in August 2022. The underutilisation rate remained at 9.4%. “The number of people working reduced hours due to being sick remained elevated in August, at around 760,000 people. This is around double the number we typically see at the end of winter,” said Lauren Ford, ABS head of labour statistics.
• The ABS also noted that a record number of people (900,000) had multiple jobs in the June quarter, 6.5% of all employed people. The number of filled jobs also reached a record high of just under 15 million, up 2.2%. At the same time, job vacancies rose by 14.3% to 480,000, more than double the number before the start of the pandemic.

16 SeptemberWeekly Update