Weekly Update: 2 June 2023

“The economy likely reached a cyclical peak in the September quarter last year, and is now transitioning to a more balanced position between supply and demand.”  

Dr Steven Kennedy PSM, Secretary to the Australian Treasury

Feature

• ABA CEO Anna Bligh spoke at the International Banking Summit 2023 in Brussels this week, part of a panel discussing the topic of ‘digital finance: how will banks fit in the world as we will know it?’
• The International Banking Summit 2023 brought together a combined in-person and online audience of more than 450 policymakers, experts, and representatives from banks and international financial institutions.

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Parliamentary Update:

• The Senate Economics Legislation Committee provided their report on the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 [Provisions] regarding franking credits. 
• Mark McGowan announced his resignation as Premier of Western Australia.  McGowan told a news conference in Perth on Monday he “loved the role…But the truth is I’m tired, extremely tired – in fact I’m exhausted. The role of political leadership doesn’t stop, it’s relentless.” 
• Following deliberations in WA Labor current Deputy Premier and Member for Kwinana, Roger Cook, is set to become the next WA Premier.  
• Legislation to establish the referendum on enshrining an Indigenous Voice to Parliament in the constitution passed the House of Representatives. The bill now heads to the Senate.  
• Senate Estimates took place over the past two weeks, with economics portfolio sessions occurring on Tuesday and Wednesday. Key themes were inflation expectations and PwC’s use of confidential information. Opening statements from the heads of Treasury, APRA, and the ATO are available here.  
• Minister for Communications, Michelle Rowland, announced that thousands of Australians living in regional and rural Australia can order uncapped satellite broadband services, following a successful trial of NBN Co’s new Sky Muster Plus product to boost internet speeds in the bush. 
• The following Federal Assistant Ministers were sworn into changed portfolio responsibilities:
  • Dr Andrew Leigh MP – adds Parliamentary Secretary to the Minister for Employment and Workplace Relations.  
  • Senator Anthony Chisholm – adds Parliamentary Secretary to the Minister for Infrastructure, Transport, Regional Development and Local Government, and  
  • Patrick Gorman MP – adds Parliamentary Secretary to the Minister for the Public Service. 

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Policy Update:

• The ABA attended Suncorp’s Consumer Advocate Day, an event designed for the industry to listen, learn and share thoughts and insights on issues important to customers and communities. 
• ABA continued consultations with regulators and community groups on the development of Scams Standards. 
• ANZ hosted a peak bodies meeting with ABA in attendance. Mardi McBrien, the Director Strategic Affairs at the IFRS Foundation, led the meeting. Mardi addressed the group on the work of the ISSB, noting the forthcoming final S1 and S2 standards and the consultation to determine the forward workplan of the International Sustainability Standards Board.
• ABA facilitated discussions with the Data Standards Board on appropriate CDR capacity planning models. Objective data provided from member banks demonstrated that the proposed thresholds were significantly higher than required. The DSB accepted this evidence and revised the proposed thresholds. 

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Regulatory Update:

• The Reserve Bank of Australia (RBA) and Australian Prudential Regulation Authority (APRA) appeared at a House of Representatives Standing Committee on Economics public hearing. A transcript of the hearing will be made available at a later date by Hansard. 
• ASIC was scheduled to appear before the same committee, however, their attendance was deferred due to extended hearings of other departments. The rescheduled date is yet to be determined. 
• APRA will release a new data publication next week which provides detailed information on ADI specific capital / RWA / liquidity holdings. 
• RBA will undertake a comprehensive review of the operating environment of payments infrastructure. 
• ASIC announced a partnership with Eastern Analytics, a regtech company, to develop a proof of concept project to help identify and assess poor market disclosure by listed companies. 

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Economic Update:

• The ABS estimated that inflation for the year to April 2023 was 6.8 per cent.  
• The minimum wage has been lifted by 5.75 per cent, with minimum wage workers receiving approximately $22.61 per hour ($859.32 p/w), up from $21.38 ($812.60 p/w) from July 1. 
• Household deposits held by ADIs increased for the 23rd month in a row, to $1.372 trillion. 
• Commodity prices have moderated over the past 12 months, after a rapid increase between early 2021 and 2022. Rural commodity prices had been falling at a faster rate, while non-rural commodity prices have recently caught up. The non-rural commodity price decrease has been driven by drops in the prices of coking and thermal coal, iron ore and liquified natural gas. 

Commodity prices, Rural and Non-rural, July 1982 – May 2022, Index (SDR) 

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Upcoming Events:

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Submissions Lodged:

• APRA IRRBB APS 117 workshop feedback 
• ACCC Retail deposits inquiry 
• Response to ACCC deliberations on Aggregator Assurance Program 

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Upcoming Submissions:

Published submissions

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Selected Media:

• SMH – Is the age of bumper home loan cashbacks at an end?  
• The Australian – Buyers ‘stuck in mortgage prison’ 
• Warning on Reserve Bank power over interest rates   

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