Weekly Update: 22.11.2022

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“The evidence shows that economies work better with low inflation and that once inflation becomes entrenched, it is very costly to stamp it out. It is for these reasons that the Reserve Bank Board is resolute in its determination to return inflation to target and we will do what is necessary to achieve that.”

RBA Governor Philip Lowe, CEDA Annual Dinner, Melbourne, 22 November

Parliamentary Update:

• The Federal Government focussed their attention on advancing two key legislation packages before the end of the year: the IR Secure Jobs, Better Pay bill, and the National Anti-Corruption Commission bill. Both Bills passed the House and go to Senate next week, the final sitting week of the year.
• The Senate has added two extra sitting days, this and next Friday, as the government seeks to get its industrial relations reforms passed by Christmas.
• Assistant Treasurer Stephen Jones released a BNPL Issues Paper, inviting submissions on BNPL regulation, with submissions due 23 December.
• The Treasurer delivered a key address to the Australian Critical Minerals Summit in Sydney, stating that “Critical minerals could be the opportunity of the century.”
• Housing Minister Julie Collins announced that one thousand regional Australians have taken advantage of the Albanese Government’s Regional First Home Buyer Guarantee since its launch on 1 October.

Policy Update:

• The ABA’s economic policy team attended an event with the RBA review panel (Professor Renee Fry-McKibbin, Professor Carolyn Wilkins and Dr Gordon de Brouwer) where they provided an update on the RBA review:
  • The panel has received 114 submissions, conducted a dozen focus groups, interviewed more than 230 people and surveyed almost 1,100 current and former RBA staff members.
  • The panel indicated that they are giving deep consideration to the RBA’s Governance Frameworks, including the merits of having two specialist boards, one focused on governance and the other focused on monetary policy decisions.
• The ABA hosted a small business roundtable connecting ABA members with the Council of Small Business Organisations Australia (COSBOA), and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). Presentations included an economic update by ANZ, an update on how small businesses can protect themselves from scams by the Joint Cyber Security Centre, and treatment of ATO debt by the Deputy Commissioner of ATO – Lodge and Pay.
• The ABA’s customer policy team hosted a workshop with Catherine Fitzpatrick and Rebecca Glen from the Centre for Women’s Economic Safety on a new paper discussing safety by design in banking, Designed to Disrupt.

• The ABA’s customer policy team met with South Eastern Community Links, who have released videos to support people who may be experiencing financial abuse:
  • The first video features Sevema, who has taken the courageous step of sharing how financial abuse impacted her life. 
  • The second video features financial counsellors explaining financial abuse and steps that financial services organisations can take to prevent perpetrators using their products and services to financially abuse their partner.

Regulatory Update:

• The RBA has announced the results of its Payment System Board meeting on 24 November. Issues discussed include: the RBA’s 12 October technology outage, the ASX’s CHESS replacement project, cyber resilience, least cost routing, and research on central bank digital currency (CBDC).
• ASIC has released an API for submitting reportable situations for large financial service providers with a high-volume of reportable situations. Australian Financial Service and Credit licensees are now able to submit reportable situation notifications via ASIC’s regulatory portal, replacing the need to manually upload reports one at a time 
• RBA Governor Philip Lowe gave a speech at the annual CEDA Dinner – Price Stability, the Supply Side and Prosperity, emphasising the importance of ensuring the current episode of high inflation is only temporary. 
• The Treasurer announced the appointment of Ms Emma Herd, EYs Oceania Partner for Climate Change and Sustainability Services, as a part‑time member of the Financial Reporting Council (FRC).

Communications Update:

• The ABA provided commentary on a number of key issues in the media this week including the release of a discussion paper by the Centre for Women’s Economic Safety, the closure of regional bank branches, bank support for Agribusiness, as well as the release of the ABA’s 2022 SME Lending Report.
• The ABA launched the SME Lending Report 2022. Key highlights include:
  • The appetite for finance for small businesses has dropped to the longer-term average, but is growing amongst medium businesses.
  • Total value of outstanding finance to small businesses was $142b in August 2022, returning to the medium-term average, after having dropped to under $138 billion in the second quarter of 2022.
  • Lending to medium businesses has increased by 16% in the past 3 years ($281b in August 2019 to $326b in August 2022).
  • Fewer businesses are reporting a requirement to borrow for cashflow purposes, suggesting that cashflow problems are less of a concern than they were a year ago.

Read the full update online

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