Weekly Update 29.07.22

Parliamentary Update:

• The 47^th Parliament was opened on Tuesday, 26 July. The first legislative priorities of the Albanese Government included aged care reforms, climate targets, cashless debit card removal, and 10 days paid domestic violence leave.
• Treasurer Dr Jim Chalmers gave a major economic update to the Parliament describing the global economic outlook as ‘confronting’. Updated economic forecasts indicate that inflation is now expected to peak at 7.75%. The economy is expected to keep growing reasonably solidly for the next few years and to avoid recession. To address cost of living issues, the Treasurer cited plans to lower childcare costs, grow wages over time, unclog and untangle supply chains and invest in energy.
• Minister for Small Business Julie Collins and Assistant Minister Andrew Leigh announced that Unfair Contract Terms legislation would be forthcoming shortly.
• From today (29 July), foreign investment application fees will double which is estimated to add an additional $455 million in Budget revenue over the forward estimates.
• The Albanese Government will nominate Rob Nicholl for appointment as the Executive Director at the International Monetary Fund and Kerstin Wijeyewardene as the Alternate Executive Director at the World Bank for two year terms starting in November.

Economic Update:

• The RBA released its financial aggregates for June 2022. Total credit rose 9.1% (business +13.2%, housing +7.8%, personal -2.7%) for the year-ended June 2022. Broad money rose 10%.
• The CPI rose 6.1% for the year to June 2022, rising 1.8% for the June 2022 quarter. The most significant price rises this quarter were new dwelling purchases by owner-occupiers (+5.6% the quarter/+20.3%  the year), automotive fuel (+4.2%/+32%) and furniture (+7.0%/+8.5%).
• Over the twelve months to the June 2022 quarter, The IMF released its World Economic Outlook update. World growth has slowed from 6.2% to 3.2%, and is expected to be 2.9% in 2023, downgrades of 0.4% and 0.7% from the IMF’s April projections.
  • In 2023, the US is projected to hit 1%, the euro area 1.2%. China’s economy is at its slowest in four decades – now 3.3%.
  • World inflation is projected to reach 6.6% in advanced economies and 9.5% in emerging and developing economies.
• The ABS released its agricultural commodities statistics for 2020-21. Key stats:
  • The gross value of Australian agriculture increased 17% to $71 billion in 2020-21.
  • Improved growing conditions drove the gross value of broadacre crops to $23 billion (+79%). Cotton rose to $1.5 billion (+481%).
  • The gross value of livestock disposals and livestock products decreased 5% to 31 billion. Cattle and calves dropped 8%, sheep and lambs dropped 10%.

Communications:

• The ABA and member banks launched new credit report fact sheets and FAQs for customers and financial counsellors, reflecting the 1 July 2022 update in Comprehensive Credit Reporting. 
• The ABA and participating member banks’  ‘Australian Banks: Working to Protect You’ scams awareness campaign continues, encouraging customers to use PayID when making payments.

Regulatory Update:

• APRA Chair Wayne Byres has announced he will step down, effective 30 October 2022. The ABA acknowledged his 8 years of service.
• APRA has released the finalised prudential practice guides (PPGs) that accompany the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions.
• APRA is also publishing an updated version of Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113), and a response paper on the technical issues raised in the submissions received during the November 2021 consultation on the bank capital reforms
• In the US, financial watchdog Consumer Financial Protection Bureau has announced it will recommend banks repay victims of money transfer scams. Banks currently only have liability for money transfers when they’re unauthorized by customers, but the CFPB may raise the bar by deeming any payments made to a scammer as unauthorized.

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29.07.22Weekly Update