Weekly Update: 5 July 2024

Highlights this week:

• Announcement: The ABA released the findings of a strategic review undertaken by Accenture into the roll-out of Australia’s Consumer Data Right (CDR) regime  
• In the media: The ACCC granted interim authorisation to allow the ABA, banks and retailers to provide financial assistance to Armaguard.  
• Key data: Retail trade showed an increase in retail turnover of 1.7 per cent year-on-year (since May 2023) in seasonally adjusted terms.

Quote of the week:
“I think the story that you’ve got on the front of your paper today from the ABA is a reminder that there are substantial challenges when it comes to the consumer data right, and I think some of that analysis makes that clear. We inherited the consumer data right from our predecessors, as you know. They designed something which has very high compliance costs and has had very low take up. I think that’s really clear. And we will work methodically through those sorts of issues in a legislative sense but also working with the various stakeholders to see if we can get it right.” 

– Treasurer Jim Chalmers, Doorstop interview, Parliament House Canberra, 3 July 2024 

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Media & Communications Update:

• CDR REPORT: There was extensive media coverage of the ABA’s release of Accenture’s strategic review of the consumer data right regime.  

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Policy Update:

• This week, the ABA released the findings of a strategic review undertaken by Accenture into the roll-out of the Consumer Data Right (CDR).  
• The review found that very few Australians are using the CDR (0.31% of banking customers had a data sharing arrangement in Dec-2023), despite the significant investment by banks to date (~$1.5b). For mid-tier banks, the level of investment required has been relatively higher, requiring deprioritisation of strategic investment elsewhere, and the growing perception that CDR’s compliance obligations are negatively impacting competition within the industry. 
• Additionally, ABA policy teams:
  • met with Ilion  
  • met with AGD and AUSTRAC for detailed discussion on aspects of proposed AML/CTF reforms 
  • ABA made a submission to the Department of Finance consultation on Digital ID Rules, Accreditation Rules and Data Standards. ABA’s submission focused on ensuring that the standards development process remains focused on its core function, ensuring that any new requirements are aligned with existing regulations, and future-proofing the core design of the system

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Regulatory Update:

• The ACCC announced the interim authorisation of financial support to Armaguard  
• The RBA released the minutes of the June Monetary Policy Meeting 

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Parliamentary Update:

• The Assistant Treasurer announced that the ATO has joined the Australian Financial Crimes Exchange.  
• Opposition Senator Dean Smith tabled a Notice of Motion on Monday to attempt to bring forward a vote in the Senate on the Treasury Laws Amendment (Consumer Data Right) Bill 2022. An amendment was moved delaying the motion until the next sitting of Parliament in August.  
• Senator Andrew Bragg tabled a report for the Senate Standing Committee on Economics’ inquiry into ASIC investigation and enforcement.  
• The Treasurer introduced new legislation on the payment of taxes by multinationals in Australia.  
• The Treasurer spoke about the consumer data right in a doorstop interview at Parliament House. 
• The Assistant Treasurer welcomed the passing of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 which seeks to streamline the delivery of financial advice.  
• Dr Andrew Leigh MP marked changes to the tax disclosure requirements which come in effect next week.   
• Dr Andrew Leigh MP announced the approval of CHOICE, CALC and COSBOA as designated complainants to the ACCC. 
• Sam Mostyn AC was sworn in as Australia’s 28th Governor General.  

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Economic Update:

• Retail trade showed an increase in retail turnover of 0.6 per cent month-on-month (since April 2024) and 1.7 per cent year-on-year (since May 2023) in seasonally adjusted terms.
• However, the retail trade increases appear to be reflective of increases in prices rather than increases in volume of sales, which have been decreasing in nearly every quarter since June 2022, Figure 1. 
• This analysis is further corroborated by the relatively small increase in monthly householding spending, which rose only 0.1 per cent in the year to May 2024. 
• Retail trade: Current prices & Chain volume measures, Change from preceding quarter, %, March 2022 – March 2024 

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Coming up next week:

Parliament/Regulators:  

• Parliament rises for the winter break, returning 12 August 2024.  
• 8-10/7 – ABA and a number of member banks are appearing before the Parliamentary Joint Committee on Corporations and Financial Services inquiry into Financial Services Regulatory Framework in Relation to Financial Abuse.  
• 10/7 – House of Representatives Joint Select Committee on Social Media and Australian Society 

Data announcements:  

• On 8 July the ABS releases Lending Indicators  

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Upcoming Submissions:

Published submissions

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Selected Media:

• AFR – Banks spent $1.5b on account switching. No one is using it 
• 7 News – ACCC approves Armaguard bailout by major banks, grocery giants and Australia Post 
• The Conversation – ASIC has comprehensively failed and its role should be split in two, according to long-awaited report 
• SMH – Early end of year sales lift retail spending 
• ABC – Major Bank raises alarm on cyber ‘warfare’ 
• The Australian – Cost of living leads to spike in mortgage extensions 

Weekly Update