Weekly update: 05.05.23

“The Government does recognise that Australians are under substantial cost of living pressure right now, and that’s why that’s the number one priority in the Budget” 

Treasurer Jim Chalmers

Parliamentary Update:

• The Senate published a draft Budget week legislative program. The following Bills, subject to change, are scheduled to be considered:
  • Tuesday 9 May
    • Housing Australia Future Fund Bill 2023
    • National Housing Supply and Affordability Council Bill 2023
    • Treasury Laws Amendment (Housing Measures No. 1) Bill 2023
  • Wednesday 10 May
    • Treasury Laws Amendment (Consumer Data Right) Bill 2022
    • Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023
  • Thursday 11 May
    • Financial Accountability Regime and Compensation Scheme of Last Resort bills.

• Sky News reported speculation that the upcoming Federal Budget could be in surplus for the current year.
• The AFR has captured a full list of Federal Budget measures that have been announced or widely speculated in recent days.
• Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones announced that superannuation would be paid on payday from 1 July 2026.
• Housing Minister Julie Collins announced that the Government secured support for the Housing Australia Future Fund bills from the Jacqui Lambie Network.
• Assistant Minister Andrew Leigh published an opinion piece for the Lowy Institute titled ‘Choosing openness in the international economy’.
• The Senate Economics Committee released its report into Treasury Laws Amendment (Consumer Data Right) Bill 2022 [Provisions]. The Committee recommended that the bill be passed as it stands.

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Policy Update:

• ABA Chief of Policy Chris Taylor appeared before a Senate Inquiry into Treasury Laws Amendment (2023 Measures No. 1) Bill 2023, which will further limit the ability of companies to issue franked dividends on certain distributions that are funded by capital raising activities.
• The ABA attended the NSW Office of Registrar General’s CEO Stakeholders Forum.

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Regulatory Update:

• The RBA increased the cash rate by 25 basis points to 3.85%.
• The RBA’s Head of Economic Analysis Department Marion Kohler delivered a speech on ‘The Why, How and What of Forecasting’.  
• ASIC have called on investment product issuers to ‘lift their game’ on design and distribution obligations.
• RBA Governor Philip Lowe delivered a key speech in Perth on monetary policy.

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Economic Update:

• A series of economic indicators released this week indicate that cost of living, retail turnover and Australian balance of trade continue to increase. While these are all positive economic indicators on their own, showing a healthy economy, they each have the potential to exacerbate inflation. The RBA’s decision to increase the cash rate is in keeping with these strong indicators.

• A consequence of the continued increase in the cash rate is continued increases in the cost of mortgages. While mortgage interest is not reflected in the consumer price index, the increased costs are certainly felt by Australian households. Analysis by the ABS shows that mortgage interest accounts for 72 per cent of the increased cost of living to Australian employee households between March 2022 and March 2023.

Employee households All groups, annual movement (%), ordered by largest contributors

Source: ABS selected living cost indexes

Source: ABS, Consumer Price Index, Table 3; Analysis by ABA 

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Communications and Media Update:

• The ABA issued a media release about how World Password Day is a reminder to stay vigilant against online criminals.
• The ABA also issued a statement regarding the Reserve Bank of Australia’s interest rate increase.

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Upcoming Events:

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Upcoming Submissions:

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Selected Media

• The Australian – Franking credit crackdown threatens banks’ capital raisings
• AFR – ‘Brutal reminder’: Chalmers’ budget warning after RBA shock
• AFR – Banks and fundies fear franking credit hit
• AFR – Why the greenwashing crackdown means more green hushing 
• Yahoo Finance – RBA rate hike: Bank’s urge Aussies to ‘reach out’
• SMH – Millennials return to cold hard cash in a bid to save money

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