On 7 December 2023, the Senate referred the Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 [Provisions] to the Senate Economics Legislation Committee for inquiry and report by 21 March 2024.
The critical issue is that the Treasurer is walking back Government’s power to intervene with RBA decisions if they do not agree. This power was put into the constitution years ago but has never been used.
Without it, the Technocrats will be able to take over, and follow the lead of the Bank For International settlements, to the potential disadvantage of ordinary Australians and businesses.
Make a submission to make the case for this power to be retained! The closing date for submissions to this inquiry is 2 February 2024.
More from Edwin Almedia, our property insider, as we look ay the latest “announcables” relating to housing and migration… how much is smoke and mirrors? The latest from the Treasurer makes the point!
The outlook is higher construction costs, a tilt towards migrants with more capacity to buy property, and the risk of more low quality construction, as high-rise height limits are relaxed.
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Another Friday afternoon chat with Tarric Brooker, as we look at the status of households, as monetary policy continues to run, and as the tax take accelerates significantly.
Via the charts we look at the trends across the country, invent a new TV game series, and also pick apart the political agenda.
Tarric’s charts are here: https://avidcom.substack.com/p/dfa-chart-pack-8th-december-2023
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Digital Finance Analytics (DFA) Blog
Households Taken To The Cleaners: With Tarric Brooker...
I caught up with Robbie Barwick from the Australian Citizens Party to review the recent hearings into Regional Bank Branch closures, and more broadly about the progress made this year.
We look at the underlying issues which have been brought to the surface through the inquiry, and consider what happens next.
And here is the link to the paper which was discussed in the hearings: https://citizensparty.org.au/sites/default/files/2022-06/aust-hamiltonian-credit.pdf
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Digital Finance Analytics (DFA) Blog
A Significant Year Of Breakthroughs... With Robbie Barwick!
More evidence from the Senate last week, concerning the impact of bank branch closures. The Small Business Ombudsman calls out what is wrong with the current system, and why small business is being degraded. He makes a strong case for significant change!
This is the fourth segment following the recent hearings in Canberra in the Senate Rural and Regional Affairs and Transport References Committee, on Friday 1st December 2023 and relating to bank branch closures.
More evidence from the Senate last week, concerning the impact of bank branch closures. The Small Business Ombudsman calls out what is wrong with the current system, and why small business is being degraded. He makes a strong case for significant change!
This is the fourth segment following the recent hearings in Canberra in the Senate Rural and Regional Affairs and Transport References Committee, on Friday 1st December 2023 and relating to bank branch closures.
The Centrals Bankers’ love in in Hong Kong this week was full of contradictions. Indeed, yesterday I featured the RBA’s new Governors comments, centered around her view households were largely coping ok with the 4.25% hike in rates. My reaction was how out of touch with real households she sounded.
The International Monetary Fund this month said the Australian economy was running above capacity, with low unemployment, “sticky” inflation and rising house prices and so forecast a delay in local inflation returning to the 2 per cent to 3 per cent target range until early 2026, slower than most other advanced countries. They also warned federal government that the nation’s infrastructure spending boom has helped push the economy beyond full capacity, requiring the Reserve Bank to increase interest rates further to tame inflation.
But also attending the conference, and a speaker later in the Day was Ex Governor Philip Lowe. He is worried central banks may not have increased interest rates high enough to control inflation and that cost of living help from governments adds to inflation.
The ABS, said: “The 4.9 per cent increase in CPI is down from 5.6 per cent in September and below the peak of 8.4 per cent in December 2022.” But as we will see, the number was lower, thanks partly to Government intervention, which of course means higher spending.
So perhaps the truth is, while inflation was down a little, it may week be Central Banks still have more to do, so the game of political chicken on the inflation front is actually far from over. We will see.
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The massive hike in interest rates imposed by the RBA in its attempt to squeeze out inflation is not hitting all household cohorts’ to the same extent. Indeed, some older households with savings and no mortgages are enjoying their wealth boost, after years of low rates eroded their incomes. It is worth noting that the rate of rate increases is the sharpest lift in mortgage rates on record.
Overall mortgage stress, defined in negative cash flow terms has never been higher, as we discussed in our recent live show.
Within that, the consequences are perhaps most profound for younger, often more leveraged households. Indeed, the 2023 Risk Radar Report from credit bureau Experian shows that recent first home buyers that purchased in 2019 or later are suffering the highest rates of mortgage stress, as well as missed payments.
A decline in living standards will most acutely be felt by younger cohorts, as well as those with big mortgages held into retirement and beyond.
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The currently running Senate inquiry into bank branch closures has flushed out that while banks are claiming they are following their customers into a digital future, actually, they ae rather setting that agenda, removing ATMS and Branches and forcing people to go digital, whether they want to or not.
And some banks have all but admitted they are fudging the figures, to buttress their strategy, never mind the impact on real customers.
While politicians are keen to step back from the argument on the basis banks are commercial entities and should be able to make what ever strategic decisions they want, the truth is banks are a government protected species, who have received massive financial support from us tax-payers via the Term Funding Facility and other measures.
And to reinforce the argument that we are being lied to, according to a news.com.au exclusive article, a former ANZ employee has alleged that the bank is forcing customers out of branches and then using their absence to justify branch closures.
Phillip, a pseudonym told news.com.au that during the time he worked at an ANZ branch in a metropolitan area, staff were directed not to serve customers who came to the branch.
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