This is a good news story, as I discuss with progress being made on the move towards the creation of a Postal Bank in Australia, with Robbie Barwick from the Australian Citizens Party.
But we need to keep the pressure on to ensure that the National Bank is developed in the way to benefit ordinary Australians and Businesses, so there is more still to do. And keeping pressure on our elected representatives will be essential!
Home builders are falling off the perch at an alarming rate with high rates of insolvency among construction firms, many of whom were homebuilders, to 3,000 in the past year. While many of these were small firms, we are still seeing a spate of larger firms going under. We are encountering more people in our 1:1 discussions with people coping with half built projects, no builder to take over the work, rising costs and blown out completion dates. No wonder people prefer to buying existing property.
The latest quarterly data on the value of construction work done also fell by 0.1% over Q2 to be 2.9% lower year-on-year.
More broadly, The Albanese Government is a complete mess on housing with the three bills that comprise its $32bn Housing for Australia plan blocked in the senate. These include The Help to Buy shares equity scheme. The Housing Future Fund equity investment vehicle to build just 13,000 houses per year. And the Build to Rent legislation which is designed to assist corporate to get tax breaks to build and then rent units, probably at higher than market rents. After all they are designed to make profits for those investing corporates and superfunds.
Prime Minister Anthony Albanese has threatened to use the Senate’s obstruction of Help to Buy as a trigger for a double dissolution election. Welcome to that time of the political cycle where we find ourselves burrowing into the election date speculation rabbit hole.
The real fix of course is to cut immigration significantly, as this would ease the rental shortage and lower rental inflation; which in turn would take pressure off the RBA to hold rates higher for longer enabling builders to clear the huge backlog of approvals and easing pressure on households. And on that front, Moody’s says that Australian mortgage delinquency rates, which increased over the June quarter, will continue to rise moderately over the rest of this year as high interest rates and sticky inflation put financial stress on households.
Standing back, the policy errors made by the current government are literally hitting home, and with the prospect of more political tricks on all sides of politics, the real impact on people will continue. They should be held to account for their mistakes.
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This is an edited version of a live discussion, with Robbie Barwick, Research Director from the Australian Citizens Party as we discuss the newly released Senate report on Regional Branch Closures. Following their recommendations for making the provision of banking services and access to cash a fundamental right, and for considering a Public Bank, where does the fight go next, and will the Politicians play games or do what’s right for the Australian community?
This is an edited version of a live discussion, with Robbie Barwick, Research Director from the Australian Citizens Party as we discuss the newly released Senate report on Regional Branch Closures. Following their recommendations for making the provision of banking services and access to cash a fundamental right, and for considering a Public Bank, where does the fight go next, and will the Politicians play games or do what’s right for the Australian community?
Over the 13 hearings held across Australia and in more than 600 written submissions the only defence of the banks’ actions came from the banks themselves, but when their executives appeared to give evidence, all they managed to do was convince the senators of just how out of touch they were with their customer heartland.
This arrogance was perfectly summed up by expert witness Andy Schmulow, Associate Professor of Law from the University of Wollongong.
“When it comes to closing branches, Australia is a free for all in which banks are entirely unconstrained: there is no degree to which they are held to account in discharging their obligations to communities which have supported them for generations. This, it is respectfully submitted, is disgraceful and indefensible,” Dr Schmulow said.
The senators agreed. On Friday they handed down an historic report with eight bold recommendations.
But now lets see the actions to protect regional communities and access to cash. I want to see real action now, not just political games, so I will be watching closely.
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Digital Finance Analytics (DFA) Blog
Bankers Lose Over Bank Branch Closures: But Now The Political Games Begin!
Over the 13 hearings held across Australia and in more than 600 written submissions the only defence of the banks’ actions came from the banks themselves, but when their executives appeared to give evidence, all they managed to do was convince the senators of just how out of touch they were with their customer heartland.
This arrogance was perfectly summed up by expert witness Andy Schmulow, Associate Professor of Law from the University of Wollongong.
“When it comes to closing branches, Australia is a free for all in which banks are entirely unconstrained: there is no degree to which they are held to account in discharging their obligations to communities which have supported them for generations. This, it is respectfully submitted, is disgraceful and indefensible,” Dr Schmulow said.
The senators agreed. On Friday they handed down an historic report with eight bold recommendations.
But now lets see the actions to protect regional communities and access to cash. I want to see real action now, not just political games, so I will be watching closely.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battle to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.
Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.
So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.
This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.
My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battel to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.
Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.
So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.
This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.
My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Against the backcloth of higher rates for longer, many of the Australian banks will provide trading updates over the next couple of weeks. As a group, they currently have the highest set of valuations seen for decades, but then, their earnings have held up relative to expectations. So what is ahead? And are all banks equal?
Some analysts are saying that although banks have flat to negative growth coming up for this year, from a capital management perspective, they’ve all got excess capital, so there will be more buybacks and special dividends to come. So the high valuations are just fine. But not everyone is convinced. Citi’s downgrades come a month after Macquarie told its clients to “underweight everything” in the banking sector.
But it’s worth highlighting that not all banks are created equal, because regional banks including Bendigo and Adelaide Bank, and Bank of Queensland are under the pump and look to be dying a slow death because of higher cost of funds compared with the big four banks, higher capital requirements, the upward pressure on costs from upgrading technology and lack of scale.
Treasury, the RBA and APRA need to ask themselves whether they are happy to ultimately have a financial services sector dominated by the big four banks and Macquarie. This is why a public bank, providing essential banking services to communities should be part of the solution, something which we hope will be tabled in the final report from the Senate looking in Regional Branch closures. As major banks leave smaller population centres without services, we need a valid alternative. We will discuss this again on Tuesdays live show at 8pm Sydney with Robbie Barwick.
Meantime, the larger players continue to buttress their profits, at the expense of ordinary Australians, and while the market like the high valuations, Australia INC is the poorer.
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Despite cash being legal tender in Australia, surprisingly it is legal for businesses to refuse to accept it provided that they inform consumers of their stance before any “contract” for the supply of goods or services is entered into.
The war on cash has taken an interesting turn, with the RBA being questioned by the Senate Inquiry into Regional Bank Branch closures, and claiming the use of cash had fallen, but frankly on thin and filtered evidence; while Armaguard, Australia’s only cash-in-transit business is facing the prospect of collapsing due to the claimed declining use of cash. The RBA, which regulates the payments industry and is responsible for printing money is also involved in the crisis talks.
And a social media campaign, led by the Cash is King Facebook group is calling on Aussies to withdraw and use cash next Tuesday, April 2, in protest against the shift to digital payments. The protest is aimed at showing Australia’s banks and retailers that there is still a demand for the use of cash in society. That is, if you can still find an ATM.
So, action on Tuesday to grab some cash could be an important step on the road to saving cash for All Australians who want to use it, despite pressure from the Government who is responding to huge pressure from the commercial banks. This in turn puts massive pressure on the current Senate review, who is scheduled to hold one more community hearing on Bribie Island on the 16th April. Will the committee who has laid bare the issues of branch closures and removal of cash come good or hook their final report like the earlier Royal Commission Inquiry into Financial Services, which exposed major issues through their hearings, only to turn to water in their final report and recommendations, which allowed the banks to behave business as usual. This time all eyes will be on the Senate.
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