Banks withhold rate hikes to savers

Banks are earning an estimated $600m a month by refusing to pass on the majority of recent interest rate increases to savers, ahead of another major rate hike expected today.

What we know:

  • Morgan Stanley analysis reveals average rates offered by the major banks’ “standard online savings accounts” have lifted by roughly 0.30% since April (The Australian $); 
  • This is only a fraction of the 1.25% in rate hikes delivered since May — which have been largely passed on to mortgage holders;
  • Treasurer Jim Chalmers urged banks to give their customers “a fair go”, noting “people are rightly asking why interest rate increases don’t always get passed on as quickly for savings as they do for mortgages”;
  • RateCity head of research Sally Tindall called for customers to shop around to get a better savings account deal, noting that “the gap is widening in savings rates, and many Big Four bank customers are being left behind” (RateCity); 
  • An Australian Banking Association spokesman said the sector was “fiercely competitive”, and that “each bank makes its own decisions on its individual offers”;
  • It comes as economists predict the Reserve Bank will today lift its key interest rate by 50 basis points once again, taking the cash rate to 1.85% (Bloomberg); 
  • This would represent the first time interest rates have risen at four consecutive RBA meetings since the introduction of the 2-3% inflation target in 1990 (SMH); 
  • Although property prices are easing slightly as interest rates climb, lenders are simultaneously winding back how much people can borrow for mortgages (ABC). 
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Nuclear subs raise ire in Asia

Indonesia is lobbying countries at a key UN meeting to obstruct efforts by Australia to obtain ­nuclear-powered submarines, with Malaysia and China also concerned about the plan.

What we know:

  • At a UN nuclear non-proliferation review conference in New York, Indonesia has called for acquisition of nuclear-propelled submarines by countries like Australia to be monitored tightly by the UN watchdog (SMH); 
  • Indonesia says it is taking “a very serious interest” because its waters will be passed by such vessels;
  • In a working paper the country highlighted safety issues with the transportation and use of highly enriched uranium and the risk of it being diverted to weapons programs;
  • Indonesia is lobbying the 120-strong block of Non-Aligned Movement nations to support its position, with Malaysia backing the stance (The Australian $); 
  • China is also objecting to Australia’s nuclear submarine ambitions at the conference, with Communist Party–aligned think tanks claiming the agreement would constitute an “illegal transfer of weapons-grade nuclear material” (Australian Foreign Affairs); 
  • Indonesia’s submission to the conference was made in the same week that President Joko Widodo met with China’s leader Xi Jinping;
  • Australia’s deal with the US and UK to acquire nuclear-powered submarines will controversially rely on highly enriched uranium — also used in atomic weapons — in the boats’ reactors instead of low-enriched uranium (AFR $); 
  • The AUKUS partners have responded to the criticism by arguing it will be impossible for Australia to convert the uranium in the submarines’ welded power units without ruining the boats.
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Ken Wyatt backs Voice referendum

Former Liberal minister for Indigenous Australians Ken Wyatt has backed the Labor government’s campaign for a referendum on a constitutionally recognised Voice to Parliament, while the rest of his party remains divided on the issue.

Wyatt says he was forced to be “pragmatic” about the Voice as the Morrison government’s opposition to a referendum hardened over time (The Age). 

Wyatt, who lost his seat of Hasluck in WA at the recent federal election, said, “it’s not a change of position from me at all. You have to be pragmatic as a minister on how to progress legislation when people have diverse views.

“I want to see an enshrined Voice,” he said, adding “if we don’t give Aboriginal people a Voice, nothing will change”.

Country Liberal senator Jacinta Nampijinpa Price is among Coalition voices to critique the plan, arguing it is a distraction from practical issues such as the "rivers of grog" flowing into Indigenous communities (ABC). 

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Regional rentals skyrocket

New rental data analysis shows that regional areas are bearing the brunt of sharply increasing rental costs across the country.

The analysis compares rental cost increases over three years from investment data company SQM Research with the wage growth of workers in retail and healthcare (news.com.au). 

Tasmania’s west coast saw the sharpest increase, up 18.7% over three years, with the median weekly rent now sitting at $394.39.

That was followed by northern WA, where the median weekly rent has reached $643.18 after a 16% jump.

That compares to Sydney’s eastern suburbs, which crept up 2.4% to $791.85, and the Brisbane CBD, up 3.6% to $556.60.

Kate Colvin, national spokesperson for the Everybody’s Home campaign, called for the Albanese government to build more social and affordable housing.

The national vacancy rate sits at 1% — the lowest point on record — and is just 0.7% in the regions (Junkee). 

It comes as the WA government reviews tenancy laws to remove “no grounds” rental evictions (The Saturday Paper). 

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Beer tax lifts a pint to $15

The price of a pint is expected to hit $15 in Australia as beer excise rises in tandem with growing inflation.

The Australian Tax Office on Monday announced the excise on beer would be lifted by 4%, or $2.50 more a litre, under its CPI indexation review (The Guardian). 

The Brewers Association of Australia said it was the biggest increase in more than 30 years.

A report by economist and University of Adelaide professor Kym Anderson AC found Australians paid the fourth-highest beer tax in the world compared with advanced OECD and EU countries.

Australians have however been named the heaviest drinkers globally (VICE). 

Earlier this year health professionals signed an open letter arguing against any alcohol tax cuts for health reasons (Crikey). 

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I solemnly and sincerely affirm and declare I will be faithful and bear true allegiance to the colonising Her Majesty Queen Elizabeth II.

Indigenous Greens senator Lidia Thorpe adds her own twist to the oath of allegiance, before being forced to restate it without the word “colonising”. Vital of course that Australia continues its proud 233-year tradition of forcing Indigenous people to bow down before a foreign monarch (National Indigenous Times).

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Postscript: New US Bill Proposes Limiting The Use ​of Rap Lyrics As Court Evidence

A new bill is being proposed in the United States to prohibit the use of song lyrics as evidence in court following the arrests of Young Thug and Gunna earlier this year. The Restoring Artistic Protection (RAP) Act looks to limit the use of lyrics as evidence during a trial, emphasising the musician’s right to “artistic expression” (MixMag).

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Max Opray is Schwartz Media’s morning editor and a freelance writer.

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