RBA deputy governor warns of ‘false prophets’ as cash rate holds
Reserve Bank of Australia (RBA) deputy governor Andrew Hauser reinforced uncertainty in forward projections as part of the reason behind the central bank’s decision to hold the cash rate during a speech at the Economic Society of Australia in Brisbane.
Following its August meeting, the RBA announced it would be holding the cash rate target at 4.35 per cent, the sixth consecutive hold since November 2023.
At the time, RBA governor Michele Bullock said the board had also considered a rate increase, referring to the path to the 2–3 per cent inflation target as “slow and bumpy”.
Hauser used his Brisbane speech to reinforce “uncertainty” as part of the thinking behind the decision to hold, warning against knee-jerk reactions and “false prophets”.
“Those seeing things differently are castigated as incompetent, biased or on the make. And changes in view are presented as disastrous or humiliating failures. In short, it’s a world of winners and losers, gurus and charlatans, geniuses and buffoons,” Hauser said.
“Of course, eye-catching language sells newspapers, secures clients and draws crowds to the soapbox. But when the stakes are so high, claiming supreme confidence or certainty over what is an intrinsically uncertain and ambiguous outlook is a dangerous game. “At best, it needlessly weaponises an important but difficult process of discovery.
At worst, it risks driving poor analysis and decision-making that could harm the welfare of all Australians.”
Assistant Treasurer flags reset for CDR
The Consumer Data Right (CDR) looks set for a hard reset, with Assistant Treasurer and Minister for Financial Services Stephen Jones MP flagging the Albanese government’s plans to develop a framework that better serves consumers.
Minister Jones said he believed the CDR “has potential to deliver real economic transformation. But the former government’s poor execution means it costs too much for businesses to implement, so few have taken it up.”
He also noted measures the government has already taken, including:
Opening consultation on changes to consent and operational rules.
Releasing the Heidi Richards report, which found the regulatory costs of implementing CDR on its current track as substantial.
Writing to the chair of the Data Standards Body to secure alignment.
Signalling intention to explain CDR to non-bank lending in early 2025.
“The Government will resolve these issues to ensure Australians can unlock the value of their data,” Minister Jones said. “In doing so, we will reduce friction within the CDR to improve cost effectiveness, take up, and deliver better financial outcomes for consumers.”
Westpac confirms closure of RAMS
Westpac has announced the closure of RAMS Financial Group Pty Limited (RAMS) with the business closed to all new home loan applications. The bank confirmed the closure, part of a strategic review of the business first announced on 6 November 2023, in a release on the Australian Securities Exchange.
While RAMS won’t be accepting any new business, Westpac said all existing loans will remain in place and borrowers will still have access to the RAMS app, website, and call centre.
The big bank also said it would be contacting customers to assist them with current RAMS mortgage applications.
Damien MacRae, Westpac managing director mortgages, said the big four bank had delivered considerable portfolio simplification during recent years.
“After a thorough review, [we] have decided that offering home loans through RAMS franchisees is not right for Westpac,” MacRae said.
Westpac does not expect the closure to have a material impact on the bank’s financial results for the year ending 30 September 2024.
“We are also providing franchisees with mutually agreed support and there will be ongoing opportunities for RAMS employees within Westpac,” MacRae said.
MFAA and CAFBA provide framework for co-operation
The Mortgage & Finance Association of Australia (MFAA) and the Commercial & Asset Finance Brokers Association of Australia (CAFBA) are set to collaborate on matters of mutual interest as part of a strategic partnership between the peak bodies.
As part of the agreement, the pair have signed a memorandum of understanding, aiming to foster innovation and nurture a broking industry that “adheres to the highest standards”.
MFAA CEO Anja Pannek noted the close work between the associations in the past.
“We believe this MOU will strengthen both our associations and pave the way for a united front on key industry issues,” Pannek said.
“By working together, we can enhance our efforts on behalf of our members and leverage resources to innovate and deliver superior resources.”
CAFBA CEO David Bushby said members of both bodies will benefit.
“CAFBA and the MFAA have repeatedly found there is real benefit to all our members by working together, sharing resources and aligning our advocacy efforts,” Bushby said.
“The benefits for our members and the wider industry of a strong relationship between the two associations will only become more important as the broking industry further grows and evolves.”
