RBA cuts cash rate for the first time in more than 4 years
The Reserve Bank of Australia (RBA) cut the cash rate for the first time in more than four years in February, lowering the rate by 25 bps from 4.35 per cent to 4.10 per cent.
In its monetary policy decision statement, the central bank’s board indicated that signs of moderating underlying inflation had given it “more confidence that inflation is moving sustainably towards the midpoint of the 2–3 per cent target range”.
However, the RBA also said there was a degree of uncertainty in the forward outlook caused by factors such as the tight labour market and geopolitical and policy uncertainties.
This decision was the last rate call under the RBA’s old structure. From 1 March 2025, the central bank will have two boards, one to set the cash rate and another for governance.
Lenders were quick off the mark to pass the long-awaited cut onto borrowers, with all four major banks indicating that they would be amending their variable rates.
Speaking to the media, RBA governor Michele Bullock said: “It’s clear that higher interest rates have been working as anticipated, restricting economic activity and putting downward pressure on inflation.
“The board judges it’s time to reduce a little bit of that restrictiveness, but we cannot declare victory on inflation just yet. It is not good enough for inflation to be back in the target range temporarily. The board needs to be confident that [inflation is] returning to the target range sustainably.”
Auswide and MyState complete merger
Bundaberg-headquartered lender Auswide Bank (Auswide) and Tasmanian-based lender MyState Bank Limited (MyState) commenced their first day of implementation as a merged entity on 19 February, after receiving necessary shareholder, regulatory, and court approvals.
The merger, which has been in the works for six months, sees Auswide now an indirect wholly owned subsidiary of MyState Limited.
Four customer-facing brands comprise the new group – MyState Bank, Auswide Bank, SelfCo (asset finance), and TPT Wealth – with a combined mortgage book of $12.7 billion in home lending, nearly $10 billion in retail deposits and 272,000 customers.
Brett Morgan, the managing director & CEO of MyState Bank, leads the new group.
Speaking to The Adviser, Morgan said that while the merger has officially completed, brokers “should feel absolutely no difference,” highlighting that they will still be serviced by “the same BDMs, same operations team, same broker support” under the separate brands.
“From day one, there is zero change for brokers and their customers. This is really important and it has been a priority of mine that the businesses continue to run independently and grow and drive growth,” he said.
However, Morgan said the group would be “consolidating some other parts of the business, such as the group services and shared services” and investing in the integration and transformation functions of the business.
“But for brokers, they won’t see anything different, feel anything different, except for where we can make improvements and invest into that transformation,” he said.
Government temporarily bans foreign home purchases
The Albanese government announced it will ban foreign purchases of established dwellings in an effort to ease pressure on the housing market.
From 1 April 2025 until 31 March 2027, foreign investors (including temporary residents and foreign-owned companies) will no longer be able to purchase an established dwelling in Australia while the ban is in place unless an exception applies.
A review will then be undertaken to determine whether the temporary ban on foreign purchases of houses should be extended beyond 31 March 2027, the government said.
Limited exceptions will include investments that “significantly increase housing supply or support the availability of housing supply” and for the Pacific Australia Labour Mobility (PALM) scheme, the government said.
The ban is aimed at freeing up homes that would otherwise have been bought by foreign investors.
Commenting on the announcement, the Minister for Housing and Homelessness, Clare O’Neil, said her party is “coming at this housing challenge from every responsible angle”.
Industry to pay $2.72m for CSLR
The Compensation Scheme of Last Resort (CSLR) released its levy estimates for the financial year ending 30 June 2026 (FY26), with the total skyrocketing to a combined $77.97 million across all subsectors.
This figure represented a threefold increase on the total estimate for the financial year ending 30 June 2025 ($24.1 million).
Credit intermediaries are estimated to pay $2.72 million, a 51 per cent increase on the previous financial year ($1.8 million). However, most of the total figure has been attributed to financial advisers, with levy estimates for the sector surging to $70.11 million, driven by the collapse of firms Dixon Advisory and United Global Capital (UGC).
By comparison, the credit provision services and securities-dealing subsectors are estimated to pay $2.80 million and $2.34 million, respectively. These latest estimates, compiled by independent external actuary Finity, are related to the third levy period for the CSLR and will support the processing of 1,800 claims and 491 compensation payments.
CSLR CEO David Berry said the estimates for the financial advisers exceeded the subsector cap of $20 million while expressing concern at both the number of victims of misconduct and the impact of harm caused by “a relative few” on the reputation of the rest of financial services.
“We will continue to work closely with industry, Treasury, ASIC and the Minister’s office as we fulfil our legislative responsibilities alongside building greater trust among consumers in the financial services sector,” he said.
