There’s a lot of business and economics news around right now. Here are four stories that really stood out:
Inflation continues falling
Govt reviews screen scraping
Some industries struggling
Population expands by 563k
Read more below.
Inflation has fallen for three consecutive months, strengthening the case for those who believe interest rates are at or near their peak. After inflation rose to 6.7% in April, it fell to 5.5% in May, 5.4% in June and 4.9% in July, according to the Australian Bureau of Statistics. Three of the big four banks believe the Reserve Bank will no longer raise the cash rate (currently 4.10%), while the fourth believes there's only one more hike to come. Inflation will be key to the Reserve Bank's decision, because the main point of the rate rises that began in May 2022 has been to reduce inflation to the target range of 2-3%.
The Reserve Bank says inflation has “passed its peak” and is likely to return to the target range by late 2025, but "is still too high". As such, it says “further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe”. New inflation data will be released on September 27, while the Reserve Bank's next cash rate meeting will be held on October 3.
Individuals and organisations have been invited to submit feedback to a federal government consultation process about 'screen scraping', which may soon be banned. Screen scraping involves consumers providing their log-in details to third parties to collect data to provide a product or service, such as loans. This is a common practice, however a recent statutory review of the Consumer Data Right (CDR) recommended screen scraping be banned where the CDR is a viable alternative. That's because the sharing of log-in details is inconsistent with cyber security advice and may pose consumer protection risks. The consultation process, which ends on October 25, is seeking views on the feasibility of banning screen scraping and the comparability of data accessed through screen scraping with the CDR. This follows on from the recent release of exposure draft rules that would expand the CDR to the non-bank lending sector. “The proposed expansion to non-bank lending is expected to give consumers a more holistic view of their financial status when making significant decisions, and a safer alternative to screen scraping,” Minister for Financial Services Stephen Jones said.
Five of the industry groups monitored by the Australian Bureau of Statistics experienced declines in revenue during the year to July:
Electricity, gas, water & waste services: -22.1%
Mining: -15.5%
Transport, postal & warehousing: -3.3%
Arts & recreation services: -1.9%
Retail trade: -0.8%
By contrast, annual turnover increased in eight other industries:
Construction: 19.2%
Other services: 14.3%
Administrative & support services: 10.9%
Information media & telecommunications: 8.5%
Professional, scientific & technical services: 6.2%
Accommodation & food services: 4.4%
Wholesale trade: 3.9%
Manufacturing: 2.5%
One reason some businesses are finding conditions tough is because consumers and businesses have reduced their spending over the past year, in response to higher interest rates and inflation. With prices growing faster than wages, real disposable incomes have gone backwards. However, the Reserve Bank expects an imminent turnaround. It forecast that real disposable income growth would improve from -2.9% in June to -0.1% in December, 0.4% in June 2024 and 2.1% in December 2024. That could lead to an increase in consumer spending and business turnover. I can help you get a business loan
The federal government’s strong migration program has led to a surge in Australia’s population and an increase in the country’s workforce. Over the year to March, the population rose to 26.473 million, an increase of 563,000 people. Australian Bureau of Statistics (ABS) data show that 81% of that growth was due to net overseas migration, with the number of migrant arrivals (681,000) far higher than the number of departures (227,000). The other 19% was due to natural increase – i.e. births minus deaths.
While the country as a whole recorded strong population growth, the situation differed significantly from state to state. The states with the highest growth rates were Western Australia (2.8%), Victoria (2.4%), Queensland (2.3%) and the ACT (2.0%). They were followed by New South Wales (1.9%), South Australia (1.6%), the Northern Territory (0.9%) and Tasmania (0.4%).