by Alan Thornhill
Bank customers, worried about high fees and poor service have left Australia’s big four banks facing their lowest satisfaction ratings in three years.
A new survey, by Roy Morgan Research, found that although only some 5 per cent of bank customers are classed as “dissatisfied,” their complaints may well need to be addressed, to produce wider levels of satisfaction.
So what were they?
Predictably, fees and charges took top spot.
The researchers said: problems in this area were the most frequently mentioned.
They said customers generally felt that many fees were not justified and a backward step.
Their comments had included: “It used to be free and now they charge me a monthly account keeping fee”; “they charge for silly things”; “fees exorbitant”; “…they’re at uni studying and if balance is low they charge fees” and “…extreme overcharging of fees”.
The researchers also said: “the second most frequently mentioned problem,(was) poor service.
This had spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.
The researchers said poor service, spanned a wide range of issues including: “not enough service, prefer you to be out the door”; “poor service and too much focus on profits and shareholders”; ”no follow-up service”; ”very inflexible”; and “poor service and listening skills”.
Then there were branch issues, the Roy Morgan organisation said.
A major branch-related problem was to do with branch closures such as: “they keep closing their branches, very difficult to go to branch”; “removal of branches”;”…closing branches and this results in diminishing service”; “…the branch moved…no close local branch”. Other branch issues related to poor service in the branch: “reduced over-counter service…push to electronic banking”; ”waiting time in branches”; ”not enough tellers”.
by Alan Thornhill
Placating dissidents is risky.
But Malcolm Turnbull was not deterred, a few days ago, when he sent Liberal dissidents a message, from a news conference.
The Prime Minister said “: I am listening very keenly and carefully to concerns that have been raised by my colleagues and of course by other people in the community as well.”
He was, of course, was speaking to a small, but very active group, of Liberal dissidents, who want bigger tax breaks, on superannuation, for their wealthy voters.
The South Australian, Cory Bernardi, who was among the first to speak out on this issue, welcomed the assurance.
The ABC reported that he said Mr Turnbull had been “unbelievably receptive and respectful of differences of opinion on policy issues, including in superannuation.”
But not all are convinced.
Another conservative Senator, George Christiansen, is threatening to cross the floor – and vote against – what he calls a Labor style policy if the government does not drop its proposed $500,000 cap, on tax free superannuation reforms.
The budget contained two main superannution reforms, a $500,000 contributions cap and a $1.6 million pension fund limit.
The Financial Planning Association chief executive Dante De Gori has described these as good measures, but warned confidence in the super system could be eroded by the retrospective effects of the $500,000 contributions cap.
The dissidents do not agree.
One West Australian MP, among their number, says the Liberals would not have lost votes, as they did, in the July 2 elections, if well heeled voters could have been enticed out to polling stations, to hand out how to vote cards.
Ian Yates the Chief Executive of the Council on the Ageing, said “the fact that the Prime Minister and Treasurer are under pressure to reverse sound policy to make super fairer, based on a weak narrative about selected poor election results and fewer well-heeled supporters manning polling booths, would be laughable if it wasn’t so serious.”
He said: ““…superannuation tax breaks cost over $25 billion in foregone revenue.
“Middle and lower earners, the majority of whom are women, have to pay more in taxes – both now and in the future – to pay for super tax breaks that largely benefit high-income men,”Mr Yates said.
Several other bodies also vowed to fight the dissidents’ campaign when Mr Turnbull softened his stance on the matter last Sunday, after declaring in the recent election campaign that the government’s position on the matter was “ironclad.”
Perhaps the most significant of those declarations, for the government, was that from GetUp, which said it is ready to fight on this matter.
Especially as it showed, before the election that it has some skills, in this area.
by Alan Thornhill
Australians planning to buy new homes are still finding them less affordable.
However, a new survey, by the Housing Industry Association confirms that significant differences between the various State capitals persist.
The association’s Affordability Report, published today, showed that affordability overall fell by 3.7 per cent in the June quarter.
It was also 2.1 per cent less favorable than that of the same period a year earlier.
The Association said the capital city housing affordability index fell by 4.3 per cent during the quarter, while regional market index experienced a 1.9 per cent improvement.
“Home price growth moderated in the early part of the year and the HIA Housing Affordability Index showed an improvement in affordability during the March 2016 quarter,” HIA Economist, Geordan Murray said.
“However, in the June quarter dwelling price growth returned and the index reverted to the level we saw at the end of 2015,” he added.
“While there was a decline in the headline index tracking the national picture, there was substantial variation around the country – with substantial differences between states, and also differences between capital city markets and regional markets.”
“The geographic variation in affordability is most evident in the comparison between Melbourne and Perth,” Mr Murray said.
Over the last year, the median dwelling price in Perth has fallen by 4.7 per cent while Melbourne’s has grown by 11.5 per cent,” he added.
This has seen the affordability index for Perth increase by 6.2 per cent over the last year, while the index for Melbourne has fallen by 6.2 per cent.”
“These differences in affordability align with the relative economic performance of these two states.
“The Western Australian economy is navigating the tail end of the mining boom which has seen conditions in the local labour market deteriorate and consequently the rate of population growth has fallen quite sharply.
“ In contrast, Victoria has experienced a healthy level of growth in the labour force and continues to record the strongest rate of population growth in the country,” Mr Murray said.
During the June 2016 quarter, improvements in affordability were observed in three capital cities with the largest improvement in Perth (+3.2 per cent), Darwin (+2.9 per cent) and Hobart (+2.2 per cent).
Affordability worsened in the remaining five capital cities during the March 2016 quarter with the largest decline recorded in Melbourne (-7.4 per cent), followed by Canberra (-5.7 per cent), Sydney (-1.6 per cent), Adelaide (-1.3 per cent), and Brisbane (-1.0 per cent).
by Alan Thornhill
Confidence in Australia’s property market has eased since the Reserve Bank cut the nation’s interest rates in May.
A survey that the National Australia Bank published today shows that the easing is particularly pronounced among property professionals.
In the first NAB Residential Property Survey since the RBA cut the official cash rate in May this year, housing market sentiment amongst property professionals softened.
The bank said its residential Property Index fell to +3, from +6 in Q1 2016, to remain below its long term average of +13.
“Sentiment moderated in all states except SA/NT, which rose 19 points,” it added.
New South Wales joined Victoria as the best performing state, followed by Queensland, the bank said.
“Confidence has however improved, with the national index rising to +29 next year, and +36 in two years’ time,” it added.
The bank said its residential Property Survey for Q2 2016 also found that respondents expect Victoria and Queensland to provide the best capital returns over the next one to two years.
“It’s still a mixed picture across Australia, with house price expectations for the next 12 months holding up well in the eastern states whilst staying flat in SA/NT and continuing to fall sharply in WA,” the bank’s Chief Economist Alan Oster said.
The bank said it had also revised its national house price forecasts for 2016 upwards to 5.1 per cent (from 1.5 per cent). Unit price forecasts were revised up to 3.6 per cent for 2016.
“Our upwards revisions in price forecasts reflects the strength in prices to date.
Over the last six months, Sydney and Melbourne prices have increased by an annualised rate of nearly 19 per cent and 12 per cent respectively,” Mr Oster said.
“However, while there is significant amount of uncertainty over the outlook for prices, we expect that this renewed momentum in the housing market is unlikely to be sustained over the longer term.”
Looking out to 2017, NAB forecasts prices to be flat across most capital cities, with falls particularly in Perth, Melbourne and Brisbane.
While the declines in Perth largely reflect economic conditions, the falls in Melbourne and Brisbane can be partly attributed to added supply and weaker investor demand.
“NAB is forecasting a much softer residential property market, with 0.5 per cent growth in house prices and nearly 2 per cent decline in unit prices in 2017,” Mr Oster said.
NAB Economics continues to hold the view that residential property prices are unlikely to experience a sharp ‘correction’ without a trigger from a shock that leaves unemployment or interest rates sharply higher.
The Residential Property Survey series also measures foreign buyer activity in the Australian housing market.
Market share of foreign buyers in new Australian housing markets fell for the third straight quarter in a row – to 10.4 per cent.
A sharp fall in foreign buyer activity in Queensland was offset by growth in Victoria and a modest rise in NSW.
Market share of foreign buyers in established markets was unchanged at 7.2 per cent.
About 230 property professional participated in the Q2 Survey, the bank said.
by Alan Thornhill
Too little credit can present risk to an economy, a Reserve Bank chief warned today.
Luci Ellis,who heads the bank’s financial stability department said this is something policymakers need to keep in mind.
Addressing a seminar in Sydney, Ms Ellis said the dangers of too much credit are well known.
“Over-exuberant lending and borrowing can mean that some people are getting loans that they have little prospect of being able to repay even in good times,” she said.
But she added: “Less well appreciated are the costs of having too little credit available.
“The point here is simply that in recognising that too much credit can be dangerous, we should not instead fall into the trap of thinking of all borrowing as illegitimate or somehow immoral,” Ms Ellis said.
“Less credit isn’t always and everywhere better.
“ The low levels of credit available in economies in the regulated era of past decades are not the benchmark we should be evaluating ourselves against now when we try to assess the risk in the system.”
“ Some activities can and should be financed with at least some debt, even in bad times – even though there are plenty of others that should not.”
Ms Ellis then said: “in their efforts to protect the real economy, policymakers need to ensure that credit is still being supplied to good borrowers even in bad times.
A healthy and resilient banking sector can help achieve that;” Ms Ellis said
“Indeed, it would be difficult to manage it without one,” she added
She said though that Australia is not facing a credit squeeze.
“Let me be clear that Australia is not anywhere near having this problem,” Ms Ellis said.
“Whatever the concerns about concentration and competition in the Australian financial system, there is plenty of finance readily available to lower-risk customers.
“ But some recent examples overseas show the damage that can be done when there isn’t enough credit available
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by Alan Thornhill
What happens now that Malcolm Turnbull has at least the 76 lower house seats that he needs to form majority government?
We can expect to see tight government, as the Prime Minister takes up the reins, to start his fresh three year term.
Not quite as tight, though, as the independent Bob Katter has suggested.
Mr Katter warned, not altogether seriously, that a government with a majority of one, might lose a critical vote, if he left Parliament to attend his mother’s funeral, or to respond to a call of nature.
That’s not a worry
Australian parliaments, thankfully, have civilised arrangements called “pairing” to deal with exigencies like these.
The Opposition Leader, Bill Shorten, though, did raise as serious matter, when he warned of divisions in the Liberal party, particularly those involving the hard right, which supported Tony Abbott against Malcolm Turnbull, last September.
They have not forgotten or forgiven.
That became clear this week, when one member, Cory Bernardi, sent e-mails to supporters, urging them not to “… allow the political left to keep eroding our values, undermining our culture and diminishing our important institutions.”
The ratings agency, Standard and Poors, delivered the biggest challenge Mr Turnbull will face late last week, though, when it put Australia’s triple A credit rating on “negative watch.”
It cited both uncertainties which then existed about the July 2 election results and high levels of both domestic and international debt.
This means that the agency might well downgrade Australia’s presently excellent credit rating, if we don’t get those issues under control, over the next two years.
An astute Prime Minister might see it as more than that, too.
A “get out of jail free card” in fact.
Even governments which want to keep their pre-election promises often find it very difficult to do so.
So what could Mr Turnbull do, if he finds himself in that all-too-likely position?
Mr Shorten warned, during that eight week election campaign, that this is no time to be giving big companies $50 billion worth of tax cuts, over 5 years, even if they are to be phased in slowly.
And a report funded by Getup and published just days before the election said big miners and cigarette companies would be among the main winners, from that policy, which Mr Turnbull repeatedly said would create more “jobs and growth.
The miners, perhaps.
The cigarette companies.
So some adjustments can be expected there.
Nick Xenophon might also be in for some disappointment when he comes to Canberra, seeking more money, to protect the jobs of steel workers, in his home State of South Australia.
Mr Turnbull might even be able to convince voters that some restraint in these areas is virtuous, as well as necessary, to avoid extra interest rate pain, for home buyers and others.
If he is astute enough.
by Alan Thornhill
The Reserve bank left interest rates on hold today, but hinted that there could be another rate cut soon.
After a meeting of the bank’s board today, its Governor Glenn Stevens noted that Australia’s inflation is low – at 1.3 per cent – and likely to remain so.
Then he added: “Over the period ahead, further information should allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate.”
Mr Stevens also said: “Several advanced economies have recorded improved conditions over the past year.”
However he added: “but conditions have become more difficult for a number of emerging market economies.
He said: “China’s growth rate has moderated further, though recent actions by Chinese policymakers are supporting the near-term outlook.”
The bank last cut its marker interest rate from 2 per cent, to a new record low of 1.75 per cent, in May.
Mr Stevens said: “Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years.”
“Australia’s terms of trade remain much lower than they had been in recent years.”
He also noted the impact of Britain’s Brexit decision to leave the European Union but said nothing about Australia’s cliffhanger election, last Saturday.
Mr Stevens said global financial markets had been “volatile recently as investors have re-priced assets after the UK referendum.
“But most markets have continued to function effectively,” Mr Stevens added.
“Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
“Any effects of the referendum outcome on global economic activity remain to be seen and, outside the effects on the UK economy itself, may be hard to discern,” he concluded.
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by Alan Thornhill
Australia’s political leaders will be hitting their phones this week, trying to scrape together enough support to give the country stable government for the next three years.
The main rivals, Prime Minister, Malcolm Turnbull, who heads a conservative coalition and Bill Shorten, who leads the Labor party both found themselves short of the 76 seats they would need, in the House of Representatives, to govern in their own right, at the end of the initial, but still incomplete, count.
Late yesterday, Labor had 67 seats, the Coalition 65, others 5 and 13 were still in doubt.
The Australian Electoral Commission had counted 78.2 per cent of the votes cast, at that point.
It will not resume the count until Tuesday, and the final result, for the House, will probably not be known until some time next week.
Mr Turnbull had made much of the need he saw for stability, during the late stages of the eight week election campaign, particularly after Britain’s vote to leave the EU.
However the swing to Labor, evident in Saturday’s election, showed that voters were more impressed with Mr Shorten’s warning that only Labor could be trusted to protect Australia’s health insurance system, Medicare.
Mr Turnbull had sought support for a plan centred on tax cuts for big companies and high income earners.
He had warned that a big spending Labor government could not be trusted to manage Australia’s economy responsibly.
And, at a news conference today, he welcomed a question from a reporter who asked him if the election result could threaten Australia’s TripleA credit rating.
He thanked the reporter and said: “This is why it is very important … for me to explain what is happening at the moment.”
“We are simply going through a process of completing a count,” Mr Turnbull said.
The Prime Minister also said that he could still form a new government, for the next three years.
However Bill Shorten greeted the initial count with a triumphal declaration.
He conceded that the public might not know the outcome of Saturday’s election : “…for some days to come.”
“But there is one thing for sure – the Labor Party is back.” he said.
But which of these two men is likely to be Australia’s Prime Minister over the next three years?
The answer to that question will depend, very much, on their relative telephone skills.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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