Compare Credit Cards
- Credit Cards Home
- Balance Transfer Rate
- Low Interest
- No Annual Fee
- Reward Credit Cards
- Business Credit Cards
- Gold & Platinum
- Debit Cards
Compare Banking
Compare Loans
Compare Insurance
- Insurance Home
- Health Insurance
- Home Insurance
- Life Insurance
- Motor & Bike Insurance
- Travel Insurance
Investment Providers
Links
Treasury Secretary Henry To Step Down Next Year
Prime Minister Julia Gillard says that Treasury Secretary Ken Henry will leave his post in the new year and will be replaced by Martin Parkinson on March 7th 2011.
Dr. Parkinson who has previously served as deputy secretary in the Treasury, is assuming the top civil service job in the Treasury after heading up the Department of Climate Change, a role he has had since December 2007.
Dr. Henry was first appointed as Treasury Secretary in April 2001 and was re-appointed when his first term expired in April 2006.
“He has been instrumental to the development of taxation policy over a long period of time, not least with his work on the review of Australia’s future tax system and to the public service in general,” Ms Gillard said.
“More generally, Dr Henry has made a major contribution to the well-being of Australians and the prosperity of the nation during his more than 25 years at Treasury, during 10 of which he has been secretary.
“He has become one of the greatest of all Treasury secretaries.”
Compare Australian Business Credit Card Deals
Proposal To Give Shareholders More Power Over Executive Pay
A new set of proposals introduced by the Federal government will give shareholders far more power over the level of executive pay packages.
According to the proposal, shareholders will now have the option of voting out company directors if at two or more consecutive annual general meetings 25 per cent or more of shareholders vote no to the company’s compensation report.
After the second vote a resolution that if supported by the majority of shareholders can force the company to remove the director at following meetings.
According to David Bradbury parliamentary secretary to the treasurer, company directors need to be held accountable to shareholders for the composition of executive compensation.
“Shareholders take on the risk of investing capital and share in the company’s profits and losses. As the owners of a company, they deserve more say over the remuneration of company executives. The reforms are also designed to ensure that executive remuneration remains closely linked to the performance of a company.” Mr. Bradbury said in a statement.
The government plans to introduce the bill to parliament in the first half of 2011 with an intended start date of July 1.
Compare Australian Home Loan Deals
Central Bank And Banking Regulator Establish New Facility For Lending To Australian Financial Institutions
The Australian Prudential Regulation Authority and the Reserve Bank of Australia are set to establish a set of new procedures that will enable Australian financial institutions to borrow money during emergencies.
APRA and the central bank announced the new system in response to proposals for banking reform made by the Basel Committee for Banking Supervision (Basel III).
The new system would have the central bank provide financial institutions with contingency loans that would bridge any shortfall they face between quality liquid assets which include government bonds, and the new liquidity requirements imposed by (Basel III).
According to a joint statement released by the banking regulator and the central bank, financial institutions will have to place collateral such as assets which can be used for repurchase agreements with the central bank, and also pay the RBA a fee for use of the facility.
All financial institutions will face a single fee for access to the facility, which will be levied regardless of whether they ultimately end up drawing on the facility.
The system has been designed to encourage financial institutions to manage their liquidity prudently by holding high quality assets such as government debt.
The Basel committee has designed its regulations in response to the liquidity crisis face by many banks, when credit markets globally froze at the height of the financial crisis.
The committee is seeking to ensure that financial institutions have enough high quality liquid assets to withstand acute stress for at least one month.
Typically high quality liquid assets in developed countries imply government debt, however because the Australia government has in fact paid of much of its outstanding debt, there simply is not enough paper for banks to hold as liquid assets.
Australia also lacks enough high quality non bank corporate issues to fulfil its Basel III requirements.The RBA and APRA’s approach will apply to around 40 of Australia’s largest banking institutions.
Compare Australian Car Loan Deals
Businessman Says Australian Super Rich Are Appalling And Greedy Scrooge’s
Businessman Dick Smith has branded Australia’s super wealthy as being “appalling and greedy” after many refused to donate 20 per cent of their income to charity for the holiday season.
Mr. Smith was particularly scathing of bank bosses, all of whom he wrote to a couple of weeks ago urging the chief executives of Australia’s four largest banks to donate a fifth of their income.
As of Tuesday morning none had pledged their support.
The only bank boss that responded to Mr. Smith’s letter was CBA chief Sir Ralph Norris, who wrote back telling Mr. Smith who runs the electronics retailer that bears his name that he donates to charity privately.
“What’s disgusting is there are some incredibly wealthy people around, people who are billionaires. People who are worth well over a hundred million dollars – for some reason they don’t give anything. The press release I sent out mentions how our wealthy are appalling and greedy. And that’s pretty right.” Mr. Smith told reporters at Sydney’s Wayside Chapel for the homeless on Tuesday.
Mr. Smith added that the American super-wealthy donated much more than their Australian counterparts, and that good things would come to those who give to charity.
“If they were giving their money away, it’s amazing what happens with karma. The right things would happen for them,” Mr. Smith said.
The retail baron said that most of his wealth friends were miserable, and he himself had been giving away “well more than 20 per cent” of his own income for over fifteen years now.
Sydney’s Exodus Foundation a charity which provides aid to the poor and run by the Reverend Bill Crews said that a $1 million donation would provide a new lease on life for as many as 80 children.
“For them the whole world would change. What a lot of these wealthy people don’t see is that in giving you do change the world,” Mr Crews said.
The global financial crisis had made rich people more likely to hold onto their money, he added.
Compare Australian Credit Card Deals
RBA Says Decision To Hold Rates Driven By Restraint In Consumption And Borrowing
According to the minutes of the most recent board meeting of the Reserve Bank of Australia, the decision by the central bank to hold interest rates steady was driven by restrain in both household consumption and borrowing.
The notes from the meeting however failed to indicate the central bank’s bias on interest rate policy over the next few months and only suggests that the RBA was content with the current interest rate level.
At the start of the month the central bank chose to hold interest rates steady at 4.75 per cent, having lifted the rate from 4.5 per cent in November.
“Employment growth remained strong and the expected pick up in private investment looked to be broadly on track,” the minutes said.
The central bank governing board took note of the fact that despite confidence in the Australian economy, consumption and borrowing remained restrained whilst the household savings rate has risen.
“This restraint, if it continued, would provide some scope for investment to rise without causing aggregate demand to grow too quickly and inflationary pressures to build.”
In maintaining the interest rate at its current level, the RBA considered the impact of the high value of the Australian dollar and interest rate rises by commercial banks.
“Following the board’s decision in November, the decision to lift the cash rate and the subsequent increases in lending rates, and taking into account the level of the exchange rate, monetary policy was judged to be mildly restrictive. Given the very high level of the terms of trade and the positive outlook for business investment, this policy setting was regarded as appropriate.”
Compare Australian Business Credit Card Deals
ANZ Boss Mike Smith Latest Banking Chieftain To Rail Against Bank Bashing
Mike Smith, chief executive of Australian banking major ANZ is the latest banking chieftain to rail against bank bashing, once again justifying ANZ’s interest rate policy as one being driven by the “permanently higher” costs of doing business.
Mr. Smith made his comments during the lenders annual general meeting last week and followed similar comments made by ANZ chairman John Morschel who defended ANZ’s decision to lift its interest rates by 120 basis points over and above official interest rate rises since the start of the global financial crisis.
“We believe our mortgages are fairly priced in line with costs and risks,” Mr Morschel said.
Mr. Smith, who made an appearance before the Senate inquiry into competition within the banking industry last week warned of the negative consequences of populist backlash against Australia’s most successful industries including mining, telecoms and banking.
“We support practical measures which will increase competition and consumer choice, without increasing the cost of banking. We also believe it’s important to have a discussion where facts and sound analysis are put on the table, not opinions and empty rhetoric. A critical issue that we have to face up to is the fact that banks now have permanently higher funding costs.” he said.
Mr. Smith also warned that it was apparent that the global economy still faced substantial risk for the recent instability in the Euro Zone region, and re-iterated Mr. Morshcel’s view that whilst the pace of Australian economic expansion was likely to be faster than other developed countries, it was still subject to similar volatility as the US and Europe.
“This includes potential volatility in our funding costs,” Mr Smith said.
Compare Australian Home Loan Deals
ANZ Chairman Says Australian Economic Recovery To Be Volatile
ANZ chairman John Morschel says that he believes that Australia’s economic recovery is set to be as volatile as anything in the United States and Europe.
Mr. Morschel made his comments during the lenders annual general meeting and added that issues stemming from global financial crisis would continue to resonate throughout the global economy.
The ANZ chairman said that whilse he expects the pace of Australian economic recovery to be faster than it peers, it was likely that the country will face a similar kind of volatility experienced by the US and Europe as they work through their issues.
“This includes potential volatility in our funding costs. The immediate dangers from the global financial crisis have not passed. Although the euro zone seems set to survive, confidence in the EU as a political union continues to erode, and…European banks will need to continue to shore up their balance sheets.” Mr. Morschel said at the AGM.
According to ANZ, Asia ex Japan is expected to expand by about 8 per cent during 2011, which is in stark contrast to the nearly anemic less than 2.5 per cent expected in Europe and the US.
“Australia is expected to continue to perform well, and in New Zealand the recovery is gathering momentum. But with the global economic growth likely to be soft over the medium term, the environment will remain challenging to navigate.” Mr. Morschel said.
The chairman once again said that funding costs have risen post financial crisis and that these costs made it difficult for ANZ to balance its commercial obligations with the expectations of its customers and the community.
Against that backdrop Mr. Morschel warned that populist driven policy on banking competition would be harmful to the Australian economy.
Compare Australian Car Loan Deals
NAB Chairman Says Political Bank Bashing Unfair
Australian banking major NAB says that the political backlash against lenders for lifting their interest rates beyond official rate hikes is both unjustified and unfair.
NAB’s Chairman Michael Chaney, speaking during the lenders annual shareholders meeting said that the banking industry was a major contributor towards helping reduce the government deficit, having paid the federal government approximately $5 billion in fees for access to the federal government wholesale funding guarantee.
“$5 billion is a very, very material amount that is contributed to the government’s coffers,” Mr Chaney said.
Mr. Chaney’s main argument is that political criticism of the banking industry is unfair given it will enable Julia Gillard’s government to return to a surplus and that the backlash against its interest rate decisions were unwarranted.
“Such criticism is unjustified and unfair. Funding costs for all Australian banks have been high and lending rates have had to rise accordingly. The official cash rate set by the Reserve Bank is only one factor in the costs of borrowing.” he said.
Shareholders of NAB were told by the chairman during the meeting, that the banking industry was in fact adequately competitive despite the current focus of the government to stimulate increased competition through banking reform proposals.
“The premise that the Australian sector is less competition now than before the global financial crisis is false, it’s a fiercely competitive industry.” he said.
This week, senior executives of all four major Australian lenders have appeared before a Senate inquiry into the banking sector against the backdrop of federal Treasurer Wayne Swan unveiling his package of banking reforms of Sunday.
Compare Australian Savings Accounts Deals
CBA Tech Glitch Sparks Fears Of NAB Style Crisis
Australian banking major CBA has become the latest lender to face technology problems after revealing that it had faced account processing problems on Tuesday, which disrupted its ATM network and wiped customer accounts. CBA says the problem has been resolved.
CBA said the reason behind its issue was similar to the reason behind last month’s problems faced by NAB, which was caused by a file processing error.
The lender confirmed on Tuesday that the error had resulted in “minor, short-term disruption to CommBiz and NetBank customers.”
Shortly after 1 pm the bank said: “The file has now completed processing, all accounts are now up to date and there is no impact to our online channels.”
The technology problem raised fears that CBA customers would face a similar experience to NAB customers, who for nearly a week were unable to withdraw money from ATM’s and saw errors in their balances as a result of duplicate transactions.
NAB’s issues resulted in the lender facing thousands of compensation claims from customers who were left without access to their funds for days.
According to CBA, its issue only affected roughly 5 per cent of its customers, most of which were business accounts. The lender offered an apology and asked customers who felt they had incurred costs as a result of the error to contact the bank for reimbursement.
The Commonwealth Bank said that its problem affected around 5 per cent of its customer accounts, most of which were business customers.
Compare Australian Credit Card Deals
Aussie Loan Chairman Symond Says Banking Reform Proposals Pathetic
John Symond chairman of non bank financial lender Aussie Loan has criticized Federal treasurer Wayne Swan’s proposals for banking reform designed to stimulate competition within the industry as being pathetic.
Mr. Symond who was appearing before the Senate inquiry into the banking industry accused the government of a policy of traditionally favouring major lenders over non bank financials.
Mr. Symond who sold a 33 per cent stake in Aussie to CBA in the immediate aftermath of the global financial crisis was forced to defend his decision against recrimination that the deal resulted in less competition within the banking sector.
Commenting on the reforms proposals, Mr. Symond said the initiative of spending $4 billion buying up Residential Mortgage Backed Securities amounted to little more than “chicken feed”, which would barely “touch the sides”.
Mr. Symond said he believed that the government needed to spend at least $30 billion a year to facilitate better access to finance for non bank lenders.
“It’s disappointing that the Treasurer has failed to consult with the sector that bought competition into the market — the non-bank lenders. It’s the non-banks which have been shut out of the funding environment. There’s nothing in these initiatives that help those that bought competition into the marketplace. It wasn’t the banks or the mutuals that bought in competition. The suggestion that the mutuals can become a fifth force is a joke. They are small corner stores.” Mr. Symond said.
After facing tough questions from Labour senators, Mr. Symond was forced to defend his decision to sell a stake in Aussie to CBA in 2008, which the senators said had the effect of reducing the level of competition within the banking industry.
The Senators suggested that Mr. Symond lacked credibility in advocating for the non bank lending sector given CBA’s 33 per cent stake in Aussie.
“Where’s the money? It’s in my bank account . . . I built the business up over 19 years. When you sell your house, do you give the money to charity? I wouldn’t ask you what you sold your house or what you sold your car for.” Mr Symond said.