Trending Financial News 25 September 2019

Big banks cut savings rates

ANZ Bank has cut savings account interest rates by 0.10 per cent. Westpac announced a cut of 0.10 per cent last Friday. Also this week, Commonwealth Bank has sliced rates on some term deposits.

Base rates on introductory rate savings accounts offered by the big four are now 0.15 per cent or lower. Vadim Taube, CEO of InfoChoice said savers need to be aware that many accounts feature bonus rates that only last a few months.

“Savers need to be actively managing their money to ensure they are staying ahead of inflation.”

Compare savings accounts from Australian banks, credit unions and other financial institutions at InfoChoice.

October rate cut is a live option

A rate cut next week looks almost certain. RBA governor Philip Lowe told an audience in regional NSW last night that “an extended period of low interest rates will be required”.

Dr Lowe said the Reserve Bank board “is prepared to ease monetary policy further if needed to support sustainable growth in the economy, make further progress towards full employment, and achieve the inflation target over time”.

Futures market trading indicates a strong expectation that the RBA will cut rates to 0.75 per cent next Tuesday 1 October. Read more about the outlook for interest rates in Australia for 2019 and 2020 at InfoChoice.

Businesses are looking beyond their own bank for loans

Small and medium sized businesses are turning away from their banks and looking for loans and finance elsewhere according to new research from business finance company Scottish Pacific.

The proportion of small and medium sized business owners who say they are planning to borrow from their main bank has fallen from 38 per cent in 2014 to just 18.3 per cent in 2019.

18.7 per cent say they would actually prefer a non-bank lender. Just 2.6 per cent said would not use a non-bank lender for business finance. The key reason for preferring a non-bank is to avoid having to offer property as security.

One in five business owners report having had a loan application knocked back. Compare business loans and business finance options from Australia’s banks, credit unions and non-bank lenders at InfoChoice.

PayPal to be audited over criminal payments

PayPal Australia is being audited by the Australian government’s financial cybercrime watchdog, AUSTRAC, over concerns PayPal is being used by serious criminal groups.

PayPal has been ordered to appoint an independent auditor to assess its transaction reporting and record keeping after PayPal self-disclosed gaps in its reporting of international funds transfers.

AUSTRAC chief executive Nicole Rose told the ABC that the auditor will determine if self-reporting is working in online payments.

“We are really pleased that there are all of these entities that are disclosing failures in their reporting and we’re working with them,” said Ms Rose, “But that’s why we want to get the auditor in, to really see what sort of risks there have been and there continue to be.”

The PayPal action from AUSTRAC follows orders issued to buy now, pay later pioneer Afterpay in June.

Centrelink Robo Debt collector under investigation by ACCC

A debt collection company contracted by Centrelink (Dept of Human Services) is wholly owned by another debt collection company that is currently facing court action over alleged coercive and unconscionable practices.

ARL Collect was granted a $3.3 million contract to chase Centrelink debts weeks before its’ parent company Panthera Finance was issued with legal proceedings from the Australian Competition and Consumer Commission.

The ACCC alleges Panthera coerced money from people who did not actually owe a debt. Panthera was acting for utility companies such as AGL, Origin Energy and Telstra, iTNews reported this morning.

The doctor orders higher wages

The Reserve Bank governor Dr Philip Lowe has again effectively called for government and employers to deliver wage rises. Speaking to an audience in regional NSW, Dr Lowe indicated that the RBA had been surprised by a much lower rate of economic growth than expected last financial year.

In the 12 months to June 2019, Australia’s GDP grew by 1.4 per cent. Dr Lowe said “It remains the case that a sustained pick-up in household spending will require faster growth in household incomes than we have seen over recent times.”

Read more about the outlook for interest rates in Australia for 2019 and 2020 at InfoChoice.