Business news of interest this week

Business stories compiled by Jason Maywald.

1) plan to save tax refunds as confidence drops, Westpac survey shows

Hopes of a tax cut-led retail recovery appear dented as Westpac’s regular consumer sentiment survey shows the majority of people plan to save most of their refund rather than spend it.

The bank and Melbourne Institute added extra questions to their monthly questionnaire of consumers, asking people about the tax offset payments that came through from July 1 in tax returns.

So far, 16 per cent of those surveyed reported receiving a payment, while Westpac’s economists estimate that about 30 per cent of households are likely to receive a “meaningful” rebate.

Of those who had already received a payment, 29 per cent said they planned to spend it all, while 16 per cent planned to spend more than half of it.

That left more than half of survey respondents saying that they would spend less than half of their tax offset, with a quarter saying they would save the full amount.


2) appoints Johnston as permanent CEO

Suncorp has appointed Steve Johnston as chief executive after its former CFO impressed during his four months as interim boss.

Suncorp has appointed interim chief executive Steve Johnston on a permanent basis.

Chairman Christine McLoughlin says Suncorp weighed the merits of global and local candidates before confirming Mr Johnston as CEO and managing director.

Mr Johnston was chief financial officer until May, when he switched roles following CEO Michael Cameron’s sudden exit.

Announcing an 83.5 per cent fall in full-year profit last month, Mr Johnston admitted his predecessor’s so-called marketplace strategy had confused customers and halted its rollout to refocus on banking and insurance.

“Steve was the outstanding candidate,” Ms McLoughlin said.


3) fair? why judges have been accused of failing Australian consumers

ACCC head Rod Sims is calling for new consumer protection laws following a series of controversial court cases.

When a judge says a bank’s borrowers could afford its loans if they cut down on Wagyu beef and fine shiraz, the accusation that the judiciary is out of touch is not a hard one to make.

That was the case last month, when the federal court judge Nye Perram threw out a case brought by the Australian Securities and Investments Commission alleging irresponsible home lending by Westpac.

Consumer groups exploded, and the ruling went down badly with a regulator that had been told by the banking royal commissioner, Kenneth Hayne – himself a former high court judge – to be quicker to resort to the courts.

But it was only one of a series of cases over the past few years, dealing with everything from door-to-door vacuum cleaner salesman to health insurance, in which judges have frustrated attempts by regulators to use existing laws to protect consumers.

Now Australia’s consumer regulator has called for the law to be changed to bar companies acting unfairly towards customers, after a series of court rulings that have raised concerns judges are out of touch with community expectations.


4) AFR.comSenate creates select committee on fintech and regtech

The government wants to better co-ordinate its support of the financial technology industry, backing the establishment of a Senate select committee that will examine issues including the implementation of ”open banking” and start-up access to the real-time payments system.

The committee is expected to be chaired by Liberal Senator Andrew Bragg, who moved a motion to establish it on Wednesday afternoon. It will spend a year investigating the policy settings for fintech and regulatory technology (regtech), global developments and barriers to uptake.


5) four banks and AMP face 86 ASIC probes

The corporate watchdog is conducting 86 investigations into the big four banks and AMP, in a sign of the high potential for more lawsuits against the country’s biggest financial institutions following the Hayne royal commission.

The Australian Securities and Investments Commission (ASIC) revealed the new details of its investigatory work as Graeme Samuel, a former regulator, said financial firms should release internal reports on their governance and cultural failings or risk being the subject of public inquiries.

After the Hayne royal commission criticised ASIC for being too timid, the regulator on Wednesday said that as part of a dedicated program looking at breaches of financial laws, it had 88 enforcement investigations and 17 court actions under way at the end of July.

“Of these, 86 relate to the major banks and AMP, and their subsidiaries,” it said.