Queensland floods to result in 0.1% hit to March quarter GDP
Make us a preferred source
Make us a preferred source on Google
More news: Treasurer Jim Chalmers has warned of a 0.1% reduction in the GDP result over the March quarter due to the floods in Queensland.
Speaking after his announcement about the banking agreements, he said the flood affected region accounts for about 4% of agricultural production in Australia and the disaster in Queensland would have an economic effect.
He shared initial estimates from Treasury that suggest lost economic activity will reduce GDP by 0.1% in March quarter.
“That might not seem like a lot but at a time when growth is not especially thick on the ground in our economy that is not inconsequential," he said.
He said there could be a bounce-back in subsequent quarters from the rebuilding efforts.
“But in the context of an economy, which is already quote soft, another 0.1% of activity in a quarter … will make a difference.”
He said there would be some upward pressure on prices for some products, such as bananas and sugar, due to the impact on crops.
“Treasury estimates that up to 20% of Australia’s banana crop could be affected," he said.
“And so you can see that there might be quite narrow but significant impacts on some goods … but we don’t expect the overall impact one inflation to be substantial in aggregate.”
He said the federal government would support Queensland with the rebuilding effort and impacts to the budget would be worked through.
Big Four banks agree to pause regional bank closures
The news: The major banks have committed to a moratorium on regional branch closures for two and a half years until 31 July 2027.
The context: NAB has agreed to a new moratorium, while the Commonwealth Bank of Australia and Westpac have agreed to extend existing arrangements.
ANZ and Suncorp already have conditions imposed by the government.
The government has asked the banking sector to increase its commitment and investment in regional banking through new Bank@Post agreements. CBA, NAB and Westpac have now reached in-principle agreements and ANZ has agreed on key terms.
Macquarie and HSBC have agreed to start negotiations with Australia Post.
The Australian Prudential Regulation Authority (APRA) data released at the end of 2023 found that more than one-in-10 branches from banks, credit unions and building societies had closed during the 2023 financial year. And more than a third of regional branches had been closed since 2017.
The government is continuing to consult with the banking sector about regional Australia and the future of service provision.
What they said: "We are taking action today to arrest this decline in regional banking services," Treasurer Jim Chalmers said at a press conference on Tuesday morning in Canberra.
"We know that if we want a strong, national economy then regional Australia needs to be a big part of the story."
Chalmers said he recognised the "direction of travel" in terms of the digitalisation of services, but he wanted to make sure there were face-to-face options for those in regional areas and who needed them.
Communications Minister Michelle Rowland said the access of services in the region is critical for consumers and small businesses.
She said the government had sought to balance “support for innovation and competition in the banking sector with the need to ensure economic inclusion of everyone, irrespective of where they live”.
Australian Banking Association chief executive Anna Bligh said there would be a continued digital transformation.
“Australians are transforming the way they bank and they are doing it at an unprecedented rate … this means we’re undergoing a massive transformation in what banking looks like in this country and it’s not going to look the same in 10 years as it looks now,” she said.
She said this decision provided “much needed breathing space” to “work more carefully with government” and find new ways to service remote locations.
The source: Federal government press conference and media release
