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Over the limit: Pandemic pushes 2 million Aussies beyond credit means

SOARING unemployment and wage cuts has seen people increasingly overdrawing on their credit cards, according to Finder, Australia’s most visited comparison site.

A new Finder survey found that 15 percent of credit card holders have gone over their limit during the pandemic – equivalent to more than two million borrowers (2,113,350).

While 8 percent of card holders have paid their debt down under the credit limit,  7 percent are still currently over.

According to the Reserve Bank of Australia, the average credit limit per borrower is $9,892 and there are just over 14 million credit cards in circulation.

Official data shows credit card balances accruing interest dropped during the height of coronavirus (from $1,877 in February to $1,647 in June), yet repayments against those interest accruing balances dropped (from 103% in February to 89% in May).

Kate Browne, personal finance expert at Finder, said some Australians were entering a credit card danger zone.

“Even missing one or two payments can become a slippery slope which can spiral out of control quickly," Ms Browne said. 

“Missing payments not only adds to financial stress but can also impact your credit score. Your credit score is your financial identity and is how lenders view you. If you are missing payments your credit score and your financial credibility can be put at risk. 

“You can keep an eye on your finances and your credit score for free by downloading the Finder app,” Ms Browne said.

The research highlighted that more women (18%) went over the limit on their credit card during the pandemic than men (13%).

One in four millennials (26%) were overdrawn on their credit card at some point during coronavirus, with more than one in 10 (11%) still unable to resolve the issue.

Ms Browne said the true scale of the financial stress experienced by many Aussie adults due to coronavirus is yet to be fully felt.

“In light of proposed changes to responsible lending laws, it will soon be easier than ever for Australians to access credit – which could mean some people accumulating more debt than they can handle," she said.

“The onus will be on borrowers to provide accurate information that shows their true ability to service a loan.

“If you are struggling to make repayments, contact your bank immediately to discuss the options available to you. They may be able to organise a repayment plan to help you get your debt under control.”

Have you gone over the limit on your credit card during the pandemic?

Yes, and I’ve paid it back under the limit

8%

Yes, and I’m currently over

7%

No

85%

Source: Finder, September 2020 survey                                                         

THREE WAYS to keep credit utilisation under control:
 Impose a hard limit on your credit card account. If your provider allows you to spend over your credit limit, let them know that you want to impose a 'hard limit' on your credit card account. This means that once you reach your credit limit, any transaction that would have taken you over the limit will be declined.
 Set up online, mobile or telephone banking. You can download your bank’s app onto your smartphone and monitor your balance at any time. Lenders are required by law to notify you when you're about to exceed your limit. If you have online, mobile or telephone banking set up, your provider can send you a text notification when you're about to exceed your credit limit.
 Make more regular repayments. Even though credit card statements are only issued monthly - you can make weekly or fortnightly payments that could help you pay off debt faster.

 

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QRC welcomes BHP’s major commitment to skills, METS

THE Queensland Resources Council has welcomed an announcement by BHP for 3,500 new apprentices of which half will be based in Queensland and up to a $450 million investment in the Mining, Equipment, Technology and Services (METS) sector.

QRC chief executive Ian Macfarlane said the significant funding and training package would provide jobs and growth for Queensland’s economy as it recovers from the impacts of COVID.

“Queensland’s resources sector is the mainstay of the State’s economy because companies such as BHP invest in Queenslanders and Queensland businesses,” Mr Macfarlane said. 

“Hundreds of people in Queensland will have the opportunity to start a long and rewarding career in the resources sector thanks to BHP.

“QRC’s education arm the Queensland Minerals and Energy Academy has 75 schools across the State and teaches students trade skills. This Academy is supported by BHP who provide employees to assist teaching the students and pathways for the QMEA talent pipeline.

“Queensland METS sector is a key service provider to the resources industry and contributor to Australia’s economy supporting more than 1 million jobs.”

BHP said the almost $800 million package would be rolled out over five years:

  • An increase of 2,500 apprenticeships and traineeships through the BHP FutureFit Academy, established earlier this year, with associated spend of $300 million.
  • A further 1,000 skills development opportunities across a range of sectors in regional areas. BHP will invest $30 million and work with the Australian Government to create advanced apprenticeships and short courses in areas of potential future workforce demand.
  • $450 million to support national METS sector growth.

www.qrc.org.au

https://www.bhp.com/media-and-insights/news-releases/2020/09/bhp-apprenticeship-pledge-and-mets-business-support-package/

COVID-19 and homelessness: the evidence so far

THE House Standing Committee on Social Policy and Legal Affairs today released an interim report on its inquiry into homelessness in Australia, focusing on the impact of the COVID-19 pandemic on housing and homelessness issues.

Chair of the Committee, Andrew Wallace MP, said, "The COVID-19 pandemic arrived in Australia shortly after this inquiry commenced in February 2020. As the virus spread, the Committee quickly realised that it would have major implications for people at risk of or experiencing homelessness, and the governments and organisations who work with them."

In May 2020, the Committee called for evidence on the impact of COVID-19 on homelessness, encouraging community groups and others to share their experiences in responding to the pandemic.

By the beginning of October the Committee had received close to 200 submissions—most of which discuss the COVID-19 situation—and spoken to 40 governmental and non-government organisations at five public hearings.

Mr Wallace said, "This interim report summarises what the Committee has heard to date from a wide range of people and organisations about COVID-19 and homelessness in Australia.

"It explores the central themes of the evidence we have received including what the definition of homelessness should be, who is most at risk and the effectiveness of Government responses to homelessness during the COVID-19 pandemic.

"The Committee heard from many organisations and peak bodies who gave detailed accounts of how service providers across Australia have adapted to the crisis and have continued to deliver support to the many people who are homeless or at risk of homelessness throughout Australia at this difficult time.

"We believe that it is important to report now, so this evidence can be considered by policymakers in a timely way, even as the impacts of the pandemic continue to unfold.

"The Committee encourages the Australian Government to take this report into account as it continues to formulate its immediate and long-term responses to the pandemic," Mr Wallace said.

The Committee’s inquiry into homelessness in Australia continues. The Committee will issue a final report, addressing the inquiry’s full terms of reference and including recommendations, at the conclusion of the inquiry.

Further information about the inquiry is available on the Committee’s website.

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Committee supports suspension of Hong Kong legal treaties

A FEDERAL parliamentary committee today strongly supported the Australian Government’s actions to suspend Australia’s Extradition and Mutual Legal Assistance treaties with Hong Kong.

Report 190, released today by the Joint Standing Committee on Treaties follows an inquiry undertaken at the request of the Attorney-General, Christian Porter MP.

“The evidence gathered by the Committee establishes a strong public foundation for the actions for the Australian Government,” said Committee Chair Dave Sharma MP.

“The Committee heard the imposition by China of its National Security Law in Hong Kong has fundamentally altered Hong Kong’s status and raised serious concerns about the independence of the judiciary in Hong Kong and the continued application of the rule of law and other fundamental principles of justice. This constitutes a fundamental change of circumstances,” Mr Sharma said.

The bi-partisan committee unanimously endorsed the actions of the Australian Government to protect the integrity of its international law enforcement arrangements and uphold the rights of its citizens by suspending these two treaties.

The Committee will continue to take a close interest in political developments in Hong Kong.

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Committee supports Australia's contribution to IMF for COVID-19 fight

A FEDERAL parliamentary committee has recommended Australia commit to the International Monetary Fund’s (IMF’s) reform proposals to better combat the global economic impact of COVID-19.

Report 191, released today by the Joint Standing Committee on Treaties, supports three treaties that will give the IMF access to the funds it needs to support countries dealing with the severe economic downturn that has accompanied the pandemic.

Two of the treaties involve the direct transfer of a portion of Australia’s commitments from the third line of defence supporting IMF lending, called ‘bilateral loan agreements’, to the IMF’s second line of defence, called the ‘New Arrangements to Borrow’.

The third treaty is a commitment by Australia to the IMF’s Poverty Reduction and Growth Trust.  The Trust is already involved in supporting the COVID-19 response in lower income countries by providing the funds to purchase necessary medical equipment.

The treaties do not involve additional financial commitments by Australia.

“COVID-19 has had a massive global economic impact, and this is being felt in Australia. For Australia’s sake, we need to be doing all we can to support global economic recovery, and these reforms to the IMF will help do that,” Committee Chair Dave Sharma MP said.

In addition, the Report details the Committee’s support for a minor amendment to the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade.

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QRC welcomes CopperString 2.0 to power North West Minerals Province jobs

THE Queensland Resources Council has welcomed the Queensland Government’s announcement today of an implementation agreement for the proposed CopperString 2.0 high voltage 1100 km transmission line to the North West Minerals Province.

QRC chief executive Ian Macfarlane said the progress of CopperString 2.0 was part of the Resources Industry Recovery Agenda presented to the Government by QRC-AMEC in June.

“The North West Minerals Province is a key area of development for Queensland’s resources sector and its development will help deliver the strongest possible recovery from COVID-19,” Mr Macfarlane said.

Mr Macfarlane said the Queensland Government’s announcement of an implementation agreement follows the Australian Government’s commitment in its Budget last night to provide funding to progress a final investment decision for the project.

“The QRC, as the peak representative for the state’s coal, metals and gas explorers, producers and suppliers, was involved in the development of the State Government’s Strategic Blueprint for Queensland's North West Minerals Province,” he said.

The Blueprint highlighted: “Common user infrastructure provides the opportunity to drive down development costs for individual projects, with multiple users contributing to the development of, and benefiting from key forms of infrastructure required for mining and other projects. This may include transport infrastructure such as road, port and rail, utilities such as electricity, gas and water, or other types of minerals processing infrastructure”.

“Energy costs for the existing mineral producers in the region are amongst the highest in Queensland,” Mr Macfarlane said.

“CopperString 2.0 also promises to unlock some of Queensland’s most prospective renewable energy generation sites.”

www.qrc.org.au

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Committee meeting to focus on the national capital

THE Joint Standing Committee on the National Capital and External Territories will be briefed tomorrow by the National Capital Authority about issues relating to the nation’s capital.

The re-scheduled briefing will be broadcast live on the Parliament House website.

Committee Chair, Anne Webster MP said: “The Committee welcomes the opportunity to hear from the National Capital Authority about its role as custodian of the National Capital Plan and caretaker of the special character of Canberra as the nation’s capital.

“The Committee looks forward to discussing a range of matters during the briefing and being updated on the latest developments,” Dr Webster said.

Further information may be found on the Committee’s website.

Public hearing details

Date: Thursday 8 October 2020
Time: 11am to 11:45am

The hearing will be broadcast live at aph.gov.au/live. Due to the COVID-19 pandemic, committee hearings are not presently open for physical attendance by members of the public.

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Inquiry into food insecurity in remote Indigenous communities holds additional hearings

THE INQUIRY into food pricing and food security in remote Indigenous communities is holding further public hearings this week on Thursday October 8 and Friday October 9.

The Eon Foundation will be appearing on Thursday and the National Indigenous Australians Agency (NIAA) will appear on Friday, followed by Outback Stores.

Julian Leeser MP, Chair of the House of Representatives Indigenous Affairs Committee, said the Eon Foundation would provide valuable insights into local food production in remote areas and that the Committee looked forward to continuing its discussions with NIAA and the Commonwealth-owned Outback Stores, who appeared previously for the inquiry in June, on possible solutions to food insecurity in remote First Nations communities.

“Market gardens and other avenues for remote food production have had mixed success in the past. We look forward to discussing this with the Eon Foundation who provide nutrition and horticulture education and training to 37 communities across Western Australia and the Northern Territory," Mr Leeser said.

“Our second hearing this week with the NIAA and also with Outback Stores will allow us to further explore some practical responses and possible policy solutions to the food insecurity issues facing many Indigenous people.”

The witnesses will be appearing by videoconference or teleconference due to social distancing requirements relating to COVID-19. Full programs are available from the inquiry website.

Public hearing details

Date: Thursday, 8 October 2020
Time: 11.45am to 12.30pm AEDT
Location: Via video and teleconference

Date: Friday, 9 October 2020
Time: 9.30am to 11.45am AEDT
Location: Via video and teleconference

Audio broadcasts will be accessible at aph.gov.au/live.

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Consumer Engagement Award finalists announced

ENERGY NETWORKS putting customers at the centre of their business have been shortlisted for the 2020 Consumer Engagement Award. Shortlisted organisations include Australian Gas Infrastructure Group, AusNet Services, Evoenergy and Jemena Electricity Network.

Energy Consumers Australia Interim CEO Lynne Gallagher said the 2020 entries showed networks were taking steps on a range of engagement activities, demonstrating the maturing of consumer engagement within many businesses.

“We are seeing an uplift and commitment to working directly with customers by many network businesses, exploring new ways to deepen engagement and collaboration with consumers in the face of new challenges such as COVID-19 and extreme weather events,” Ms Gallagher said.

“The award shines a light on best practice engagement activities across the energy network sector and we hope many of these good practices become common practice by sharing knowledge across the sector.”

Energy Networks Australia CEO Andrew Dillon said the consistently high standard of entries to this year’s awards showed continual improvement by networks in their engagement practices.

“It is encouraging to see how every year networks are stepping up with new projects and engagement to deliver improved services and benefits to customers,” he said.

The winner will be announced in October. All 15 nominations will be published in a report to celebrate the consumer engagement work being done by energy networks across the nation.

The reports from last years' nominees can be accessed in the Consumer Engagement report. 

www.energynetworks.com.au

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CFMEU and ACA urge reforms to spark housing construction boom

THE CFMEU and the Australian Constructors Association are calling for targeted reforms to drive construction in Build-To-Rent and social housing to stimulate the economy and boost jobs ahead of the Federal Budget.

The peak construction industry groups are also warning that moves to allow people to further drawdown on their superannuation savings could weaken investment in the nation's vital construction industry as it recovers from the economic shock of the pandemic.

Reforms to enable Build-To-Rent construction projects could boost the economy by $10 billion, create up to 23,000 jobs, and build 20,000 homes over the next four years. This would help offset a continued downturn the industry is expecting in the construction of apartments and student accommodation.

Build-To-Rent is a big part of the rental market and commercial construction sector in North America, Europe and Asia which helps sustain development of large-scale affordable housing.

However, in Australia, a raft of state and federal tax rules act as a barrier to investment. In particular, the application of GST is uneven between apartments sold to individuals and apartments built to rent by the developer.

Reforming the GST rules for BTR construction projects and coordinating with the National Cabinet to reform State and Territory rules would enable investment in a range of shovel-ready projects across the country.

Along with increased social housing, these measures would provide homes for people who need them and create tens of thousands of jobs.

A recent report by construction giant and ACA member Multiplex estimates that changes to the rules around GST and other tax measures on Build-to-Rent projects would boost the Australian economy by up to $10b, potentially create 23,000 jobs, and build 20,000 new home around the country over the next four years.

The Federal Government can also enact reforms that give the green light to Australia's $2 trillion superannuation sector to more easily invest in nation-building stimulus projects such as the construction of Build-To-Rent homes and social housing.

The Federal Government must also be wary of the unintended consequences of encouraging further drawdowns on people's retirement savings, which could affect the capacity of super funds to invest in non-liquid assets like the large-scale construction projects the economy will need in coming years.

In particular, the use of superannuation for housing deposits is poor public policy and goes against the concept of super as a long-term investment for people's retirement security.

The construction industry has worked hard to maintain its role as a principle driver of the Australian economy through the pandemic crisis. Builders and unions have worked together in the national interest to keep the industry going, to keep people in jobs, and to ensure that construction maintains its role at the heart of our economy.

The government can assist by enacting these reforms that will free up investment to boost the industry and help build the homes that the Australian people need.

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QRC welcomes Premier's 'no deals' promise ruling out power-sharing with Greens

THE Queensland Resources Council has welcomed Premier Annastacia Palaszczuk’s promise to 'no deals', ruling out a power-sharing alliance with the Greens to stay in office after the October 31 State Election.

QRC chief executive Ian Macfarlane said while the QRC would continue to warn Queenslanders about the risk to jobs of voting for or preferencing the Greens right up until 6pm on election night, the Premier’s promise – ruling out a Labor-Greens alliance in government - was "very welcome news for the resources sector and for Queensland".

“The Greens have made it clear they are against new mining projects and want to put an end to the existing mining and gas industry, terminate existing mining leases in the Galilee Basin and increase royalty taxes on resources, which will stop future jobs being created,” Mr Macfarlane said.

“Queensland needs the resources sector and the 372,000 jobs it supports more than ever during its recovery from COVID-19. The Greens want to stop jobs in our sector and others,” he said.

“We cannot afford to surrender jobs when tens of thousands of Queensland men and women are out of work and unemployment is forecast to keep rising to 9 percent later this year.”

Queensland’s resources industry contributed $63 billion in export dollars to the state economy last year and $5.3 billion in royalty taxes to help fund government services such as nurses, doctors, teachers, roads, schools and hospital and health facilities throughout the state.

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