Latest news with #GuyDebelle
ABC News
13-07-2025
- Business
- ABC News
Another economist warns about intergenerational wealth in Australia
Why are more economists talking about Australia's intergenerational wealth challenges? Guy Debelle, a former Reserve Bank deputy governor, joined the fray last week. In a speech in Sydney, he said one of Australia's big challenges, in the next decade or two, will be managing the huge transfer of wealth that will have to occur from older generations to younger. "Superannuation and housing are possibly the ultimate embodiment of intergenerational issues in this country," he said, as reported by the Australian Financial Review. Dr Debelle was talking about an issue the Productivity Commission raised in 2021. In its 2021 report, "Wealth transfers and their economic effects," the commission said Australian had experienced strong growth in household wealth over the last 20 years, but it had been very uneven. "The wealth of the average older Australian has grown remarkably since the turn of the century," it said. "Retirees in particular have seen disproportionately strong growth in their wealth relative to younger people. "Indeed, at a time where one would expect retirees to be drawing down on their wealth to fund consumption, their wealth has actually increased." The commission said housing wealth was driving the phenomenon, along with growth in superannuation balances. "Older age groups own more housing wealth, they draw down on that housing wealth slowly, and they inherit large housing wealth from their partners in old age," it said. The below graphic, from the commission's report, showed what happened to real house prices in Australia between 1970 and 2018, relative to incomes. The report said while trillions of dollars in wealth would transfer from older Australians to younger Australians in coming decades, the timing of the wealth transfer could create its own challenges. "By the time people receive an inheritance, they will be well into middle age — about 50 years old on average — already established in their careers and housing, and many will potentially be nearing retirement themselves," it said. It kickstarted a national conversation about the need for wealth transfers to take place sooner, about the social benefits of older Australians downsizing their homes in retirement, and about the tax system generally. But that was four years ago, and house prices have soared (again) in the meantime. So in July last year, JBWere updated the numbers in that 2021 commission report to account for the growth in asset values that has occurred since. The commission report had referenced research from 2017, estimating that older Australians would transfer $3.5 trillion to younger generations over the next 20 years. But according to JBWere, that figure now stands at $5.4 trillion over the next 20 years. Its report revived questions about Australians receiving large inheritances so late in life, and how our tax system and housing situation were contributing to the phenomenon. It said the value of inheritances, and the age of receipt of inheritances, both peaked about 60 years of age. "This increased age of receiving an inheritance can be traced back to the rise in the average age of having children and increased life expectancy," the JBWere report said. "It does, however, raise the question of the need of recipients at this stage of life, compared to either earlier years (Bank of Mum and Dad) or for some bequests being directed elsewhere where greater need exists." At the beginning of last year, the former Treasury secretary Ken Henry had also warned that our tax system had deteriorated to the point that he was worried about Australia's "social compact" holding together. He said housing, the state of climate policy, and the commonwealth's over-reliance on taxing workers' incomes were three areas of major policy failure. "It's an intergenerational tragedy that we have allowed this to happen," he lamented. And last week, Dr Debelle also linked Australia's housing and tax situation to global economic trends. He said the political problems we're seeing in so many countries, and the "quackery" that's underpinning some current economic policies (such as Donald Trump's tariff policies) were symptoms of a larger problem. "One of the root causes of where we are today — particularly in the US, but it's also true in many other countries — has been the failure to distribute the gains from economic policy changes," he warned. Then on Friday, Cotality released its latest "Housing Chart Pack" data. It showed property values in nearly half of Australia's suburbs were sitting at record highs at the end of June. In Brisbane, almost 80 per cent of its suburbs had record-high property prices. In Perth it was a similar story. CBA's economics team said the upward momentum in property prices since mid-February had been fuelled by the Reserve Bank's interest rate cuts this year. The latest Westpac-Melbourne Institute consumer sentiment survey also showed that house price expectations jumped by 7 per cent in June, to its highest level since 2013. It showed over three quarters of consumers now expect property prices to rise over the next 12 months, especially in Queensland and NSW. But it said those expectations for property price increases weren't exactly filling Australians with confidence. "Despite this positive outlook for house prices, consumers remain relatively averse to real estate as an investment option and to risk in general," Westpac's Matthew Hassan said. "Indeed, responses to our quarterly question on the 'wisest place for savings' suggest that the tariff-related turmoil this year has seen what was already a high level of risk aversion intensify even further. "Consumers still heavily favour 'safe options' with 55 per cent nominating either 'bank deposits' or 'pay down debt' as the wisest place of savings, up slightly from 52 per cent in March. "Interest rate cuts have done little to shift these views so far," he said. It's a familiar dynamic. The majority of people expect property values to keep rising, and those price increases will keep boosting Australia's household "wealth". But will it be good for the Australia's younger generations? What's the end-point in all of this?
AU Financial Review
07-07-2025
- Business
- AU Financial Review
Debelle gives economists an almighty pep talk, and a word of warning
Guy Debelle is not your typical economist. The punk rock and AFL fan spent the best part of his working life at the Reserve Bank of Australia helping to set interest rates and was on the front line of the harrowing global financial crisis in 2008 and the COVID-19 pandemic in early 2020. That has meant he's had to apply his economics skills in the real world, at times in extreme scenarios with consequences for the welfare of millions.
Yahoo
27-06-2025
- Business
- Yahoo
Australia's Securities Regulator to Probe ASX After Collapsed Blockchain Project
Australia's Securities and Investment Commission (ASIC) has turned to three of the country's most seasoned finance figures to probe the inner workings of the Australian Securities Exchange, including the exchange's doomed blockchain project. ASIC launched the inquiry on June 16 over 'ongoing concerns' it and the Reserve Bank of Australia expressed about the exchange's ability to run stable and secure market plumbing. Those concerns intensified when ASX scrapped a blockchain-based upgrade to its CHESS settlement engine in 2022, forcing a costly reset and drawing political heat. ASIC later sued ASX over making misleading statements on the project. Rob Whitfield, a former Westpac chief risk officer and now a Commonwealth Bank director, will chair ASIC's panel. Joining him are Christine Holman, who sits on the boards of utility AGL and restaurant operator Collins Foods, and Guy Debelle, a Reserve Bank of Australia's former deputy governor. The trio will inspect ASX's governance, technical capability, and risk controls and recommend fixes for any weak spots. Their brief stretches across the entire ASX group, which handles more than A$6 billion ($3.92 billion) in trades each day.
Business Recorder
26-06-2025
- Business
- Business Recorder
Tech stocks drag Aussie shares lower as markets assess Xero's Melio deal
Australian shares slipped on Thursday, pulled down by tech stocks as IT major Xero dropped after announcing a deal to acquire U.S.-Israeli payments provider Melio Payments and a discounted share placement to fund it. The S&P/ASX 200 index lost 0.1% to 8,553.30 points by 0104 GMT. The benchmark had ended largely unchanged on Wednesday. Technology stocks on the local bourse dropped 2.7%, led by a 7% decline in accounting software major Xero when it resumed trade on Thursday, a day after announcing it would buy Melio for as much as $3 billion. The company with A$30 billion ($19.57 billion) market capitalisation asked institutional investors for A$1.85 billion to help pay for the purchase, with the placement representing a 9.4% discount to Tuesday's close. Xero went on a trading halt before markets opened on Wednesday, pending the announcement of a 'corporate transaction and an associated equity raising'. The deal was announced soon after. Analysts have given the deal a cautious endorsement. 'Xero's acquisition of Melio… comes with short-term earnings dilution, integration risks and heightened exposure to a competitive and evolving U.S. fintech landscape,' said Mark Gardner, CEO and Head of Equities Advisory at MPC Markets. Australian shares flat as banks offset mining drag; inflation data eyed Jefferies reduced its target price for Xero to A$176.90 from A$194.80, citing that Melio would still be '-12% dilutive to earnings on a per-share basis in FY28'. Bucking the trend, miners gained 0.3% as copper prices rose, supported by a tentative ceasefire between Iran and Israel. BHP and Rio Tinto added 0.4% and 0.2%, respectively. In company news, Australia's securities regulator appointed former central bank deputy governor Guy Debelle to an expert panel to investigate ASX's governance, capability and risk management frameworks. However, the bourse operator's stock rose 0.3%. New Zealand's benchmark S&P/NZX 50 index fell 0.2% to 12,432.41 points.
Reuters
26-06-2025
- Business
- Reuters
Australian regulator names former RBA deputy governor to ASX probe panel
June 26 (Reuters) - Australian regulator said on Thursday it has appointed former central bank deputy governor Guy Debelle to a three-member expert panel to investigate the local bourse operator ASX's ( opens new tab governance, capability and risk management frameworks. This appointment follows the Australian Securities and Investments Commission's (ASIC) launch of a broad investigation into ASX last week. ASIC has also appointed Rob Whitfield as the panel chair, with Christine Holman joining as a panel member alongside former Reserve Bank of Australia deputy governor Debelle. Whitfield currently serves as the independent non-executive director of Commonwealth Bank ( opens new tab, the largest-listed company on the ASX, while Holman is the non-executive director of Australian firms AGL Ltd ( opens new tab and Collins Foods ( opens new tab. "The inquiry panel will be asked to make recommendations to address any identified shortcomings or deficiencies in relation to governance, capability and risk management within ASX group," ASIC said in a statement. The inquiry panel is also expected to submit a report to ASIC by March 31, 2026, outlining its findings and recommending any necessary next steps for the regulator to take. ASX did not immediately respond to a Reuters request for comment. ASIC's probe into the country's main stock exchange operator escalated tensions that have simmered for years amid a botched software upgrade and a series of trade-processing glitches. After facing delays, expenses and mandatory industry consultations, ASX abandoned its original upgrade plan in 2022. The following year, it brought on India's Tata Consultancy Services to develop a new, phased upgrade. According to ASX, the first part is scheduled for delivery in 2026. ASX also attempted to rebuild its clearing and settlement software platform with custom blockchain-like technology from 2017.
