New figures from the Australian Bureau of Statistics show the total value of dwelling finance commitments, excluding alterations and additions, increased by a seasonally adjusted 2.3% in May.
Investment housing commitments increased by 2.4%, while owner-occupied housing commitments increased by 2.3%.
The figures also show that in original terms, the number of first home buyer commitments as a percentage of all finance commitments rose from 28.6% in April to 29.5% in May, while the number of fixed rate loan commitments as a percentage of all finance commitments increased to 6.5% from 4.2%.
The Government has dismissed calls for an inquiry into the power of the Big Four banks, after a team of six senior economists petitioned the Prime Minister and Federal Treasurer for such a scheme in an open letter.
“We believe the banks in our economy have worked very well,” Home Affairs Minister Brendan O’Connor told Sky News today.
He said the idea for a “basic bank”, in which Australians can deposit money and have it run by a Future Fund, is “not something that’s been contemplated by the Government”.
“We believe that a broad based inquiry into the integrity of Australia’s financial system is warranted,” the economists wrote in the open letter.
“The biggest beneficiaries of this chaos have been the four major banks. They receive the most favourable regulatory treatment under the existing system, which was not conceived with many of their smaller rivals, and the new markets they rely on, in mind.”
The team of economists, which includes Christopher Joye and Nicholas Gruen, currently chairman of the Government 2.0 Task Force, have said they are concerned at how banks are using Government guarantees to expand offshore, while consumers are “repeatedly told that our banks were lucky not to have had substantial overseas exposures”.
The Australian share market has opened lower today, following negative leads from Wall Street overnight.
In the US, Wall Street dropped to a 10-week low after news that a second Government stimulus package is on the cards sparked fears the economy is not performing as good as expected.
The Dow Jones industrial average dropped 161.27 points, or 1.94%, to 8,163.60. The S&P 500 Index fell 17.69 points, or 1.97% to 881.03.
Back in Australia, the benchmark S&P/ASX200 index was down 36.1 points or 0.96% to 3730.8 at 12.00 AEST. The Australian dollar also opened lower at US78c.
NAB shares jumped 1% to $21.89, while Westpac lost 0.5% to $19.01. Commonwealth Bank shares fell 0.8% to $36.89 as AMP lost 1.7% to $4.60.
Waste management company Transpacific Industries Group has downgraded its guidance for the 2009 financial year by 9% due to lower sales.
The company said earnings for interest, tax, depreciation and amortisation for the 2009 financial year are now expected to be $447 million.
“FY2009F reported EBITDA is expected to be approximately $455.7 million, including the $8.7 million profit from the repurchase of Transpacific convertible notes reported in the H12009A results,” Transpacific said in a statement to the ASX.
The company also said it is expecting to launch the equity raising section of its recapitalisation plan within the next two weeks.
NAB has appointed Peter Thodey to a new role within the bank as executive general manager specialised group assets, effective from 1 September.
The role, which will be based in London, has been described by chief executive Cameron Clyne as requiring “strong management oversight”.
“We are fortunate to have the management bench strength to dedicate someone such as Peter, with his extensive banking background and capabilities, to lead this activity,” Clyne said.
“At the recent NAB Strategy Update I said these legacy portfolios would be segregated and managed down and providing strong management oversight is a crucial part of prudently dealing with these legacy portfolios.”
Qantas Airways has now pleaded guilty to participating in a price-fixing conspiracy on cargo exported on routes to Canada between May 2002 and February 2006.
Canada’s Competition Bureau has said Qantas is the fourth carrier to be convicted in the investigation, and that it has been fined about AU$167,000.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
