ABA CEO Simon Birmingham transcript of interview on ABC Radio Brisbane with Steve Austin

E&OE
Radio Interview
ABC Brisbane
3 February 2026

Topics: RBA interest rate decision; Access to credit cards; Armaguard and cash usage

Steve Austin (Host): Well, why is it near impossible to obtain a credit card when you’re over 60? My guest is the new Chief Executive for the Australian Banking Association, Simon Birmingham. Former federal liberal politician, Simon Birmingham, good morning to you.

Simon Birmingham (Guest): Good morning Steve. Good to speak with you again.

Steve Austin: I have to ask you. I think you just heard a list of complaints about how politicians are not accountable for spending money. Any observations you can draw on that time in Birmingham?

Simon Birmingham: Well, Steve, I certainly look back on my career, or I certainly tried to front up and explain, I finished up my time in government as finance minister, and I certainly know that there was much angst at that time as I sought to make sure that we navigated our way out of COVID, brought down all of the temporary spending measures that have been put in place to see the country through that COVID time. It’s a tough job that any treasurer or finance minister have when it comes to setting the budget and ensuring those priorities that are focused where we need them to be as a country, and that continues to be a tough job for the current government to make sure that they hand down budgets that are as close to balanced as possible and headed in a direction that, right now, critically, puts downward pressure on interest rates.

Steve Austin: Thank you for that. Simon Birmingham is the Chief Executive Officer of the Australian Banking Association. Simon, I also have to ask you the Reserve Bank’s due to make a decision today. How does it look to the Banking Association? How do you think your members will respond to today’s announcement by the Reserve Bank?

Simon Birmingham: Steve, obviously, our members will be waiting watching, just as those right around the country, all of us with mortgages and borrowings will be waiting and watching to see what happens today. Our members, in terms of the rate cuts that occurred over the cycle of the last year or so, passed on each of those rate cuts and did so in a relatively timely way making decisions pretty quickly after the Reserve Bank made its announcement, and obviously they will have to have to respond if the Bank does make a decision to lift rates today, as many are speculating. They’ll sit down go through the identical process in terms of making those decisions and making those announcements.

Steve Austin: Well, I’m grateful you joined me in your new role as Chief Executive of the Banking Association. I want to play you an excerpt for an interview I did recently with a listener, Meredith from Sherwood. She’s a person who and her husband have means. They’ve got superannuation, they own their own home, they’ve saved money, you know, they’ve done what the previous generation was told was the wise thing to do. But let me play you what she said as a result when she tried to get a credit card to head overseas.

Meredith (pre-recorded grab): We also, later in the year, want to go to Scotland, and we wanted to hire a car, yep, so we’re organizing that. And then we got told we couldn’t have a car because we didn’t have a credit card. So, we thought, oh, that might be a problem. So, we applied to our Standard Bank for a credit card, to which we were rejected. We thought, that’s a bit unusual.

Steve Austin (pre-recorded grab): How long have you been with your bank may I ask Meredith?

Meredith (pre-recorded grab): A long time. We’ve been with our bank for a long time, however, when you do apply, you don’t get any customer service. So you apply, you can’t speak to anyone, because all online, and it’s all done by a chat system.

Steve Austin (pre-recorded grab): Welcome to the wonderful world of artificial intelligence.

Meredith (pre-recorded grab): Indeed, and lack of customer service and lack of customer service. So, then we thought, well, we’ll try another bank. So, we tried a bank to which I also have access to, a very substantial Australian bank. And I tried them, and they also knocked us back. And we have large sums of money in there from a recent house sale, and they refused us. So, then we thought my account, a friend who’s an accountant, said, I’ll go to retail and try them. I cannot get a credit card with them either.

Steve Austin: I’ll leave it there. That was Meredith. When we played Meredith story, we were inundated with texts and phone calls from people who faced similar issues. Chris Grice, then the Chief Executive Officer of the National Seniors group, Australia told me there is a bias by the banks against the older age demographic.

Chris Grice (pre-recorded grab): If we can, at least in terms of the current system, encourage folk to actually get a credit card in their own name, if they’re in a partnership situation in their own name, and get that as early as possible, pre retirement. It’s incredibly important, because even though you may have cash in the bank, you may have assets, from the point of view of the capacity to demonstrate income capacity, once you get into that age point where you’re moving into that retirement phase, our system prejudices basically those folk who…

Steve Austin (pre-recorded grab): Our system is deliberately, economically prejudicial, deliberately knowingly. Okay, now the retirement age, though Chris is 67 now.

Chris Grice (pre-recorded grab): Absolutely, and we can access our superannuation. We can draw down.

Steve Austin (pre-recorded grab): And so Meredith is not even allowed to legally retire if she was, you know, she couldn’t. She’s 64 she’s well under the retirement age.

Chris Grice (pre-recorded grab): Yes. And whilst the regulation is well meaning from the point of view of this came out of the banking and insurance Royal Commission. And I guess yes, we had to sort of clamp down on irresponsible behaviour and too much credit being given out. But obviously the pendulum has swung back the other way to the extreme, and basically we have created this system now where, where it is not fit for purpose.

Steve Austin: I might leave it there. That’s Chris Grice, the Chief Executive of National Seniors Australia. So, let’s go back to Simon Birmingham, from the Australian Banking Association. Simon, why did banks deliberately refuse people over the age of 60 a credit card.

Simon Birmingham: Steve, it’s not about age, but it is about income. And indeed, as Chris just indicated, in situations like Meredith’s, what happened was back in the wash up of the Royal Commission and the law was changed in 2019 to put in some really quite prescriptive conditions around how banks assess responsible lending, and particularly responsible lending as it as it applies to credit cards, and so specifically with credit cards, it means that a bank has to assess whether or not based on a person’s income alone, not their assets, but the income, whether they could repay the total amount of credit that they’re eligible for, and to be able to repay that if it were fully withdrawn and within a fixed three year period.

So, this is quite a prescriptive test, and often, of course, when people move into that retirement phase, they will put in place financial structures with their financial advisers drawing down just a fixed income stream out of their savings. And it is just that income stream that banks are allowed under the law to assess in terms of that repayment capacity, even though they may have other savings and that, arguably, that could draw upon. That’s not the way the law has been written, in terms of that particular part of the income test that has to be applied. And I appreciate that does create challenges for people like Meredith in those circumstances.

Steve Austin: It doesn’t create challenges. It stops them. It stops them dead. It’s not a challenge. You’re telling me that the law prevents them.

Simon Birmingham: The law prevents them, if their income, the way it is assessed, in terms of how much they are spending of that income, what their day to day costs would be, and of course, to preserve their savings throughout a potential retirement people do tend to draw down just what they need to fund that living, to be able to take the odd holiday, those sorts of things. But it does mean that getting additional credit then becomes a challenge because of the way the law is written…

Steve Austin: Simon, let me jump in there. You know, the previous generation, you know, they were called the baby boomers. They were told to do something when they were young, save their money, pay off their house… It’s regularly pointed out that this generation have really substantial amounts of money and assets, but the law is written that that doesn’t matter because they don’t have a job with a fortnightly pay packet that they are deliberately blocked by Australian law from getting a credit card because they don’t have what the legislation says is an income stream, even though they might have multiple millions of dollars.

Simon Birmingham: And Steve, I think there is an issue here, if I’m if I’m being honest, obviously, as you acknowledged, I’m relatively new, stepping into the Banking Association CEO role, having this raised. I mean, you could probably talk to National Seniors and others, if the banking industry just goes along and says, ‘We want to see credit laws eased’, understandably, people will think, oh well that’s just banks wanting to be able to give more money out. But when it’s being raised by people like National Seniors, the Council on the Ageing and others, then I think there is something genuinely that we should try to work with them on and see whether we can get government to come up with a nuanced approach that provides some appropriate flexibility for the type of circumstances you’re talking about, and that’s about trying to address the big problem, I guess, for individuals today. There’s the advice Chris gave that I heard, which is, if you’re approaching retirement, then plan and get these sorts of arrangements in place. That doesn’t help Meredith or those who are in retirement already, but be mindful there are in terms of being able to act with things like a credit card, you can get Visa and MasterCard debit cards from most financial institutions nowadays that function like a credit card, in terms of being able to rent cars and book hotels overseas, and so they can give you that functionality, but just don’t have the credit limit attached to them, and that that is another way for people to at least get the functionality they need from a credit card without the credit line of potential debt that comes from a traditional credit card product.

Steve Austin: I take your point, you’re only recently appointed to the role as Chief Executive of the Australian Bankers Association. It predates you well, your years, your time there. Obviously, it’s not a new issue. We heard from nationally recognised retirement specialist Noel Whitaker, who told us he’d been raising this issue with your association, the Bankers Association, for over four years, and he says it’s a choice that banks are making, that it’s not necessarily a legal requirement. It’s a choice by the banks themselves.

Simon Birmingham: Certainly, the understanding and advice I have is that it’s not a choice. Banks absolutely have to apply responsible lending laws in the way they assess any type of credit application, a home loan, a car loan, a credit card, any of those laws, and when you are I are going to get a home loan that will, of course, have a look at what our income stream is also what the rest of our asset base is. With a home loan, of course, you have the home that provides the security for it as well. But with credit cards, there is this quite prescriptive income test, as I was explaining before, that doesn’t in terms of the income test capture the asset side as well. Now, I in terms of my approach to this role, I want to make sure that we do engage with consumer organisations and representatives of other groups, like the ageing like those who obviously represent consumers more generally in their advocacy, how we deal with people in hardship circumstances, they’re all important considerations for us.

Banks can’t come up with bespoke solutions to every individual, but we certainly if there are issues with the way the laws are working, or at times policies are working, we’d be trying to work through those, and particularly issues like this, where those other advocacy organisations for whom it’s not going to be seen by government or regulators as self-serving for the Council of the Ageing or National Seniors, they might look at banks a little more sceptically if it was just us suggesting an easing of those credit restrictions.

But I’m very happy to sit down work with those, those partners, and say, for people with solid asset bases where, and particularly if they have access to some degree of more liquid cash, clearly you can have a big asset base, but if it’s all tied up In your house and your superannuation, that’s not necessarily an asset that you can access if you happen to get yourself into credit card debt easily.

Steve Austin: So I got to tell you, my listeners are very sceptical about this, Simon, my listeners are very sceptical when banks try and get teenagers hooked on a credit card, you know, when they turn 16, but they won’t give people who’ve got cash assets. You know, when their experienced money managers seem surprising, but I take your point. You’re only new in the role, so I won’t, sort of hammer the issue with it. I’ll take some calls from listeners, but I’ve got a quick question for you, not related, just about the Armaguard matter. Last year, Armaguard was on the brink of collapse. A deal was done with banks and others for a new pricing model. Is that going to keep them afloat? Is that it is that the problem solved?

Simon Birmingham: We’re pretty close, touch wood to problem solved there Steve. So Armaguard, your listeners, know, move cash around the country, get it into bank branches, into supermarkets, into a range of other businesses that need cash across the country. But as cash use is declining and has declined quite significantly, it’s only around 10% of transactions nowadays and is forecast to go down to 4 per cent clearly that hits their business model. So the four big banks together with three big retailers, Coles, Woolies, Wesfarmers and Australia Post have all worked together to prop up Armaguard, and that’s been, or will be now, more than $100 million of extra payments through to the end of June this year, and where we’ve developed essentially a new pricing model for Armaguard. Treating them a bit like a regulated monopoly, which we’re working with the ACCC to get implemented, to have security in that over the years to come. That’s a lot of technicality, but for what people care about, it’s about ensuring that we can still move cash around the country and do so reliably. So, you can get it where you need it, when you need it.

Steve Austin: I think we need to talk again about this credit card issue, because I can tell you that our switchboard and our text line is going hot on this issue, but I’ll leave it for now. How long have you been in the job again?

Simon Birmingham: So, we’re around the five, six month mark.

Steve Austin: Okay, all right, we’ll speak to you again, I hope. Thanks for your time.

Simon Birmingham: Absolutely anytime. Steve

Steve Austin: Simon, Birmingham, Chief Executive Officer the new one of the Australian Bankers Association.

Ends