ABA opening statement to Senate Select Committee on Productivity in Australia

Check against delivery

Thank you, Chair, and members of the Committee, for the opportunity to appear today.

Improving productivity is one of the defining economic challenges facing Australia, and many developed economies. Productivity ultimately determines whether real wages rise, whether Australia remains an attractive place to invest, and whether the next generation is better off than the last.

The banking sector plays a pivotal role in enabling productivity in Australia’s economy through credit provision to businesses, infrastructure and home ownership, along with world leading payments systems.

That is why the ABA joined with other industry associations in a joint alliance advocating for practical measures to boost productivity. What unites the alliance is a shared belief that Australia needs better regulation. Australian organisations now spend around $160 billion a year complying with federal regulation – more than double the cost of a decade ago.

The alliance has called for an economy-wide regulatory stocktake and a 25 per cent reduction in regulatory costs by 2030, aligning with targets already adopted in the United Kingdom and the European Union.

For a bank customer, reduced regulatory delays and duplication mean faster service and quicker approvals.

A concrete example of a very practical reform with win-win benefits is set out in our submission.

Today, even when a customer explicitly asks for it, the Australian Taxation Office cannot share that customer’s own tax information with their bank. So, when Australians apply for a loan, they are left to gather and submit sensitive documents like payslips, tax returns, bank statements – all too often by hand.

This process is an anachronism in the digital age, unnecessarily burdensome for customers, and creates unnecessary risk in our financial system.

Buying a home or securing a business loan should not begin with a scavenger hunt through your own financial records.

This is why the ABA has been advocating for a secure, consent-based way to share ATO data with banks through the Consumer Data Right, for the purpose of credit decisions. This is a genuinely productivity-enhancing reform. It would mean faster, more certain loan approvals, less paperwork for customers, and less time spent on manual processing across the financial system.

It would also strengthen the integrity of lending. Fraudulent loan documentation is a growing problem, and artificial intelligence is making fake payslips and doctored statements frighteningly easy to produce. Verified ATO data would give lenders a single, trusted source of truth for a customer’s income – helping to prevent document fraud at its source.

The single best defence against fake income documents is real income data – and the ATO already holds it.

We therefore welcome the Government’s recent budget commitment to explore this reform. It is a positive step, and we encourage progress to be made on it as soon as possible.

To the issue of home ownership more broadly, nowhere are productivity challenges more visible, or more talked about, than in housing.

Banks are central to home ownership. In 2025, banks extended more than 556,000 loans for housing – nearly a quarter of them to first home buyers. That figure represents an increase of 34,000 loans from the previous year.

Bank lending also supported the construction of approximately 110,000 new homes in 2025.

But persistent constraints on housing supply remain a significant handbrake on home ownership, limiting labour mobility and intensifying cost-of-living pressures.

Lifting productivity in housing requires clearer and more consistent planning settings that deliver faster, more certain approvals. It necessitates affordable building standards, and a construction workforce big enough and flexible enough to meet demand. And it means making sure roads, power and water keep pace with where we’re rezoning for homes.

Finally, a word on how banks themselves are regulated.

The ABA has long argued that regulation should be proportionate to the size, complexity and risk of the institution being regulated. A one-size-fits-all approach imposes disproportionate compliance costs on smaller banks – costs that ultimately flow through to customers.

We therefore welcome APRA’s recent commitments in this area including its move to formalise a three-tiered approach to proportionality, to streamline accreditation, and to improve the transparency of its licensing and capital decisions. These are essential steps if smaller and mid-tier banks are to successfully compete while maintaining a viable return on equity.

APRA is also consulting on variations to credit risk capital settings, potentially giving banks greater capacity to lend to the priorities that drive growth: new housing, infrastructure and small business. These are welcome initial steps to refine prudential settings to support productivity, while keeping our financial system unquestionably strong.

As the Committee weighs how best to lift Australia’s productivity, we would urge the prioritisation of reforms with clear benefits: smarter regulation, tangible reforms like secure ATO data sharing, and faster housing approvals and builds.

Thank you again. We are happy to take your questions.

Regulation & Policy