ACTU calls out banks, insurers after posting ‘skyrocketing’ profits

The Australian Council of Trade Unions (ACTU) has urged Australia’s largest banks and insurers to reduce their prices for consumers after posting significantly high profits during this latest earnings season.

The ACTU said the financial services industry has recorded a 46 per cent rise in profits since March 2021, according to newly-released Australian Bureau of Statistics (ABS) data.

Rising insurance premiums and increasing loan interest rates have contributed to inflationary pressures felt by Australian consumers, with the cost of insurance and financial services jumping 6.4 per cent in the last 12 months.

The call follows in the wake of several profit results announcements, with the Commonwealth Bank posting a $9.48 billion profit; IAG seeing a 79.1 per cent increase from the previous financial year to profit $1.42 billion; Suncorp recording a 17 per cent rise with $801 million in profit; and QBE posted an almost 100 per cent increase of $802 million for its half-yearly results.

“Banks and insurance companies are having a lend of Australians. They have put up prices, not because they need to, but to fatten their profits. This type of profiteering and price gouging is deeply offensive to working people who continue to struggle with cost of living pressures,” ACTU Secretary, Sally McManus, said.

“Big businesses like banks and insurance companies are keeping inflation higher than it should be and they need to be held responsible for this. The evidence is clear that corporate profiteering and price gouging are fuelling inflation.

“Since March 2021, the banks have made $212 billion from raising people’s interest payments, while insurance companies have hiked insurance premiums by 36 per cent. It’s no wonder the industry increased their profits by 46 per cent.”

The ACTU had also commissioned an inquiry into price gouging and unfair pricing practices conducted by financial services companies that was led by former Australian Competition and Consumer Commission (ACCC) Chair, Professor Allan Fels AO. The final report, published earlier this year, found heightened use of ‘confusion pricing’ that imposes complex price structures and makes price comparisons difficult to influence consumer behaviour.

“The Allan Fels-led ACTU Price Gouging Inquiry exposed the practice of ‘confusion pricing’, where companies use complex fee structures to make it difficult for people to work out their actual costs and compare prices,” McManus said.

“Unions have no tolerance for these big businesses cashing in on the struggles of working people.”