Big banks and insurers driving inflation

Big banks and insurers have priced-gouged their way to a whopping 46% profit increase since 2021, according to recent Australian Bureau of Statistics (ABS) data.

And in further research that shocks no one, this profiteering by Australia’s biggest financial companies – at the expense of everyday Australians – is one of the leading contributors driving up inflation.

Raking in record profits while workers struggle

As Australians face unprecedented cost-of-living pressures, the nation’s biggest banks and insurance companies continue to post record profits. 

Just recently we saw the Commonwealth Bank post a staggering annual profit of $9.48 billion – and they’re hardly the only company cashing in during the cost-of-living crisis: Australia’s largest insurance group, IAG, recorded a $1.42 billion profit, up 79.1% compared to the previous financial year, Suncorp, another large insurer, reached $801 million dollars from its insurance arm (a 17% increase) and QBE saw a nearly 100% profit of $802 million for its half-yearly results alone.

Profits soar amid rising costs

According to the recent data from the ABS, this 46% surge in profits for big banks and insurers since 2021 comes at a time when the cost of insurance and financial services has risen by an average of 6.4% over the past 12 months.

This profiteering is no accident, and is largely driven by higher premiums and mortgage rates, resulting in the banks pocketing $212 billion from raising interest payments on households and businesses.

Price gouging 101

Earlier this year the ACTU-led Inquiry into Price Gouging and Unfair Pricing Practices, led by Professor Allan Fels AO, exposed the questionable tactics these companies use to boost their profits.  

One such tactic is ‘confusion pricing,’ where companies intentionally create complex pricing structures that make it difficult for consumers to understand what they’re actually paying.

For example, a 2023 Australian Competition and Consumer Commission (ACCC) report highlighted that 71% of bonus interest accounts did not pay out the promised bonus rates, misleading customers.

Prioritising profits over people

Banks and insurance companies are having a lend of Australians. And it’s exactly the sort of behaviour that Peter Dutton and the Liberals enable and encourage.

Peter Dutton himself voted against the Banking Royal Commission 24 times, and tried to give the big banks a $17 billion dollar tax cut as well.

Union members fight back

Union members are fighting back, calling on these financial giants to stop exploiting everyday Australians by raising prices unnecessarily. 

It’s union members who have won the biggest changes to workers’ rights in Australia in generations – leading to higher wage growth and better conditions. 

There’s more work to be done. When you’re a union member you can be a part of winning change for working people and holding big businesses to account.