Commonwealth Bank, Australia’s largest retail bank, has reported a record $10.16bn in profit for the 2022-23 financial year. Image: via Wikimedia Commons
Commonwealth Bank, Australia’s largest retail bank, has reported a record $10.16bn in profit for the 2022-23 financial year, 6% higher than the previous year.
The bank’s increasing profit margins correlate to steep mortgage repayment rates for lenders, pushing more and more Australians further into debt.
Matt Comyn, Commonwealth Bank’s CEO, received almost $8 million in bonuses, taking home a pay packet of approximately $10.4million – approximately 110 times that of the average Australian worker.
The bank increased variable mortgage repayments 10 times over the 2022-23 period, with the cash rate increasing by four per cent.
Over the same period, repayments on an average home loan of $585,000 have risen an extra $1,415, alongside skyrocketing cost of living expenses, while wages stagnate.
Young Australians are feeling the effects of rate hikes much more acutely, with Australians aged 18-34 saving less than the previous financial year, despite decreased spending.
Meanwhile, Australians aged 55 and over, particularly those in the 65+ age bracket, have seen steady increases in savings alongside increased spending.
The figures highlight a deeply escalating generational divide, with older Australians reaping the benefits of interest rate hikes.
Tax expert Kristen Sobeck identified that three major groups bear the brunt of inflation: the unemployed, workers, and borrowers.
“What we know is these three groups — the unemployed, workers and borrowers — disproportionately are effectively the working age population,” says Sobeck.
“Most certainly it does seem the working-age population is kind of bearing the brunt of the inflation crisis, relative to those who don’t have a mortgage, who aren’t employed and are in the consumption phase of life.”
However, Sobeck emphasizes that while borrowers are currently experiencing extreme pressure, they still hold a privileged position when compared to Australians who are unable to secure a home deposit.
“The most vulnerable individuals in our society are the renters, or the individuals who don’t own a home.”
