Banks and Big Retail Shift Costs onto Australians

A typical $700,000 mortgage will cost an extra $107 a month after the Reserve Bank’s latest rate rise, the fifth this year. Qantas says higher fuel costs will bring fare and capacity changes. The big four banks were due to pass on their new rates on Black Friday, which the report said was also Friday the 13th. Household budgets absorb the increase; corporate operators adjust prices and routes.

Who Carries the Costs

Westpac reported that 37 per cent of its customers were more than two years ahead on mortgage repayments, 53 per cent had buffers of at least six months, and 1 per cent were behind. National Australia Bank and Westpac offered different pictures of borrowers’ health in their full-year results: one increased provisions for potential losses, while the other didn’t. The banks’ provisions for rising bad debts became a central question as they briefed investors.

The report described the banks’ balance-sheet buffers as a pillar of their “unquestionably strong” status and protection against economic shocks. It also pointed to deteriorating conditions, including Canva job cuts and administrators being called in to David Jones. Those buffers sit on bank balance sheets. Households still face the monthly cost of borrowing.

Qantas said demand remained resilient despite recent price increases. International demand across Qantas and Jetstar remained strong, with flyers redirecting travel away from the Middle East. But the carrier said domestic operations would account for flight cuts on some routes, leaving consumers with fewer flights and more expensive tickets. The Australian dollar fell around 2 per cent over the week, affecting exchange rates at popular holiday destinations.

The federal government faced pressure to show it could make significant savings in next month’s budget update amid high inflation and spiralling costs. Australia’s diesel inventory stood at 31 days’ worth, down three days from the previous week, according to a government update citing uncertain global conditions. Federal Minister for the Environment and Water Murray Watt said the amount was around the level of two weeks earlier and “within normal levels.”

When Retail Power Changes Hands

David Jones entered voluntary administration after getting into financial trouble. Its chief executive and board handed control to voluntary administrators and receivers on Thursday, with potentially most stores facing closure and thousands of associated job cuts. Administrators considered restructuring options, including closing some stores.

University of Technology retail expert Gary Mortimer said David Jones operates a largely concession-based model in which brands control their own space, inventory and staff. “They own that space, they own that inventory, they own that staff,” he said. Brands would likely collect their stock and move it to their own stores. David Jones-branded goods might be discounted or moved to stores that remained open.

Scentre Group operates Westfield centres. Data showed David Jones paid less than half the rent per square metre charged to other retail tenants. David Jones grew online sales to 20 per cent of revenue, but that didn’t cover its physical-store rent payments. The company’s history didn’t cancel the bills: founded in Sydney in 1838, it was a centre of Australian high society in the 1960s. Laudie Sneddon, 90, who worked as a graduate pharmacist at its flagship Elizabeth Street store in Sydney, remembered, “It was the place to see and be seen.”

Department stores lost ground as brands opened their own shops, e-commerce expanded and cheap fast fashion grew. The COVID-19 pandemic accelerated the shift away from physical stores. Debenhams, founded in 1778, expanded to more than 100 locations in the United Kingdom before entering administration in 2021. Its physical shops were liquidated; it now operates online. In the United States, Macy’s store count has shrunk, Nordstrom has closed legacy high-end stores to open more Rack discount stores, and Saks Global filed for bankruptcy in January this year, with only a fraction of its stores emerging from the process.

The New Shape of the Shopping Centre

A report from Urbis and the Shopping Centre Council of Australia said retail sales rose 3 per cent in the year to June 2026 and shopping-centre foot traffic increased 2 per cent nationally. PwC research found foot traffic among shoppers aged 14 to 29 rose 57 per cent year-on-year. Elissa Stewart, director at Urbis, suggested replacing three levels of a department store with three “mini-major” tenants, such as a supermarket, JB Hi-Fi, Rebel Sport or Mecca. “You’ve got to ensure balance, but the combined power of those three tenants can be more than a department store to draw people in,” she said.

Mortimer named Kmart, Big W, TK Maxx and Harris Scarfe as discount retailers that had “suddenly become the ideal tenant.” Vanessa Rader, head of research at Ray White, said entertainment, fine dining, activities and gyms could bring visitors during quiet late nights and early mornings; electric-vehicle chargers could also attract shoppers waiting in car parks. Mortimer identified healthcare and libraries as opportunities. Stewart said centres needed to become “third spaces,” where people could spend time comfortably while spending little or no money. But rising costs and constrained investment made reinvention “not an easy fix,” she said.

A different response to rising costs came from independent journalist Rebekah Barnett, who said she was selling her Perth home and moving her family to Bali. “Prices are up (about) 25 per cent since 2019. Real wages are down four to five per cent,” she said, adding that housing cost eight to ten times a full-time wage and most families needed at least two incomes to buy a home. She also cited long work hours and childcare in Perth costing $35 to $40 an hour for a nanny. Some followers supported the move; others said the family could do it because they could take Australian earnings to a less expensive country. The account records one family’s exit, not a change in the costs they described.