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Outside of the Big Four, other banks are losing their market share at a dramatic rate. The Big Four now hold around ¾ of all mortgages in Australia, which is up from just over ½ last year. The net result of the continued dominance by the big banks is that market competition will suffer, and could potentially spell negative results for the public.

With the Big Two seemingly a permanent market fixture, what will be on the horizon to push Australia towards having one Mega Bank? The influence of the ACCC should prevent any more mergers, so it will have to be achieved through internal strategy and marketing efforts. CBA is in the prime position to emerge as the Mega Bank, as more consumers are looking to move away from smaller banks in this financial crisis.

The global financial crisis has brought with it a lot of fear surrounding the safety of bank funds. Traditionally, the shift of funds to the larger banks is a common trend amongst previous financial crisis’; most notably the Great Depression. So it is no surprise that bank and mortgage accounts are being switched to seemingly safer options.

The mortgage book growth should continue this quarter for CBA and ensure it increases its market share. Last quarter it captured 57% of the total growth of the Big Four and a similar result will ensure its well on the way to becoming Australia’s first Mega Bank.

A profound marketing push has reaped rewards for CBA in the mortgage market. As homeowners look to fix their interest rate to capitalise on the historically low rates on offer, this presents a great opportunity for CBA to lock in these homeowners as customers for a lengthy period of time.

The bank then has ample opportunity to ensure that the customers switch all other banking, loan and credit card products over to them. The customers can be enticed by offering extra home loan discounts or fee rebates. If CBA uses the strategy of capturing the mortgage market, locking them into contracts and then converting them into full banking customers, they may become a Mega Bank within the next three to five years.

Whilst reduced competition generally means a raw deal for consumers, we shouldn’t expect to see too many negative effects from a reduction in bank numbers. The market is saturated with banks, credit unions and other financial institutions, all competing for your business. Frankly speaking, there are too many products, special deals and incentives on offer to be able to determine the best deals in the market.

A less crowded marketplace should lead to further clarity of the banking options available. Hidden fees will become more transparent, and smaller banks will be able to concentrate their efforts on competing with the Mega Bank, rather than the plethora of other competing financial institutions.

Unlike other industries where a purchase is final or a contract is enforced to the letter of the law, the banking industry allows its customers the freedom to change to another bank if for any reason they are dissatisfied. This freedom is the main factor that differentiates the banking industry from other products in the consumer marketplace, and provides a buffer against the negative effects of decreased competition.

At present, the banks main focus is not on customer retention, but rather on oiling the cogs in the profit machine. The mentality is that for every unhappy customer who leaves, one unhappy customer from another bank will come to replace them. It’s no wonder we find revolving doors at their entrances.

If the CBA decides to metaphorically replace the revolving door with an escalator, and switch their focus to providing brilliant customer service, they are a shoe in to become Australia’s first Mega Bank in the next few years.

The public is crying out for a bank to understand their needs and provide the level of service they deserve. But with a long history customer dissatisfaction to overcome, this may be asking too much. Just when will we finally get to see the Mega Bank is anyone’s guess?

Paying pensions is a huge problem for the Australian government. That’s why they have raised the retirement age ever so slightly, in the hope that nobody will stir much trouble over a small increase in working years. If the retirement age keeps increasing, it will only be a matter of time before news headlines will read ‘Retirement age increased to 80’

The government has recently announced that from 2017 to 2023 the retirement age will gradually increase from 65 to 67. With the age of pension eligibility increasing, it will force Australians to work longer before they are able to retire.

Raising the retirement age follows the modern age raising trend in almost all facets of life. We are starting and finishing school later, entering the workforce later, marrying later, having children later and buying and paying off a house later too.

When we are young, starting something later has a minimal effect, but as the years get on it becomes increasingly difficult. You don’t see a 40 year old applying for their first job or a 50 year old couple deciding to start having children. Similarly, a person in their latter years will struggle with an increased retirement age, since they will not be able to find any work.

During the current economic downturn and throughout Australia’s recent recessions, older people have been the first to lose their jobs. In each of the previous recession periods, they struggled to regain employment, which led to many of them entering an early retirement. If the clamps are put on the retirement age this time, it could spell trouble for many Australians.

Manual labour is out of the question for an aged person, as are most jobs requiring a portion of physical work such as lifting heavy boxes. Call centre positions may not be suitable due to time pressures needing quickness of mind and speech. But surely they can fill the large number of other administrative and sales positions.

Quite simply, businesses are unwilling to employ old people. Young people generally cost less, provide a vibrant and youthful image to the companies customers, and to be ruthfully honest, they have less chance of dying and needing to be replaced.

Rather than being unsuitable for most administrative type roles, older individuals can provide great value to a business willing to consider hiring them. While there are benefits to the employer in hiring the younger generation, the oldies have a long list of advantages and present a strong case over their less experienced counterparts. They:

• Will not turn up for work with a mega hangover or high as a kite on drugs
• Are not aiming to bustle their way up the corporate ladder, and will be more content with their position and becoming a long term employee
• Will treat the job as a long term position, rather than running off to the first competitor who offers an extra dollar per hour pay
• Will not run off with the company secrets and set up a competing business
• Do not believe that its ok to take a sickie to watch the cricket or attend a rock concert
• Have valuable working experience that can not be taught in just a few years
• Will not be spending work hours on Facebook or chatting to friends on MSN Messenger
• Are not interested in getting into bed with the secretary and will not be participants in the workplace love triangle
• Will not be racking up the company phone bills by calling all their friends mobiles and gasbagging about how smashed they got on the weekend
• Are unlikely to cause personality clashes and be the cause of strained workplace relationships between employees
• Will not clog the servers by downloading porn on the office computers

As long as the aged population are computer and internet savvy, they offer tremendous benefits to companies willing to employ them. But in this statement lies the problem, as most of the aged population do not even know how to send an email.

This problem should be the target of a government initiative. If they want people to work longer, they need to guarantee that jobs are available. One way is to ensure that older Australians are given the training they require to perform most of the work roles on offer, both at the moment and into the future.

Many local initiatives have been established and provide free basic computer classes for pensioners. But the key is to teach them computer and internet skills before they become reach the pension age. Considering the future population predictions, steps to establishing relevant workforce training should be taken immediately.

At present there are on average 5 workers for every retiree, but if the retirement age was to stay at 65; by 2050 this figure would have dropped to just two workers per retiree. Clearly the pension age has to be raised dramatically to keep the workers and retirees balance. The imbalance is being caused by an extension in life expectancy figures, with Australians living for longer and hence more people being on the pension.

If the Australian government wishes to keep the worker to pensioner ratio at 5:1, then it is highly possible that we will see the retirement age raised to 80 in the near future.

All Australians should be familiar with the Rudd government’s recent cash handouts, but many wouldn’t know that they may be entitled to even more cash under the economic stimulus package. There were a number of energy incentives introduced, designed to attract Australians to more greener and energy efficient alternatives for household heating and cooling.

The installation of certain items or devices in the household is being met with a substantial rebate from the government. As more households make the switch to green alternatives, it will relieve the strain on the public energy grid and lead to many households becoming self-sufficient in their energy needs.

The rebate for installing a solar hot water system has been set at $1,600. Running until 30^th June 2012, the rebate is available for any household that switches from an electric hot water system to a solar or heat pump hot water system. As the rebate only applies to system changeovers, new houses are naturally void from the scheme.

According to government calculations, a solar hot water system can reduce an overall household electricity bill by on average 28%, which equates to around $500 per year for the regular household.

The other economic stimulus rebate is for the installation of ceiling insulation. Government figures indicate that this will reduce energy requirements and allow families to save around $200 per year on their power bills. Once again, the rebate is up to $1,600 for homeowners, but will only run until December 2011.

Unlike the solar hot water system rebate, homeowners can receive a rebate for installing ceiling insulation in their rental properties. The rebate is limited to $1,000 in these instances, but it affords the opportunity for homeowners to make their property more attractive to tenants, both for the comfort aspect as well as the reduced power bills.

Both rebate opportunities are part of the Australian government’s $4 billion Energy Efficient Homes package. Homeowners are given the choice of receiving a rebate on one of the installations, and can not claim both rebates. However the homeowners choosing the solar hot water rebate may be entitled to extra benefits.

In addition to the $1,600 rebate, the installation of a solar hot water system may be eligible to create Renewable Energy Certificates (RECs). Homeowners can then create and trade these certificates or use a registered agent who will pay the household for the right to create RECs.

RECs are also known as Green Tags or Tradeable Renewable Certificates (TRCs), and are greatly misunderstood by the general market. Simply put, a REC is a certificate that proves a certain amount (1 megawatt-hour) of energy is generated from a renewable energy resource.

So what is the point of a certificate? Some companies in their efforts to go green will purchase these certificates from the producers. This is purely voluntary and mainly performed in any effort to establish a green reputation and rapport with energy conscious individuals.

In addition to voluntary purchasers of RECs, energy retailers are required to purchase 20% of their electricity from renewable sources by 2020. The RECs will be traded as a commodity and sold to the highest bidder. So as we move closer to 2020, we can expect to see a dramatic rise in REC value, in addition to a substantial financial windfall for homeowners with the ability to create RECs.

The government originally introduced a rebate system for solar panels a few years ago, which is being wrapped up on 30^th June. The Solar Homes and Communities rebate scheme currently offers a rebate of up to $8,000 for installing solar photovoltaic panels on your home, but will be replaced by a new scheme on 1^st July.

The new Solar Credits scheme may not be as lucrative as its predecessor, but it does have an advantage that it is not means tested, allowing more people to qualify. Previously households earning over $100,000 per annum were exempt from qualifying for the rebate.

The effective rebate would come from the RECs acting as an upfront capital cost subsidy. A wide range of solar photovoltaic systems are available, with the REC value differing based on the expected power output and location of the installation. The installation has an effect due to the fact that RECs differ in value depending on the local demand.

Many retailers also offer subsidies by assigning the REC creation rights over to them. Currently the market value of one REC stands at $49, and the retailers hope to turn this into a profit if the value increases in the future. Homeowners must weigh up the benefits of receiving a subsidy and less administrative hassles versus paying upfront and handling the RECs personally.

The public is embracing the move towards green energy solutions, with high demand for the rebated products. Renewable energy is paving the way for our future and we hope that a complete transition eventuates in our lifetime.

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