NAB CEO Andrew Irvine calls for more homes, lift in productivity

Australia is exiting its tough economic times, but the nation still has big issues in property and productivity to deal with, NAB chief executive Andrew Irvine says.

NAB Group CEO Andrew Irvine Irvine said many savers had banked their June-July tax cuts.

The recent Reserve Bank rate cut will set the tone for business confidence, but the nation must get to grips with its productivity challenge, National Australia Bank CEO Andrew Irvine says.

Speaking at the Trans Tasman Annual Economic Forecast in Sydney, Mr Irvine said the RBA’s recent move to cut the cash rate by 25 basis points could kickstart positivity in small businesses and consumer spending.

“For a homeowner it’s $100 a month. That will help households, but it will have an outsized impact on confidence,” he said.

Mr Irvine said many savers had banked their June-July tax cuts, adding that it was an open question as to how households treated the $100 rate cut benefits.

He cautioned that there was pain in the economy, pointing to young homeowners and renters, who were “cycling hard to stay afloat”.

But Mr Irvine said many ­people were prospering, with older homeowners having paid off loans often helping younger people fund their lifestyles.

He pointed to a recent visit to a private school that banked with NAB. “This actually shocked me … they said that 40 per cent of school fees paid in that school are paid by grandparents,” he said.

Mr Irvine said the end of the 2024 calendar year would be the toughest part of the economic cycle. But he said he was optimistic about what 2025 would bring.

Mr Irvine, who took the reins of the banking major in April last year, said many businesspeople were keen to see the other side of the upcoming federal election, and that they were focused on moving forward.

But Mr Irvine said Australia had to get to grips with its productivity challenges, pointing to the mining and housing construction sectors as being critical to the economy and warning that they were being crimped by overregulation and higher costs.

Mr Irvine said Australia was not building enough homes, and this was a danger to the nation’s need to grow through migration.

He said Australia didn’t invest enough in productivity, and the nation was not skewed to “the new economy”.

Mr Irvine said housing and mining were two key areas needing innovation, and said construction took too long and cost too much.

“We know what the issues are, it is hard to do planning, some jurisdictions have real problems with planning,” he said.

“We don’t have enough new ways of working in construction.”

Mr Irvine said recent conversations around encouraging more borrowing, or pushing banks to disregard student loans for first-home buyers, failed to address the core issue. “We have to focus on more dwellings getting built in this country,” he said.

Mr Irvine said mining projects also took too long to be approved.

“I’m hearing from some of our resource customers that they see sovereign risk in Australia and they’re choosing to deploy capital in other areas, South America, Canada,” he said.

He said Australia also had to do more to train STEM graduates, encouraging younger people to study in the field.

Originally published as NAB CEO Andrew Irvine calls for more homes, lift in productivity