NAB CEO Ross McEwan says there is too much negativity about dire economic outlook

NAB boss Ross McEwan has made a plea to customers struggling to pay their bills as interest rates continue to soar, pushing Aussies to the brink.

NAB boss Ross McEwan has made a plea to customers struggling to pay their bills as interest rates continue to soar, pushing Aussies to the brink.

Speaking on Wednesday at The Australian Strategic Business Forum in Melbourne, the National Australia Bank CEO started out with an acknowledgment of the problems Australians are facing.

“The last six to 12 months have shown us we are in a difficult period of having high inflation coming in that we haven’t seen for decades — many leaders in business have never operated in an inflationary environment,” he said.

His advice to customers struggling with repayments was simple: “Put your hand up.”

“The earlier you put your hand up, the earlier and better we can help,” he said.

“When customers get into difficulty, just please pick up the phone. If we can talk to them very early on, the solution is usually there.

“What tends to happen is embarrassment sets in and people don’t pick up the phone, and it’s not until they have got the final letter that they will respond.

“That’s pretty well down the track.”

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NAB boss Ross McEwan on a panel discussion at The Australian Strategic Business Forum on Wednesday. Picture: Arsineh Houspian

Mr McEwan also used the forum to slam the one-sided conversation about the cost-of-living, saying there is plenty to be optimistic about, despite inflation soaring and skyrocketing interest rates leaving many struggling to pay for daily necessities.

Asked what he was forecasting for the immediate future, Mr McEwan said there was far too much negativity about the state of Australia’s economy.

“I actually think we’re coming down on this economy too hard,” he told business leaders who had gathered at the Sofitel on Collins Street.

“We’re talking the economy down and yet we are seeing some parts of the economy really doing very well.

“We’re predicting next year still GDP growth probably around that 1.8 per cent … say it’s less than 1.8 per cent and it’s positive, within an environment globally that is having some difficulties, we’re in pretty good shape.”

He said Australians should be pleased given the way Australia has withstood challenges during the pandemic and with the war in Ukraine.

“There are other economies, the likes of the UK, that has got very high inflation but most of it’s imported and they can do very little about it,” he said.

“So they are trying to push interest rates up to hold inflation which is creating a problem with the economy.

“We’ve got a growing economy and inflation at lower levels, there’s a lot to like about what’s going on here.”

It was a theme shared by Reserve Bank governor Philip Lowe who delivered a keynote speech to the business forum on Wednesday morning.

Mr Lowe said Australia is faring better than many other nations facing similar challenges.

“After many years in which inflation was something that most people didn’t think too much about, it is now a topic of everyday conversation,” he said.

“This is understandable as higher prices are putting pressure on people’s budgets. In many countries, inflation is now running at its highest rate in decades.

“In the United States and most of Europe, inflation is close to 10 per cent; the last time that this was the case was in the early 1980s.

“In Australia, the latest available reading on CPI inflation is for the March quarter. It showed an inflation rate of 5.1 per cent. This was lower than in most other countries, but higher than it has been at any time since 1991 and higher than we were expecting.

Mr Lowe told the audience that he may have done things differently during the pandemic with the benefit of hindsight and that insurance payments had impacted soaring inflation.

The NAB boss says Australia is in a good position compared to other countries.

He said it was possible the RBA provided “too much support”.

“Household spending, in particular, recovered more quickly from the pandemic than was expected,” Mr Lowe said.

“This reflected the success of the vaccination campaigns in advanced economies and the unprecedented support to household finances from fiscal and monetary policies.

“This policy support meant that, as the health situation improved, households had the confidence and the ability to spend.

“The result has been strong growth in aggregate demand and the emergence of tight labour markets in many countries. This has contributed to the higher inflation we are now seeing.

“Looking at this experience with hindsight, I can understand why some people might conclude that too much support was provided by governments and central banks.

“But it is important to remember the context in which this support was provided. At the time the decisions were made, the outlook was dire.

“In Australia, tens of thousands of people were expected to die, our hospitals were expected to be overflowing, many people were expected to lose their jobs and deep social and economic scarring was anticipated. It was a very scary time.”