State’s ills to weigh on nation: ANZ chief

The second COVID-19 lockdown in Victoria will slow the nation’s recovery from the global pandemic, according to ANZ chief executive Shayne Elliott.

The second COVID-19 lockdown in Victoria will slow the nation’s recovery from the global pandemic, according to ANZ chief executive Shayne Elliott. Picture: AAP

The second COVID-19 lockdown in Victoria will slow the nation’s recovery from the global pandemic, according to ANZ chief executive Shayne Elliott.

Mr Elliott told broadcaster SBS in an interview on Monday that the state’s six-week lockdown, announced last week after a resurgence in the virus, would result in lower economic activity.

“And of course, Victoria is very important to the whole ­nation,” he said.

“But what’s more important and very hard to predict is how that will affect the psychology of everyone else.

“I imagine people are going to be a little more cautious, a bit worried about a second wave or a repeat, and I think they will be a little more cautious, as a result, in restarting their businesses or their attitude to getting back on their feet.”

Confidence, he said, was a significant driver of the economy.

While the Morrison government’s support programs were important, and the banks had agreed to an extension of loan deferrals, activity levels would be determined by decisions made in the business and household ­sectors.

“That all comes down to confidence and I can’t predict that,” Mr Elliott said.

“We’re just trying to give them capacity to make good decisions for the economy, but ultimately it’s up to them.”

As to the level of stimulus in the economy, Mr Elliott said it was sufficient to achieve its purpose. The problem was that circumstances were changing every day, although people were demonstrating flexibility and a preparedness to roll with the changes.

Mr Elliott rejected suggestions that the nation was facing a cliff with the scheduled expiry of programs such as JobKeeper at the end of September.

The banks, he said, would be in a strong position after completing check-ins with customers who had accepted business lending or mortgage deferrals: “So we’ll be able to decide who can and should get back to repaying their loans, who needs a little more time to work with their bank, and who can’t get back to paying their debts any time soon so we can put them into our own version of intensive care, our hardship program.”

Mr Elliott repeated previous guidance from the bank that more than half of the customers who had secured deferrals could probably resume repayments.

This was because they had kept their jobs or hadn’t suffered a reduction in income. In fact, the income of 11 per cent of this segment of customers had increased in the COVID-19 period.