Weekend Edition: Rate cuts will boost the Australian psyche, says NAB Chief
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How will the first RBA rate cut affect business and consumer confidence in Australia?
Well, consumer confidence might be showing green chutes, but business confidence has taken a bit of a hit in the latest NAB business survey this week. And rates on hold from the RBA. Can we expect sentiment to pick up so long as businesses and households are feeling the squeeze? Let's get some perspective from the man at the helm of NAB. That's this week. The morning call from NAB with Phil Dobby. The weekend edition. Yes, today I'm with. With Andrew Ervin, Nab's relatively new CEO. He took over from Ross McCugh in in April. But he moved to Australia to join Nab rather inconveniently for him during the pandemic from Canada, uh, where he'd been with the Bank of Montreal for twelve years, but now he is well ensconced in Australia in Melbourne.
So decent coffee at last. Andrew, welcome.
Welcome. Uh no, thanks, Phil, and thanks for having me on the show. And you were quite right, the coffee here is outstanding, world class.
I thought you were gonna say, you know, a coffee drinker was gonna go, what a waste. So uh yeah, I will enjoy it. So look, coming from Canada, uh Canada and Australia are two similar sized economies, quite a bit of household debt in in each case. Do you see similarities in the challenges that both countries face?
I actually I do. They're both um countries that ha that are probably one of the top destinations where people want to live and work. Uh so uh very strong inward migration. Uh they're both uh countries with great rule of law, um good uh healthy, safe p environments to raise families and those types of things. So they're both wonderful places and I couldn't have been Happier uh living in in both Australia and Canada. Uh also, you know, resource rich uh countries, big focus on agriculture. Uh so really very, very similar. There are some some differences. Obviously, Canada's proximity to the US makes their America their biggest trading partner. And obviously there's a bit of drama around potential risk to Canada.
If in the Trump administration and and tariffs. And then Australia, you know, close to Asia and all the opportunities that that uh brings with it as well.
So the fact that they are both, you know, countries where people want to live, that creates that whole question around uh the the problem around housing affordability.
What similarities and differences does Andrew Irvine see between Australia and Canada’s housing markets?
It's an issue in both countries.
Well no, I would say Canada's done a better job of managing supply. Um I think planning permission, housing construction and the sheer volume of new dwelling starts, uh, it's still an issue there, no doubt about it. Um but I I I would say there's things that we could learn here in Australia today from Canada around how you get moving in terms of dwelling construction. Uh and it's more of an issue.
So how do we g how do we fix that then? How do we get is it a question of just getting developers to to move faster? 'Cause when I talk to people about it, they go, Well, you know, the issue is it's not just the release of uh of land, it's it's just the costs associated as well.
Yeah, I I think um well planning is is challenging. There are some parts of the country where planning is a little bit easier. Actually Melbourne's one of those areas that is relatively better. I think New South Wales and Sydney is uh specifically uh quite challenged. Uh the you know, the cost of getting planning and and making amendments uh here is difficult. But I I would focus on you know, costs of uh l of labor, uh length of time it takes to get uh building construction done. We can look at methods of construction, uh uh a bit more modularity. I think there's the uh n Canada and North America generally uh has adopted more modern methods of construction that I I think would really be um uh helpful here.
Uh we also need to look at the types of homes we're building. Uh we have not enough what I would call medium density housing stock, uh low-rise apartment buildings, townhouses. There's still too much uh I think building of traditional single family dwellings, which of course people do aspire to. But uh we need housing stock that allows uh younger Australians to get on the housing ladder uh as a way to their, you know, the kind of end home, if you will.
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Chapters
8 chapters
1
How will the first RBA rate cut affect business and consumer confidence in Australia?
0:01–2:24
2
What similarities and differences does Andrew Irvine see between Australia and Canada’s housing markets?
2:24–5:42
3
How is NAB addressing Australia’s housing affordability challenge?
5:42–9:11
4
What are the current trends in Australian business confidence and sector performance?
9:11–12:53
5
How does NAB’s performance reflect the health of its customers and the broader economy?
12:53–16:29
6
What strategies is NAB using to simplify operations and boost productivity?
16:29–19:12
7
Where does Andrew Irvine see the Australian economy and NAB in five years?
19:12–23:10
8
What role will decarbonisation and global capital play in Australia’s future growth?
23:10–26:49