Weekend Edition: The Irvine Fix: Simplicity, Productivity and Confidence
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How will international trade uncertainty and a potential RBA rate cut impact Australia’s economy?
The uncertainty of international trade, a central bank that's slow to move rates lower, not just in Australia, that is happening in many parts of the world. An economy that is moving slowly, thanks in part to sluggish productivity growth. So what does NAB's CEO think 2025 holds? What's in store for us? Starting with the RBA next week, a rate cut seems likely. Is that gonna help? The morning call from NAB with Phil Dobby. The weekend edition. Well, late last year we spoke to Andrew Evan, the NAB CEO. He's still in his first year as head of NAB, but he's been with the bank since just before the pandemic. Now, the pandemic, of course, was a very uncertain time, but I tell you what, these are uncertain times now, aren't they, with Donald Trump's trade policies, for which we seem to get fresh news almost every day.
So how is Australia going to cope with that? Will we navigate through this MAGA? approach more successfully than other countries. I mean after all we have a trade deficit with America. We actually buy more from them than they buy from us. So I suppose that helps. Or is that the thinking that uh you know tells us, well, it's not going to be so hard for us. Is that a dangerous assumption to make, do you think, Andrew? What are your thoughts on this?
We're a trading nation and so we do rely on on floats of trade more than m many other countries. There's simply uh no doubt about that. Uh I think we come into this a period with a lot of strengths, however. Uh you mentioned the fact that with the US uh we don't have a surplus. We actually have a a trade deficit. So you know, in terms of uh how Uh President Trump thinks about things. He thinks about whether he's winning, America's winning or losing in a bilateral relationship.
What impact could the US‑Australia trade deficit and a possible trade war have on Australian businesses?
And one of the things he looks at is a straight trade surplus or deficit. And so that certainly helps us. We also have a pretty diverse set of trade flows with uh frankly a bigger focus on Asia and Southeast. Asia. So the US is actually a much smaller trading partner for us than some other countries, particularly Canada and Mexico. So I think that puts us in good stead. That being said, whenever there's uncertainty and worry, I think that's not good for anybody and certainly not good for Australia.
Yeah, and the Aussie dollar always gets hit, doesn't it? And we've seen that. I mean there was there was a fear that it might get down below sixty uh US cents. Actually seems to be veering away from that now, so maybe those fears are uh unfounded. But it is historically low. I mean b j just back uh in September we we were looking at it nudging seventy. So getting down towards sixty. I mean that that's a problem, isn't it? Well it depends, I guess.
If you're an exporter to US dollar demo denominated markets, it means your goods are now cheaper. And so that's uh terrific for exporters. But if you're an importer of goods or uh certainly to Australian consumers, it could mean that the price of certain goods uh could go up. I read an article the other day that um white goods, you know, fridges, freezers, kitchen appliances, those types of things. Prices of those may start to increase due to the weakness in the Aussie dollar. Now it's important to note this is not an Aussie thing. This is more about the strength of the US dollar than weakness in the Aussie dollar. And the US dollar has strengthened against all currencies because of the you know essentially giant sucking sound that is the US um market.
want more exposure to the US because of Donald Trump. More than They feel that his policies around deregulation and lower taxes are going to be good for growth and global investors want exposure to that.
Now it's not long since we last spoke, um but I feel like a fair bit has happened.
How did Andrew Irvine’s recent trips to Europe shape his view of Australia’s economic strengths?
So uh what have you been up to, basically? And and what are you gonna do this year? What are your plans?
Well I had a couple of weeks off. I hope that's pretty important. Got a bit of R and R which was great and had a uh a a a s a quick ski trip to Japan. From a work perspective, uh I actually spent a week in our European offices in London and Paris, uh which was revealing we I met with a number of uh terrific customers, but it was also uh helpful to be in a market that doesn't
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Chapters
8 chapters
1
How will international trade uncertainty and a potential RBA rate cut impact Australia’s economy?
0:01–1:40
2
What impact could the US‑Australia trade deficit and a possible trade war have on Australian businesses?
1:40–3:49
3
How did Andrew Irvine’s recent trips to Europe shape his view of Australia’s economic strengths?
3:49–6:09
4
Should Australia adopt a UK‑style mandatory scam‑reimbursement model to protect consumers?
6:09–8:47
5
Why is lack of productivity and a housing‑supply crunch the biggest challenge for Australia’s growth?
8:47–10:54
6
Will the expected RBA rate cut boost confidence and make housing more affordable for younger Australians?
10:54–13:29
7
How are business confidence and supply constraints influencing the outlook for Australian firms?
13:29–15:58
8
What are NAB’s strategic priorities for 2025 to stay ahead of the competition?
15:58–17:35