NAB CEO Ross McEwan:

Thank you Chair.

Last time I was with this Committee, we spoke about the importance of a national approach to safely opening up the economy – moving away from restrictions, towards greater freedoms.

The National Cabinet plan gives us hope. Vaccine take-up continues to rise and the targets for 70 and 80 per cent are in sight.

Current forecasts show 80 per cent of eligible Australians will have had their first jab within three weeks, and their second jab by mid-November.

This is our light at the end of the tunnel. Our communities need hope. Our businesses need clarity, to plan for the future.

The National Cabinet plan states that, when we hit the 80 per cent vaccination target, vaccinated residents will be exempt from all domestic restrictions.

Australians need more detail on what this means and how it would work.

European countries have provided this by implementing a vaccine pass, which gives people freedom to attend restaurants, sporting events, major concerts and domestic travel.

Australia needs its own national vaccine pass, providing similar freedoms, ready to launch when we reach 80 per cent.

This should be developed alongside existing plans for an international vaccine passport for Australians to prove their immunisation status overseas and on their return to Australia.

When we can safely move from restrictions to freedoms, I am very confident the Australian economy will recover swiftly.

This series of lockdowns have not been as financially damaging for many of our customers as last year’s lockdowns.

Many businesses are in a state of hibernation, waiting for restrictions to open up and ready to get going again.

For others, in particular, small business customers in Sydney and Melbourne CBDs, the situation is more fragile.

The number of customers in financial hardship is rising since the Delta outbreak but most continue to be able to make some form of payment.

As at 31 August, just over a $1.8 billion in lending was on deferral. This compares to $58 billion at the height of the pandemic last year.

Our position remains that a good business before COVID will most likely be a good business going forward.

An area I am increasingly concerned about is the growing toll of lockdowns on people’s mental health and wellbeing.

We are seeing it among our colleagues and hearing it from our customers when they call us for help.

Looking more broadly across Australia and all business sectors, what we are experiencing is a multi-speed economy.

While some businesses are really hurting, others are doing incredibly well. This is particularly evident in mining, agriculture and some forms of manufacturing.

This also gives me confidence in the path ahead. In the longer-term it will be business that leads growth and job creation.

Before the most recent lockdowns, the level of small and medium business lending activity was the highest we had seen in six years.

The Government’s Instant Asset Write-Off Scheme is an important driver, encouraging businesses to make immediate investment decisions.

Our latest survey shows 70 per cent of owners and managers are prepared to invest to grow their businesses, going forward.

To boost investment and accelerate growth, we need to make it easier to run a small business in this country. Right now, it is complex and difficult.

With closed international borders, business travel is constrained and we are unable to bring much-needed skills and labour into this country.

We all know that this situation is unsustainable. Tourism businesses are running at sub-capacity and I have spoken to manufacturing customers who are getting zero applications for jobs. Farmers can’t get pickers for their crops.

The Government’s work on deregulation is helpful. With occupational licences now recognised Australia-wide, it will become much easier for people to move for a job.

When I was before the Committee in April, I said it is NAB’s role to enable Australia’s economic recovery and job creation.

The bank is in a strong position to deliver; with the capital to withstand economic shocks and at the same time, fund good business investment.

Our bankers are lending more money, to more customers. In June, we led the industry in extending $3.8 billion to businesses across the country.

We are growing safely, without compromise on our lending standards. We believe the extraordinary rise in house prices over the past 12 months will slow, in line with what buyers are willing and able to pay.

We continue to make changes within NAB to create the culture we want, centred on serving customers well.

We are making a significant investment in training, to ensure our bankers are capable, motivated and clear about what’s expected.

We have reviewed remuneration and are removing bonuses for 12,000 customer service and support staff – and increasing their fortnightly pay.

Our work to protect customers, and the bank, from the growing threat of financial crime and cyber-crime, continues at pace.

It is one of the battlegrounds of our time, for banks around the world. Billions of dollars in fraud and cyber-crime attempts occur every quarter.  Strong collaboration with our industry, government and other authorities is critical.

I am determined that we get the basics right, while ensuring that Australians can access world-class products and services from NAB.

We are actively partnering to innovate faster; with international non-competing banks, with big tech and fintech. We are looking beyond our domestic peers as the competitive benchmark.

As we have seen in the UK, an open-finance ecosystem fosters new entrants, new business models and enables customers to shop-around.

There are nearly 700 fintechs in Australia and as the Open Banking regime reaches maturity, it will create further competition and improve outcomes for customers.  

In closing, I am determined that NAB will be the best bank it can be, as we adapt to a different future.

And as we emerge from the pandemic, I welcome the opportunity to work together, to support our communities.

Shaun and I welcome your questions.