Australia’s economic recovery will continue at pace: NAB CEO
The following op-ed by NAB CEO Ross McEwan appeared in The Australian newspaper on 6 April, 2021.
The end of JobKeeper and loan deferrals won’t stop the momentum in Australia’s business-led economic recovery.
Both have been critical in supporting Australia and Australians through the past 12 months, but they have done their job.
Thanks to the strength of our economy going into the crisis, and the decisiveness of the Federal and State Governments in managing our response, we have avoided the dire economic consequences seen in so many other nations.
There are still some Australians and businesses that are struggling and that’s really tough. But there are three reasons why I’m confident that Australia, more broadly, is ready to move forward:
1). The speed and strength of our economic recovery;
2). The rate at which new jobs are being created and;
3). The tailored support available for small businesses facing ongoing uncertainty.
We have avoided the March ‘fiscal cliff’ and now enter the second quarter with momentum in the economy. In fact, the economy will be back to pre-pandemic levels by the end of the March Quarter.
The most recent NAB Monthly Business Survey shows business confidence is back to its highest level since 2010. Business conditions are back to the level they were in August 2018.
The unemployment rate fell to 5.8 per cent in February, after 88,700 people found jobs that month. That means the number of Australians with jobs is above 13 million for the first time in nearly a year and job vacancies are now 26.8 per cent above pre-pandemic levels.
Over 98 per cent of the loans that NAB deferred for both business loans and home loans, are no longer on deferral.
For our customers and businesses that are still struggling, our objective is to get them to the other side of this crisis in the best possible position.
There will be some whose circumstances have changed permanently, and it may be in their best interests to sell a property or a business, before their equity is depleted.
But most customers will just need more time. Our position is that a good business before COVID will most likely be a good business after COVID, especially given the innovation we have seen in many businesses throughout the pandemic.
As the vaccine rollout speeds up, and the need for prolonged and widespread lockdowns has become less necessary, the time is right for a much more focused and targeted approach.
We have a specialised team to help customers find the right option for them; further payment breaks on a case-by-case basis, loan restructuring, or establishing a new payment plan.
In many cases, businesses will need further lending – a capital injection to restock, rebuild and grow in the long-term.
For businesses that back themselves in the long term, the SME Recovery Loan Scheme is a great option. It’s a loan of up to $5 million over 10 years and repayments aren’t required for the first 24 months.
This has been made possible by the Federal Government’s commitment to guarantee 80 per cent of each loan for recent recipients of JobKeeper, and those adversely affected by recent floods, meaning lenders can offer lower rates than a typical business loan.
In addition to this scheme, NAB continues back Australian businesses, lending around $2.5 billion every month – creating investment, new jobs and opportunities.
In a recent visit to Queensland, where floods in some areas have compounded the challenges caused by COVID-19, I had conversations with dozens of NAB business customers. Many of them told me that the challenge they now face is not that they can’t operate because of COVID, but that they aren’t able to find enough staff to open up or operate at a capacity to meet the demand they are seeing.
A leading tourism representative in Cairns told me that some hotel operators were keeping rooms closed, not because customers weren’t coming to stay, but because they were looking for staff to clean them.
Businesses across Australia are roaring back to life and we’re determined to be here for our customers. We have put on 134 new small business bankers, based in more than 60 locations around Australia to do just that – meeting at their home, their farm or a local coffee shop.
Australia and New Zealand are well placed to benefit when international borders are open again and we can begin to take in international students and skilled migrants.
I’ve said many times in the last year that there’s nowhere in the world I’d rather be than in Australia or New Zealand. I’m sure many people overseas will have seen how we’ve dealt with this crisis and the opportunities and lifestyle we can provide and will want to live here.
I’m confident that with NAB’s continued support of customers, in combination with ongoing government support, Australia’s business-led economic recovery will continue at-pace.