But bank's new survey shows four in 10 Australians face financial difficulties
The head of National Australia Bank says the economy is resilient, even as a new survey from the bank shows that four in 10 Australians are dealing with financial difficulties.
On Friday, NAB economists released a report showing four in 10 Australians are under financial stress, with wellbeing scores plummeting in the lowest income bracket, according to a report by The Australian.
However, NAB CEO Ross McEwan (pictured above), speaking Friday at the launch of a Salvation Army fundraising effort, said that Australia’s overall economy was strong, with the mining, energy and agricultural industries doing “incredibly” well, The Australian reported.
However, McEwan acknowledged that some households were chafing under growing financial strains.
“While we’ve got this magnificent economy going so well, and is the envy of the rest of the world, we’ve got a group underneath that is really, really struggling,” he said.
NAB and other financial institutions have steadily hiked mortgage rates to match the increase in the cash rate, which the Reserve Bank of Australia has raised 10 times since May 2022.
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McEwan stressed that the higher rates were an attempt to control inflation, The Australian reported. When asked whether NAB could help homeowners by simply not passing on cash rate hikes, he said that course would upset many people, including depositors whom he said were benefiting from rising interest rates. The big banks have come under scrutiny for failing to pass along full rate rises to savers.
“I’m not too sure the Reserve Bank would enjoy me not joining it, nor would my shareholders, but I think the Reserve Bank probably wouldn’t,” he said. “And [the higher rates] are there to slow the economy. Just as when it was down it was to actually speed the economy up, on the way back up it’s actually to slow it down.
“At the moment, people are getting a wee bit caught in the middle of all of this, but it’s really inflation that’s getting hold of people. It doesn’t matter whether it’s a grocery bill, petrol bill, a power bill – every bill’s going up.”
Cost-of-living concerns
While McEwan extolled the economy’s strength, NAB’s survey showed overwhelmingly negative responses when consumers were asked about the effect of cost-of-living concerns on their wellbeing, The Australian reported.
The survey showed a significant rise in respondents saying that their mortgage and other debts were negatively impacting their wellbeing.
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