Some of the record $240 billion Australians saved during the pandemic needs to get back into circulation, CEO says
The estimated $240 billion in savings Australians have built up during the COVID-19 pandemic is “too much” and needs to find its way out of savings accounts and back into circulation, according to ANZ chief executive Shayne Elliott.
However, Elliott said there was no magic bullet to convince Australians to start spending more freely amid worries about the economy and international affairs, The Australian reported.
Speaking at a lunch in Melbourne held by the State Library of Victoria, Elliott said the billions currently sitting in Australian bank accounts was “too much,” but many people didn’t know what to do with their savings.
“It is true, there is an extraordinary amount of money sitting in banks at the moment,” Elliott said. “We don’t know what to do with it – there’s just too much of it, literally. When does it get spent? What is the release? So what is the necessity when people need to spend money? They need the capacity [to spend] – we have that – and they need the confidence. They need to be able to look out the window and look forward with some degree of confidence about what the future holds.”
Elliott said that confidence was in short supply thanks to uncertainty around world affairs like the war in Ukraine and questions about what would happen next with COVID-19, The Australian reported.
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“In almost every environment, good, better and indifferent, you can work around that as a small business or bigger business, but you need to have some degree of confidence [that] the world is going to be reasonably consistent,” he said. “The problem at the moment is just, there are too many variables, so people are just unsure. Will there be another wave of Omicron? What is going to happen in Ukraine? There is no magic formula, and there is no way a government can solve all those problems, sadly – because that would be nice – but it is about uncertainty overlaying the system at the moment.”
Australians have saved as much as 17.2% of their income since the pandemic began in early 2020, compared to just above 6% prior to the pandemic, pushing savings to record highs that Treasurer Josh Frydenberg labeled a “damn lot of money.”
