Bank executive also highlights key other drivers to Australia's economic growth
Saying it could significantly lift confidence across the economy, NAB group chief executive and Australian Banking Association (ABA) chair Andrew Irvine (pictured above) has welcomed the Reserve Bank of Australia’s (RBA) recent decision to cut the cash rate by 25 basis points.
“I think it’s going to have an outsized effect on confidence,” said Irvine, speaking at the Trans-Tasman Business Circle’s Annual Economic Forecast event alongside ABA CEO Anna Bligh.
“Signaling that rates have peaked and now we are moving to a downward cycle is pretty huge. For the average homeowner, it’s probably an extra $100 a month, so that will help households. I think it will have an outsized impact on business confidence as well.”
Reflecting on the economic cycle, Irvine noted that conditions appear to be improving.
“I think the back half of last year was the toughest part in the economic cycle and we’re on the way up, so we’re optimistic about what 2025 will bring,” he said.
Irvine emphasised that boosting productivity, particularly in housing and the resources sector, is vital for sustaining Australia’s economic growth.
“The only way we can increase the long-term economic growth potential of our country is with productivity. Otherwise, when you grow, you get inflation,” he said.
The bank executive highlighted challenges in Australia’s housing market, citing delays in construction and planning as key obstacles.
“We’re just not creating enough dwellings,” he said. “The dwellings that we are creating take far too long from gestation to people moving in, and we know what the issues are: it’s hard to do planning.”
Irvine called for more innovation in construction, including the adoption of digital technologies, to improve efficiency.
He also stressed the importance of attracting skilled migrants to meet labour shortages in critical industries.
“We struggle in very specific areas to find the talent that we need in Australia – computer engineering, data science, cybersecurity – those types of modalities are really hard to find the right talent sets here,” Irvine said.
He pointed to the need for stronger STEM education pathways and more local graduates in these fields.
“We live in a country that many people want to come and live in. It’s one of the most amazing countries in the world, Australia, we’re very attractive to global talent and I think we need to look at the people that we’re encouraging to come here and wherever possible skewing to the areas where we have skill shortages,” Irvine said.
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