HECs, housing and the global economy: NAB CEO joins Morning Call podcast

14 February 2025
Housing  Consumer Spending

NAB CEO Andrew Irvine appeared on the Morning Call Weekend Edition to share his outlook on the global economy and the year ahead.

In a wide-ranging discussion, Mr Irvine reflected on global trade policies, the housing crisis and how the industry is working to fight scammers.

Economy: 2025 will be a better year than 2024

Mr Irvine said Australia comes into this period with a lot of strengths.

“We’re a trading nation so we do rely on flows of trade more than many other countries,” Mr Irvine said.

“But we have a pretty diverse set of trade flows with frankly, a bigger focus on Asia and Southeast Asia. I think that puts us in good stead.

Mr Irvine also noted that in comparison to many other nations, including the UK, Australia is better placed due to macroeconomic fundamentals including its strong migration and resource advantages.

“That was true in the eurozone economy when I was in Paris and so it does, I think, make you feel how fortunate we are to live in Australia. Despite how hard it is here we still are in a better position than most other (nations).

“The biggest issue that we have in Australia is a lack of productivity. That’s the first, second and third issue that we face. And that’s manifested across the board, including in the housing crisis that we have.”

Reflecting on NAB’s latest Monthly Business Survey, Mr Irvine said it’s tough out there for many businesses but he remains optimistic for the longer-term economic outlook.

“Businesses are getting by, as are consumers, but it’s tough,” Mr Irvine said.

“Confidence is going to be important here because it drives investment and hiring decisions.

“If we do see a 25-basis point reduction next week from the RBA, I think that will continue to add to confidence.

“I continue to be optimistic for Australia and feel like 2025 will be a better year than 2024.”

Housing: a supply-side issue

Mr Irvine welcomed changes made to HECS treatment this week, saying it would make it easier for young Australians to enter the market, but said more was needed to be done when it came to housing.

“On the margin, what it means is many younger Australians will be able to borrow a little bit more today than they would have been able to last week,” Mr Irvine said, on the new HECS changes made by Treasury.

“I think that’s a good thing for Australians, but I do reiterate that 95% of the issue here is supply.

“If we can get more houses coming on the market, that will provide more opportunities for people to enter the housing market.”

Mr Irvine said there were three things needed to help drive housing supply in Australia.

“We really need to get more housing construction going. We need more immigrants with construction skills. We need simplified and faster planning permission.

“All these things need to be looked at as well as methods and modalities of construction. We’re seeing more use of things like modular and I think this will have a big impact on construction here in Australia.

“If you don’t fix supply and you add to demand, all you’ll do is increase prices.”

Scams and fraud: shutting Australia’s door on criminals

Ahead of the Government’s Scam Prevention Framework (SPF) being passed this week, Mr Irvine said its critical all industries work together to stop the crime before it happens.

“The question we need to be solving is how to make Australia the hardest place for criminals to take our hard-earned money,” Mr Irvine said.

“The focus we have had as an industry, working with government and telcos, is working. Fraud and scam losses are falling in this country in a way they’re not falling in some other global jurisdictions.

“We need to put all of our efforts into educating our customers and improving our capabilities to make it harder for criminals.”

Mr Irvine warned that AI would “raise the burden” for all industries.

“Deep fakes are coming, and we’re going to have to continue to innovate around that because the criminals certainly will,” he said.