NAB chief executive Andrew Irvine (pictured left) has urged Australia to confront three fundamental productivity challenges to resume a 100-year “economic miracle” where each generation has enjoyed greater prosperity than the previous one.
Irvine listed the challenges as spiralling energy costs holding back manufacturing growth, a housing crisis limiting immigration and the dream of homeownership, and jobs growth dominated by low-productivity roles in the public service and care economy.
“You need the care economy because we’re getting older, but we’ve got to have less civil servants and enable businesses to hire because right now we suffocate them with red tape,” he told a NAB Business Summit.
“The problem is we’ve been talking about (these issues) for 10 years. We’ve got to stop talking about it, push into it and start acting.”
Irvine said artificial intelligence would be as consequential as previous industrial revolutions ignited by electrification, automobiles, mobile telephones and the internet.
“We’re talking about something that is going to change how we live and work, profoundly. That’s a fact,” he said.
“Of course, at NAB, we’re going to take advantage of it, or we will not exist as a company in 50 to 100 years. Companies like Kodak and Blockbuster go away if they don’t take advantage of big things. Every big industrial wave destroyed lots of jobs and created lots of new ones. That’s the nature of creative destruction.
“But what I will say, and this is really important, is that AI is not going to take away people’s jobs. People using AI are going to take the jobs of people not using AI. We’ve got to get people to learn and not have fear.”
While challenges remain for businesses, including tariffs, cash flow constraints and global volatility, Irvine said green shoots were appearing across the economy.
The lower cash rate had brought some relief to households, and the Reserve Bank was carefully steering the nation towards a hoped-for soft landing. Confidence was building, he said, but it was a matter of harnessing it collectively.
That optimism aligns with national accounts showing GDP grew 0.6% in the June quarter and 1.8% year-on-year, the first time in more than two years that GDP per capita has increased in annual terms. Household consumption grew 0.9% in the quarter – the strongest pace since late 2022 – supported by tax relief, lower rates and easing inflation.
Andrew Auerbach (pictured centre), new business and private banking group executive, said NAB’s confidence survey showed optimism at levels not seen since 2022.
“In fact, our confidence indicators are actually at levels we haven’t seen since 2022, so I think there’s just an enormous opportunity in front of us as we think about all of this geopolitical uncertainty,” Auerbach said. “I believe Australia can be a great beneficiary of that.”
Cath Carver (pictured right), corporate and institutional bank group executive, said capital flows were shifting in Australia’s favour.
“At the same time, we’ve got big pension funds from Canada and Europe coming into Australia and spending billions, whether it’s in agri or renewables,” Carver said. “So as sentiment slightly improves or stabilises at a high level, I think we’ll see more of that de-risking out of the US because there’s actually a lot about Australia that makes it very attractive compared to other countries around the world.”
After 11 weeks in the job, Auerbach said the business bank needed to “dramatically simplify” to help bankers deliver for customers.
“AI is a huge part of that,” he said. “As we think about process simplification, we’re already deploying workflow that simplifies the amount of time it takes to get to (a yes decision). So, a big part of my job and a big part of how we work is simplification. It’s a core part of what we’re doing in the company.”
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