ANZ CEO appearance before House of Representatives Standing Committee on Economics
Shayne Elliott opening remarks:
Australia is at a challenging point in the pandemic, with many unwell, restrictions in place, and loved ones sadly dying.
However, people are getting vaccinated at an encouraging rate.
This allows us to look forward to the country opening up in line with the National Plan. And, as we do, there is some reason for confidence in the economic outlook.
The easing of restrictions should allow a return to more normal activity and, as a result, lift economic growth to 4% next year.
Victoria’s lockdown history suggests that spending should bounce back, with consumers making up for lost time.
While unemployment will sadly increase over the coming months, our data suggests there is underlying resilience in the market.
Consumers and small businesses continue to make the best of difficult circumstances – paying down their most expensive debt, building resilience into their budgets and continuing to save at historically high rates.
When COVID first hit, companies let go of employees to control costs. Government support programs were quickly developed to reduce the impact.
Now, despite extended lockdowns, many employers are keeping people in jobs in anticipation of restrictions lifting and staff shortages.
On housing, we expect capital city house prices to have increased year-on-year by just over 20% at the end of 2021, with even greater price increases in regional areas.
In 2022, we’re forecasting further but more modest gains, at around 7% in capital cities.
While the economic outlook is generally positive, there are two notes of caution.
First, we will be living with COVID in 2022, and certain sectors may continue to face headwinds. These include education and retail and hospitality in our CBDs.
Second, while today’s interest rates have kept servicing costs historically low, current house prices make it harder for some to enter the housing market.
This could translate into a further shift in wealth distribution towards older, more established families and, if perpetuated, raises the issue of greater economic disparity.
As one of Australia’s key providers of home loans and development finance, we have a role to play in ensuring lending standards remain prudent while developing opportunities for young Australians to pursue their dream of owning an affordable and livable home.
That said, existing home loan customers are in better shape at the moment than you might expect.
Like last year, we’re here to help those who need it. Pleasingly, loan deferral applications for both home loan and small business customers are a fraction of what they were last year.
As of last Friday, only 0.2% of our one million home loan customers have a deferral in place versus a peak of 7.1% last year.
For small businesses, we only have 0.08% currently on deferral versus a peak of 10.1% last year.
In addition to providing deferrals, we’re also supporting small businesses with targeted relief and funding for those who can use it.
- Extending our 30 year small business loan terms to borrowings of up to $3 million; and
- Launching GoBiz, our online unsecured lending portal that can provide conditional approval in minutes, with funding in as little as two business days.
So far, we’ve written about $1 billion in loans with partial Government guarantees. This program has helped many businesses to survive and grow. We welcome the scheme’s recently expanded scope. These changes will provide more businesses with finance to help them rebound from the pandemic.
We’re also supporting our customers and communities across the Pacific. We have been waiving transfer fees on international transfers sent via our phone and internet banking to a range of Pacific islands. Today, I can announce that, from 1 October, we’ll be extending this waiver indefinitely. This will help our customers support their families and loved ones back at home.
When I last appeared before the Committee, you asked me to suggest areas of reform. Through the pandemic, I have been increasingly troubled by scams targeting our customers. We saw a 73% increase in scams detected or reported by our customers in the first eight months of 2021 compared to the same time last year. Over this time, our retail customers sent about $77 million to scammers, of which we were able to recover almost $19 million.
We have increased our dedicated scam prevention team from 19 to 27 people, with our frontline people also playing a role. Our data suggests the average age of scam victims is 59 and 44% are aged over 65. The most prevalent and successful scam involves criminals gaining remote access to customers’ computers and devices. We have seen a year on year increase in investment scams of around 53%. A high proportion of these involve crypto currency. There is good work going on within industry and Government to tackle this problem. For example, the ABA launched a scams awareness campaign yesterday.
However, more needs to be done. This Committee could help by inquiring into the problem, raising further awareness of the dangers and recommending any additional steps industry and Government could take.
Kathryn and I now look forward to your questions.