National Australia Bank chief warns productivity crisis threatens Australian living standards

Australia’s lack of productivity gains could impact the economy over the long term, a big four bank chief executive has warned.

In prepared remarks at National Australia Bank’s annual general meeting, chief executive Andrew Irvine said the Australian economy’s resilience is threatened by a lack of productivity gains.

The assessment comes despite NAB reporting the economy is in a relatively strong position with low unemployment, inflation falling back towards target, and GDP growth forecast to accelerate to 2.3 per cent by 2026.

“I am more cautious however, about the longer term,” Mr Irvine said.

The big four bank said there are areas where Australia needs to lift productivity.

“Initiatives in housing, regulatory simplification, Artificial Intelligence and technology

innovation, and, lastly, reliable, affordable and sustainable domestic energy offer the

potential for significant productivity gains,” Mr Irvine said.

Mr Irvine also told shareholders, despite the productivity issues, Australia is starting from a strong base with the economy remaining resilient to global headwinds.

“Economic growth has accelerated, with private sector activity improving over the course of the year. Unemployment has stayed low and, while the recent inflation data presents some challenges, inflation is much closer to target than it was two years ago,” Mr Irvine said.

He also noted Australian businesses and households’ financial positions were improving.

“Businesses are telling us they are feeling more confident than they were a year ago,” he said.

“Household incomes are benefiting from the cash rate cuts we saw in February, May and August of this year. Most of our mortgage customers have kept their repayments at higher levels so they can pay their loans down faster.”