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National Australia Bank chief executive Ross McEwan has backed some form of cost-of-living relief for households being squeezed by high inflation, but says it should be carefully targeted to people on lower incomes.
Treasurer Jim Chalmers has said Tuesday night’s budget will aim to deliver responsible cost-of-living relief, and economists say it is also important this doesn’t fuel even higher inflation by stimulating consumer spending.
NAB chief executive Ross McEwan supports cost-of-living relief for people on lower incomes.Credit: Elke Meitzel
McEwan said he would leave the details of this balancing act to Chalmers. But he backed support for people on lower incomes who were struggling with the pressures of high living costs such as rent, groceries and petrol.
“That is the balancing act of how do you put more money into the system for those who desperately need it without fuelling inflation – which just makes it worse for the people you’re trying to help,” McEwan said last week as the bank delivered its half-year results.
“It is a balancing act, and I’ll leave that to Jim Chalmers to get right,” McEwan said.
“But what I’d like to see is that the money goes into those who are on the lower incomes, and the families that are struggling, and that’s for him to work out how to get it into their hands.”
‘What I’d like to see is that the money goes into those who are on the lower incomes, and the families that are struggling.’
There have been reports this week’s budget will include targeted support for some in the community, including recipients of JobSeeker who are older than 55. It has also been reported there will be measures on power price relief, following policies in this area first announced late last year.
Charities are focusing on securing donations in wills as cost of living impacts funds.Credit: Andrew Quilty
ANZ Bank chief executive Shayne Elliott said finding ways to support people who were under financial pressure, without making the inflation problem worse, was “extraordinarily complicated”.
He did not offer an opinion on how such support could be targeted, but also said there was a careful balance to be struck because putting more money in people’s pockets could sometimes make the inflation problem worse overall.
“So it’s about getting the balance right. How do I help those that are vulnerable, help those that are in stress without exacerbating the problem for everybody else?” he said on Friday after ANZ’s results. “I think that’s extraordinarily complicated. I’m sure they’ve got really smart people thinking through how you get that balance right.”
ANZ’s results showed a small increase in home loan customers who were 90 days behind on repayments, and Elliott said the main reasons for this continued to be family breakdown, illness, and people losing their job. He said the bank had not seen any particular industries, or regions, driving the slight rise in arrears.
Macquarie chief executive Shemara Wikramanayake did not express an opinion on whether there should be cost-of-living support measures in the budget, saying this was a matter for the government.
Wikramanayake said the bank had not seen an increase in stress among its mortgage customers yet, as Macquarie had focused on customers with headroom to absorb rate rises, and it had few borrowers on low fixed-rate loans.
Westpac chief economist Bill Evans has also previously backed budget measures to provide relief to people who were “really doing it tough”.
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