NAB chairman Phil Chronican calls for ‘whole of government’ regulatory fix to restore confidence

Acting NAB CEO Phil Chronican. Picture: Adam Yip
Acting NAB CEO Phil Chronican. Picture: Adam Yip

National Australia Bank acting chief executive Phil Chronican has called for a “whole-of-government” approach to rejuvenate business confidence and encourage investment.

He said such an approach had worked towards the end of 2014, when concerted action across all arms of government, including regulators, had reined in the boom in house prices.

“The most important issue that I think our leaders in Canberra and our leaders in business need to focus on is that, if we’re going to have sustainable growth in Australia, it needs to come from business investment,” Mr Chronican said.

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“Therefore, the more we can do to drive confidence in the small business community, and ensure that we as banks are able to be in a position to support that confidence with credit, the sooner we’re going to get on to a sustainable growth path.”

His comments came after NAB reported a full-year cash profit of $5.097bn for 2019, down 10.6 per cent on the year previous.

The NAB chief supported commentary from his peers that the government’s continued reliance on monetary policy alone was reaching its limits.

The true impediment to business investment, he said, was the burden of regulation, including hurdles in credit approval processes.

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“In our own case, getting a clarified and simplified approach to the responsible lending issues would certainly be helpful,” Mr Chronican said.

“In the case of our customers, I think that a lot of it is tied up in many of the planning and development issues that they have to get involved with.

“It’s less of the security being put up and more to do with the confusion around whether or not the responsible lending legislation applies to self-employed business people who by nature have variable income.

“It’s just a complexity where we don’t have agreed market practice yet.”

While it was helpful to have medium-term tax reform, a better near-term stimulus to kickstart a business investment cycle was micro-economic and regulatory reform, he said.