Good morning.

When we last appeared before this committee in September, Australia was six months into a global pandemic and facing great uncertainty, both on the health front and economically. As I address you today, much uncertainty remains, yet we also see significant cause for optimism.

Foremost, Australia has continued to manage the risk of community infection effectively. Outbreaks have been contained.

In terms of the economic recovery, we are far more advanced than we had anticipated. The employment numbers have been very encouraging, with over 87,000 new jobs created in February alone, bringing the unemployment rate below six per cent.

Equally, indications of consumer confidence have lifted strongly, in some cases to more than decade highs. When combined with surplus household savings, estimated at more than $120 billion, this points to strong growth in retail spending over coming months.  

Australia’s economic resilience speaks to the sensible policy-making of successive Australian governments, which have left our economy able to respond to shocks.

For customers of the Commonwealth Bank, of the 158,000 home loans where payments were put on hold, almost all have exited deferral. This is equally true of the approximately 83,000 business loans. This is a remarkable outcome and a strong testament to the hard work and commitment of our customers.

We are proud to have been able to support them through that challenging period, not just financially, but also by making information available about benefits and support, including sending Covid related support messages via our Commbank app.

We are conscious that some of our customers still face difficulties, and while they are a small proportion compared to where we were this time last year, each represents a family, an individual or a business. They include those touched by extreme weather in New South Wales, Queensland and Western Australia; those rebuilding from last year’s fires; and businesses more dependent on the flow of tourists or students from overseas, or on workers returning more regularly to our cities and towns.

We are focused on providing targeted assistance to customers, whether that be so they can stay in the family home, or because they are experiencing a form of vulnerability. We and the industry put substantial support in place throughout Covid. We remain focused on providing targeted assistance to customers who need it most.

Turning to the outlook for the economy, understandably economic policy-makers will be very focused on the appetite for private investment, as the key engine of recovery. We have seen business owners thinking carefully about making additional investments and taking on more debt.

However, we have also seen great ingenuity, resilience and resolve among the businesses we serve. With Australia’s continued success in combatting the virus, we believe that the high levels of business confidence we have seen will translate into additional investment and jobs in the coming months.

Our Economics team are forecasting 45,000 additional jobs to have been created in the month of March, reducing the unemployment figure to 5.6 per cent. Based on the positive momentum we are seeing, our Economics team have also upgraded our forecasts for GDP and employment, and expect to see unemployment at 5.0 percent by the end of calendar 2021, and 4.7 per cent by the end of 2022.

Vital to this will be effective access to finance. We are proud to have been the leading partner in the Government’s Small and Medium Loan Guarantee Scheme, with Commonwealth Bank accounting for around half the loans that were extended.

This last year has seen us make fundamental improvements to underlying processes so that we can expedite the process for approving business loans. At the same time, we have grown our exposure to a range of industries, including health, agribusiness and transport.

Our intention is to continue to support our business customers, and so we are continuing to talk to businesses around the country about what we can continue improve further.

Equally of interest to this committee I know is the impact of a low interest rate environment.

While we continue to monitor housing demand closely—conscious, as we are, of any build-up of systemic risk — a number of factors distinguish this period from price increases we have seen in prior cycles.

Some of the largest price gains have been outside of the major cities, areas which had seen subdued price increases or even falls in the preceding years. Also, a much greater share of demand in this instance is coming from first home buyers and owner occupiers.

These factors are positive, not least because it means more Australians are buying their first home, but also because they point to greater stability in the market through the current cycle.

We also hear regularly from customers about the effect of the low interest environment on returns that are available to depositors.

The task of balancing the multiple factors that determine the economic trajectory of the nation is as challenging as ever; however, we see many encouraging signs. We are committed to continuing to play our part in realising Australia’s ongoing economic recovery.

Thank you.