ABA CEO Simon Birmingham interview on ABC Radio National Breakfast with Sally Sara

E&OE
Radio Interview
ABC Radio National Breakfast with Sally Sara
12 November 2026.

Topics: Loan applications; Hardship support; Productivity; EU-Australia free trade deal

Sally Sara: You’re listening to Breakfast, Sally Sara, with you, coming to you from Melbourne this morning. Well, two of Australia’s big four banks, ANZ and Westpac, are in the hot seat today at a parliamentary committee hearing. It comes amid new signs of a sustained slump in the housing market, with new home loans falling a record 15 per cent in the September quarter, that’s according to data from the Australian Bureau of Statistics released yesterday. Meanwhile, the latest Westpac consumer sentiment index shows mortgage holder confidence has sunk to its lowest level in decades. Simon Birmingham is chief executive of the Australian Banking Association, which represents the Big Four and joins me now. Simon Birmingham, welcome back to the program.

Simon Birmingham: Good morning, Sally. It’s good to be back.

Sally Sara: We’ve got quite a bit of data here. How would you describe the state of the housing market at the moment, given these latest figures?

Simon Birmingham: So, the housing market is clearly in a period of change that we have seen, really the impact of two major policy decisions during the course of the year. One is the Reserve Bank’s decisions in relation to monetary policy, which have seen interest rates increase significantly, and it’s quite consistent if we look at the long-term cycles to see downturns in relation to activity when rates are increasing and at their peak, and then upturns when rates decrease and they’re at a lower level. But of course, coupled with this, we’ve also seen the tax policy changes by the government, which were obviously intended to have an impact in terms of the investor housing market. But together, we’re seeing significant impacts right across the categories of housing investors and homeowners.

Sally Sara: Should the government be worried by what’s happening?

Simon Birmingham: As I said, there is a very long-term trend that is evident to all if you go back over the data to see the impacts and the interrelationship between interest rates and prices and activity in the market, but obviously there is an additional factor here in terms of the much steeper decline in investor activity, but that is clearly by policy intent in terms of changing the balance between homeowners and buyers versus investor buyers.

Sally Sara: How far is the market away from touching the bottom here? Is the banking association concerned that this downward trend still has a way to go?

Simon Birmingham: Well, Sally, I’m not an economic forecaster, but if I look at the forecasts of the economists, there are various predictions which do suggest there might still be a little way to go. But there is also a degree of confidence that, frankly, due to supply shortages in the Australian market, there will be a bottoming out. But you do right now live in an environment where buyers are of course, responding to market conditions. And if people can afford to wait to see where the bottom may be, then they are inclined to afford to wait to find that bottom. But as always, the risk of waiting too long is you miss the bottom, and that’s a judgment that individuals will make in their activities. But there will clearly be a floor, we’ve seen that in the past, we’ve seen the market rebound in the past, whether it rebounds as strongly without the same levels of investor activity will be something to watch this time around.

Sally Sara: When we look at the figures, the Commonwealth Bank’s latest reporting shows an increase in mortgages in arrears of more than 90 days. Are the major banks seeing an uptick in calls and requests for hardship support during this time?

Simon Birmingham: There is a modest uptick that in the CBA’s case is rising to around 0.8% in terms of people in arrears of 90 days plus. Put that in context, that’s about 15,000 customers, it’s a six year high, so it is a higher point than we’ve seen for a little while, but it’s by no means unprecedented. And the real message we have to customers right across the industry, whoever you bank with is if you are finding yourself in a situation where you are struggling to actually make and maintain your repayments, or you think that is about to happen, you should reach out to your bank early. That nobody should wait. It is far better to have earlier discussions than later discussions with your bank in terms of hardship relief and the various options that may be available, whether that is potentially moving to interest-only options for a short period of time, looking at the length of loan, or other forms of restructuring and refinancing.

Sally Sara: Are there concerns about borrowers falling into negative equity as interest rates go up, borrowing power goes down and prices are dropping?

Simon Birmingham: Well, negative equity, of course, only becomes an issue if and when people actually need to sell. But logically, as you see these types of increases, there will be a small movement at least. In relation to negative equity, that as prices are falling and the market is moving in that direction, some who may have borrowed at higher leverage rates may face that negative equity consequence. However, in the overwhelming majority of cases, we have quite cautious lending standards in Australia. Most people overwhelmingly are able to meet and maintain their loan repayments, and most will work through that cycle and come out the other side and find themselves in positive equity when the market recovers down the track.

Sally Sara: You’re listening to Radio National Breakfast. My guest is the CEO of the Australian Banking Association, Simon Birmingham. Australia’s inflation problem is becoming stickier as productivity continues to lag. It’s been more than 400 days since the treasurer’s productivity roundtable. Has the government made enough forward momentum on productivity since then?

Simon Birmingham: Productivity is really important because the way we can have economic growth without inflation, and so while at present the focus is rightly on trying to reduce inflation, and that needs to see spending restraint and the efforts to work with this Reserve Bank in terms of their monetary policy settings. We also need to see even more effort in terms of productivity. As a banking industry, we’ve been happy with a number of measures the government has applied in terms of the financial services sector. They seek to encourage competition with mid-tier banks, which is healthy, they’re working on how to make lending easier through sharing of tax office data, which is welcome. But this isn’t just a treasury or a financial services sector problem. And really, the message we would make is that right across Commonwealth and states, every department, every minister needs to see productivity as their problem, and how do they get things moving faster and approvals moving faster. Just like in the Treasury portfolio, for example, they’ve got foreign investment approvals moving faster. We need to see that in building approvals, in business startup applications, in every area to make it a much more efficient and productive environment.

Sally Sara: ANZ and Westpac are appearing before the Economic Standing Committee review of Australia’s big banks today. NAB and CBA will appear tomorrow. They’ll need to account for significant job cuts and outsourcing of roles. What is the message the sector is delivering?

Simon Birmingham: Well, they will face a range of questions about the economic conditions and the actions in banks, and this is a very unique accountability that Australia’s largest four banks undertake. It is unparalleled anywhere else in our economy for large private businesses to have this annual tempo of appearing before the House of Representatives, but they do so willingly, and will cover a range of issues that no doubt will touch on some of the ones we’ve discussed, as well as the heightened degrees of competitiveness that people are seeing in the industry and what that is meaning in terms of changes in industry dynamics. We’ve seen not just big competition for home lending, but also a real shift to competition for small business lending, where the average rate paid by Australian small businesses relative to the cash rate has declined over a period of time, giving increased competition there. But all that competition requires pressures on the cost side of any business, and in this case, the cost side of banks, to be as efficient as possible.

Sally Sara: Simon Birmingham, a bonus question with 30 seconds to go. As a former trade minister, do you think the EU trade deal is going to get through?

Simon Birmingham: Well, it should get through, Sally. It is a deal that is in Australia’s national interest, it’s really important, not just to our trade in goods or services, but also critically to investment, we should be wanting more investment out of the EU. It is a stable market for investment, and that is something I would urge parties to also prioritise in their consideration. And really, our trade policy should be bipartisan, I helped get the Labor Party across the line a number of times when unions and others were uncomfortable with previous deals, and I would urge my former Coalition colleagues to work constructively with the government and the Greens or other parties to make this a reality.

Sally Sara: Simon Birmingham, we’ll need to leave it there. Thank you.

Simon Birmingham: Thanks, Sally. My pleasure.

Sally Sara: Simon is the Chief Executive of the Australian Banking Association.

Ends