Don’t tough it out on your own
8 July 2022
ABA CEO Anna Bligh spoke to ABC Radio North Coast’s Michael O’Regan on the ways banks can help those impacted by floods in the Lismore region.
Michael O’Regan Okay, I now want to go to something completely different in a way but related in other ways, I suppose. And that’s actually getting sorted financially, which has become a major issue for thousands of people whose lives have been turned upside down by the impact of these floods.
Now, some people have had to endure a shocking trifecta of bad outcomes, a devastated uninhabitable house, no insurance, and an ongoing mortgage. The description “tough times” just doesn’t do it justice. And of course, it’s been exacerbated at times by dramatic increases in the cost of living.
The Australian banks have responded to the crisis by initially offering a three-month deferral on repayments. But what’s the situation now? Anna Bligh is the CEO of the Australian Banking Association. Good morning, Anna Bligh.
Anna Bligh Good morning. How are you, Michael?
“if you think you’re in financial trouble, or you might be, talk to your bank as early as you can, they’ve got very practical ways of helping. Don’t let a natural disaster turn into a financial disaster if you can avoid it.”ABA CEO Anna Bligh
Michael O’Regan I’m very well, thank you. Really appreciate your time. Tell me what the banks are doing now because that three-month deferral period has finished? Is there still a hiatus for people with their repayments?
Anna Bligh Well, I’m really pleased to have an opportunity to explain this, Michael, because I hope it gives a bit of peace of mind to people.
Firstly, I’d say banks are there for the long haul with their customers, they’re still supporting customers who were impacted by the fires in 2019 and I understand that for some people, this is a long road.
Secondly, in relation to the three months, the three months start from when you take the deferral. So there’s not really an expiry date for everybody, if you know what I mean. So somebody, for example, may not have had their house impacted, but their workplace was, and they thought they were fine but it’s become clear to them now they’re still not back at work and they might need help, so they might have only taken the deferral last week and that will now last them another three months. So everybody’s different, as I’m sure you’re aware.
And that initial three months was really banks saying to the community, we know this is a catastrophic event, we know you’re going to have to make a lot of really tough decisions and it’s not clear to you yet what they are because you don’t even know if you’re getting insurance or how much insurance. And so this is an initial breathing space, there will be people who need more than three months and banks certainly understand that.
It’s just that after the three months, it gets a bit more bespoke, if you like. It will be very much person-by-person, case-by-case, because every one of them will be so different. And the best thing for one person is going to be very different to another.
“…this is an initial breathing space, there will be people who need more than three months and banks certainly understand that.”
Michael O’Regan Now Anna Bligh, people are regularly told that they need to shop around, they need to get the best banking deal they can, they need to sort out the individual financial situation but you may have heard in the introduction, I mentioned that there are particular cases in the Northern Rivers now where people have experienced this terrible triumvirate of events, where they’ve got an uninhabitable house that’s been flooded, they’ve got no insurance, and they’ve still got a mortgage, how do you think a bank would deal with a person coming in that situation?
Anna Bligh Right, Michael, it is the most devastating of circumstances having all of those three things facing you. However, banks have faced this before with customers with similar situations out of other natural disasters. And it’s a good example of why these things are case-by-case.
It will depend on a lot of things, it will depend on how much of your mortgage you have paid off, how, what your personal circumstances are in terms of what savings you’ve got, what revenue you’ve got, how old you are, you know, whether you’re getting ready to downsize anyway. There are just so many factors that a bank would take into account.
You know, certainly there are examples where someone has endured incredibly catastrophic outcomes, and may have a range of other vulnerabilities where banks have waived some or part of the remaining debt. But I wouldn’t want your listeners to think that that’s something they’ll do for every single customer because they just wouldn’t be in a position to do that.
However, they will look at every single case on a case-by-case basis, try to do it as compassionately as possible, and to give people the best chance of getting back on their feet.
Michael O’Regan Now Anna Bligh, I know that as the CEO of the Australian Banking Association, you’re not advocating views for a particular bank, but you’re representing the sector? Can I ask you this general and more philosophical question, the banking sector makes a huge amount of money, it’s a very profitable part of the Australian economy. It’s where a lot of superannuation funds are invested. Is this crisis because of the way housing has become the focal point of what needs to change? Is this an opportunity for the Australian banking sector to invest massively in rebuilding affordable housing in places like the Northern Rivers?
Anna Bligh Well, potentially, I do know that many of our member banks have lending arrangements with community organizations that build social housing, for example, and that, you know, there may well be an opportunity, and some of them may well end up investing in, or lending to organisations that build and build back in places like Lismore.
But I think it’s important – people really do want to have that individual relationship with their bank, about their circumstances. Some people I’m sure are thinking that they maybe don’t want to live in Lismore again, others will be thinking, ‘this is my home, I love it and I want to stay here’. So everybody’s going to have a different approach.
“…they will look at every single case on a case-by-case basis, try to do it as compassionately as possible, and to give people the best chance of getting back on their feet.”
Michael O’Regan I almost called you premier then because now I want to go and talk to you about something when, when you were premier, I hope this is okay to pivot in this conversation to the flood recovery.
Before you came on Anna Bligh, we spoke to Anne Leadbeater who had a really crucial role in the King Lake recovery in Victoria after the bushfires and I’m really interested in speaking with you because of your role as the premier of Queensland in the 2011 floods, about your view of mid-to-long term recovery. And one of the things I’d like to ask you about is what did you find were the major roadblocks after the 2011 floods as premier to getting recovery off the ground? What had to happen for community-wide recovery to occur?
“…I do really feel for the people who are living already in very temporary housing, staying with friends, living with relatives, that is a hard thing to do for months on end.”
Anna Bligh Well, thank you Michael, there’s many reflections I could make, I think the first would be, and it sort of intersects with my current role, that for far too many people a natural disaster very quickly becomes a financial disaster and how important it is for government to play a role in supporting people through that and where possible, and as I said, institutions like banks to do the same, and insurers to take as compassionate view of the circumstances as they can.
But in terms of medium- and long-term recovery, I think I’d say a couple of things. Firstly, it’s just really important for everybody to understand that this will not be a fast process. You know, in Queensland, after the devastating floods in 2011, the scale of it was so large, that there are only so many builders, there’s only so many people who can be part of the reconstruction, big civil engineering firms, there’s only so many of them. So it’s just going to take longer than anybody wants, and longer than anybody expects, and being psychologically prepared for that, I think is important.
One of the things that we were advised, I was advised by the health advisors, that it’s quite a well established phenomena that after a big traumatic event like this, somewhere around the three to four month mark, is when a lot of people will become very psychologically vulnerable.
People who maybe have never experienced any mental health issues, it’s sort of that moment that that’s the time after all of the drama, all of the fighting with the insurance company, or, you know, fighting with, you know, battling to get answers from the council, or all that activity that happens, and keeps people moving on to the next step.
Once that’s all sort of starting to become clear, then people can really experience a bit of a down period. And I think we were very explicit about that, and talked about that very openly, put some more money into mental health counselling in those communities that had been affected. And I think, actually, people understanding that if they’re starting to feel like that, three months is not an unusual time for most people to be having that feeling. Because actually, recovery takes a lot of energy.
And in terms of blockages, just remembering that sometimes we all we’re all going to kind of dip and then we’ll come back up again and can be energetic and get things back moving and getting momentum. So I think the scale of this is and the fact that you know it also there was a big effect on Southeast Queensland at the same time. So the scale of this will really test the resources and how many builders that can actually help how many big civil engineering companies and their resources can actually get the job done.
“I’d say banks are there for the long haul with their customers, they’re still supporting customers who were impacted by the fires in 2019 and I understand that for some people, this is a long road.”
Michael O’Regan Do you think Anna Bligh, that given your experience in Queensland back in 2011, in the aftermath of those floods, that are focused on housing, getting people rehoused getting affordable housing in place? Should that be a number one priority?
Anna Bligh I find it hard to make a judgement without being the person who’s getting all of the briefings around Northern Rivers. Of course, people need to be given shelter as quickly as possible. But they also need, in many cases to also be able to get back to work. Major highways need to be made trafficable and all of those connections are just as important. Getting children back into school can often be a bigger priority immediately.
So I really don’t feel I can make a good comment, because I’m not well briefed about all of those issues in the Northern Rivers. I have been to Lismore a couple of times in the last month or so, and I’m very aware of the size of the task and I do think that the authorities, both state and council, have got an enormous job in front of them. And I do really feel for the people who are living already in very temporary housing, staying with friends living with relatives, that is a hard thing to do for months on end.
Michael O’Regan Absolutely. Look, I want to thank you so much for spending this time with me this morning. I have really appreciated your views on this recovery, as you would know from the position you’ve had, being in charge of marshaling those resources and delivering resources to people is a critical role. And I think your views are will received so thank you very much.
Anna Bligh Thank you, Michael. And I just if I can just say one thing, if you think you’re in financial trouble, or you might be, talk to your bank as early as you can, they’ve got very practical ways of helping. Don’t let a natural disaster turn into a financial disaster if you can avoid it.
Michael O’Regan Indeed, that sounds like great advice. Anna Bligh, thank you very much for your time.
Anna Bligh Thank you.
“Since the Banking Code was first introduced in 1993, the process to independently review the Code has continued to deliver improvements.”
“A number of our banks actually have maternity leave lending products that are specific to people on parental leave, paid and unpaid, to help them through, what as I said, can be a difficult time.”