The economic impact of the COVID-19 pandemic has been significant, with many businesses struggling and spending levels dropping. In a recent interview on 3AW Drive, Tom Elliott discussed these issues with Shayne Elliott, CEO of ANZ Bank.
Elliott acknowledged changes in consumer spending patterns: "It's dropped off. I'm not sure it's dropped off a cliff. It's certainly changed." He noted that while spending in areas like travel and dining out has decreased sharply, there has been an increase in online activity and grocery stockpiling.
Regarding borrowing trends, Elliott observed responsible behavior among consumers: "We're not seeing a lot of people asking to borrow more." Instead, many are opting for payment holidays offered by banks during this uncertain period.
The federal government's JobKeeper scheme has played a crucial role in mitigating economic distress. According to Elliott, "It's absolutely massive...putting a bit of money into people's pockets has been an enormous saving grace."
On unemployment rates, Elliott shared a cautious outlook: "We don't think so," referring to whether Australia might see unemployment rates similar to those recently reported in the United States. He expects the rate to peak below 10 percent.
When asked about Victoria's strict lockdown measures compared to other states, Elliott expressed understanding: "I can understand that...Let's hope it's not for too long though."
In terms of loan assessments during the pandemic, ANZ does not make industry-based judgments: "We do look at a range of indicators...but no, we don’t make judgments based on what you do."
Finally, regarding shareholder dividends suspended due to the crisis, Elliott assured they would return: "It'll be back. And it's just a question of timing." A decision is expected by August after assessing more information.
Shayne Elliott concluded by emphasizing the importance of making informed decisions amid ongoing uncertainties.