EDITORIAL: Bank boss puts heat on Labor to act on economy
When the boss of the country’s biggest bank is warning that Australians are taking on too much mortgage debt, you know things have gotten out of hand.
Commonwealth Bank chief executive Matt Comyn should be delighted that skyrocketing house prices are leading Australians to take on bigger loans.
After all, it’s great for business and it is the bank’s status as the nation’s biggest lender that helped it reap a $2.6 billion cash profit in just the first three months of the financial year.
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By continuing you agree to our Terms and Privacy Policy.But even Mr Comyn can see past the profit to the downside of all that debt.
Mr Comyn estimated housing credit growth at about 6 per cent in the most recent quarter, and greater among investors.
“Obviously we benefit as an institution where housing credit is higher, but for long-term financial stability, for equality and access to the housing market . . . I think that’s probably pushing a higher level than regulators might be ultimately comfortable with,” he told the House of Representatives economics committee.
“A more sustainable growth in housing credit would be below the current level.”
Mr Comyn said part of the answer to the housing affordability conundrum lay in cutting Australia’s migration intake.
“Perhaps that number is something in the order of 180,000 per annum,” Mr Comyn said.
“It gives both the Commonwealth and states the ability to plan for critical infrastructure, including housing.”
Treasury has forecast net migration at 260,000 this financial year, which is a three-year low following on from a post-pandemic surge during which the nation added close to one million residents in just two years.
Mr Comyn’s comments will no doubt add fuel to Australia’s already fiery migration debate.
The Liberals are mulling a policy to cut the annual net migration intake by 100,000, a move they claim will ease pressure on housing, hospitals, schools and infrastructure.
It’s a policy shift that is motivated as much by the party’s desperation to staunch the flow of its conservative base to One Nation by bringing the focus back to kitchen table economics, as it is by leader Sussan Ley’s desire to placate its agitated right flank.
Mr Comyn’s comments indicate they might be onto something for the economy too.
None of what the CBA boss told the parliamentary committee should come as news to Treasurer Jim Chalmers. The pair are known to share a strong friendship.
Hopefully they have also discussed Mr Comyn’s prediction for the cash rate — that it is unlikely to fall much further from its current level of 3.6 per cent as inflation reawakens from its short-lived slumber.
Updated forecasts from the Reserve Bank show that trimmed mean inflation is now not expected to be back within the target band until the second half of 2026 — bad news for mortgage holders who have been forced to borrow big because of an overheated housing market.
