NAB CEO Says Australia Has 10-Speed Economy

In a bid to restore business confidence in Australia, National Australia Bank (NAB) Chief Executive Officer Cameron Clyne insisted the country has a 10-speed economy, not a two-speed economy.

In a speech at the American Chamber of Commerce in Australia lunch on Tuesday, Mr Clyne explained the country never had a two-speed economy in the first place. He explained that for decades there were some industries that were strong, others were struggling, and some just coasting along.

While this situation has been ongoing for many years, he clarified that the 10 speeds operating now is different from the 10 speeds in the early 2000s and the 1990s. He cited as proof that among the firms listed in Forbes' top 100 in 1990, only 15 remain on the list.

"Part of the problem with this constant reference to two speeds is that people feel that if they are not in the express lane, they're going backwards, which is not the case," Brisbane Times quoted Mr Clyne.

The NAB executive stressed that restoring business confidence is the key to improve the Australian economy, not cutting interest rates. Like the three other large Australian banks, NAB has been resisting partly the Reserve Bank of Australia's (RBA) overnight cash rate policy by either pocketing some of the rate cuts made by the central bank or even raising their rates when the RBA opted to retain the existing benchmark lending rate.

He also sought more debates on Australia's worsening productivity rate and added that the solution to that problem is not hinged on more changes to the industrial relations system.

Mr Clyne's remarks came after Workplace Relations Minister Bill Shorten said on Sunday that the results of the review of the Fair Work Act would likely be released this week. However, Mr Shorten hinted there would likely be no new regulations to boost productivity.

"Regulation plays a role in contributing to productivity, as do other factors, as does world-class infrastructure, as does highly skilled workforce, as does the quality of managerial leadership within enterprises itself. There's no silver bullet to productivity," The Australian quoted Mr Shorten.