Australia’s biggest lender says volatility in the global economy, and in particular falling commodity prices, was undermining confidence levels among consumers and businesses.
In a letter to shareholders, the bank’s chairman, David Turner, and CEO, Ian Narev, said weak confidence was a significant economic threat and urged the Government to act.
“Businesses need the certainty to invest to create jobs, and households need a greater feeling of security,” they wrote.
“That requires implementation of a coherent long term plan that clearly addresses targeted government debt levels and time frames, infrastructure priorities, foreign investment, business competitiveness policies and job creation.”
Narev in February urged the Government to act to address sagging business confidence as he unveiled the bank’s record $4.6 billion first half profit.
He said that while the economy was fundamentally sound, the outlook was clouded by weak consumer and business confidence, which was hurting spending and investment.
Consumer confidence has been in the doldrums since May 2014 amid uncertainty around the Federal Government’s Budget policies.
The latest Westpac/Melbourne Institute consumer confidence index fell 1.2 per cent in March, while the National Australia Bank business confidence index fell to its lowest level in two years.