August 12, 2025 • 31 mins
Sean Aylmer sits down with Westpac CEO Anthony Miller in the second part of an extended conversation. This time, they start by looking at how to solve the housing crisis.
The episode was recorded in front of a live audience, hosted by the Trans-Tasman Business Circle.
Find out more: https://fearandgreed.com.au/
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Episode Transcript
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Speaker 1 (00:05):
Welcome to Fear and Greed. One on one. I'm Sean Alma.
Every week I sit with a business leader and find
out everything I can about their world. Last week I
shared the first half of my interview with Westpac CEO
Anthony Miller. Today we dive into the second half of
the conversation, which was recorded in front of a live
audience hosted by the Trans Tasman Business Circle. Okay, you
(00:29):
mentioned your submission to the Economic roundtable that's coming up
next month. The very first point Westpac may was on housing.
Tell me how do we solve the housing crisis?
Speaker 2 (00:43):
First of all is a very hard question. I think
a couple of things. One is there's a tremendous amount
of alignment right across community, government or layers of government, regulators, business, union,
et cetera. That we've got to solve this and it
cannot be and we cannot be the number one country
in the world if we don't solve this challenge. Everyone
(01:06):
in Australia should feel and have the ability to say,
if I can, I will be able to buy a property.
You know that we give them that hope and at
the moment, the worry is that that is not something
that we're delivering on. So I think it's great that
everyone's aligned around it. What we need to do is
just really go after those approval processes. Many of the
(01:31):
initiatives and many of the ideas that have been promoted
around housing over the course of the last five plus
years have really focused a lot more on the demand side,
and what we really need to do is to focus
a lot more on the supply side and getting more
houses at the right price point into the marketplace. And
(01:51):
so approval processes in many ways are too slow, too inconsistent.
There's other things we reckon. Meant you could, for example,
remove the upfront costs that's imposed upon the developer and
the builder and back end those costs so that they're working.
Capital train for the developer is something that is solved
(02:13):
when the project is completed, as opposed to challenged and
imposed upon them day one. And so what we think
is the priorities, how do we build more houses, more
properties at the right price point and thus start to
solve the supply challenge for Australia.
Speaker 1 (02:31):
But does a big bank have a role in that?
And your building example, I recently did a building and
there were eight payments which I withdrew from my bank
and gave to my builder. After the builder I put
the money up front and then they got paid in
eight payments. So there is an approval regulatory issue, But
there's also a role for the banks too, isn't it.
Speaker 2 (02:52):
I think that's right. I think also particularly for the developer,
if the large amount of up front costs and approval
costs that they have to pay is back ended when
the project's completed, the working capital drain on them is reduced.
That means they therefore don't need to seek as many
(03:14):
early stage payments from you the owner the developer, and
so therefore it reduces the demand upon them. And then
of course as a bank, we can and would be
able to contribute to helping them solve any other working
capital needs that they might have. But the very fact
that the cash drain on the company is not realizable
(03:36):
until the project is completed safely just means it's a
much more attractive and a much safer proposition for any lender.
And so therefore that's how we would and it does
complement what we promote.
Speaker 1 (03:50):
Okay, housing fixed tax reform next one JST start there.
It's a very very difficult political player doing anything to
the GST, and no political party since how I'd introduced
it has really been able to do anything broad in it,
increase it. What's your take on tax reform and should
(04:13):
the GST be included. I'm not going to ask you
directly whether you think it should be higher or broader,
but if we're going to have a tax reform debate,
do we need to talk about the GST as part
of that.
Speaker 2 (04:24):
Well, I think, first of all, tax reform just catalyzes
so much emotion and so much engagement right across the community,
and so when we thought about our submission to the
Productivity round Table, I just thought it's sort of going
to somewhat distract and dilute the focus on things that
(04:46):
can be implemented and can be done now to start
talking about substantive and significant tax reform. And so therefore
our submission was very much focused on a very readily implementable,
often discussed and therefore could be quite quickly implemented bracket
(05:06):
creep measure. All of the other areas that you want
to deal with from a tax reform perspective, whether it
be GST broadening it, What do you do in terms
of taxing, investment versus income. All of those things have
so many knock on effects for the economy that we
(05:27):
just think that that will just create too much distraction
and not be a realistically implementable set of reforms. And
therefore don't let it crowd out what you can achieve
by sitting around the table at that round table working
on all these other things that are very much implementable
that will improve productivity and help Australia growth. So I'd
(05:49):
like to see tax reform, definitely want to see a
debate around what we might do, but I would pull
it a little bit away from the productivity table because
it's so complicated, it is so emotional, it is so hard,
and it has a risk of diluting and distracting everyone
who are there to do a really good job for Australia.
Speaker 1 (06:11):
I'm not going to let you off the hook on
that one, because we will come back to the economic
ground table, right, but just park that an on tax reform,
supernovation tax three million dollars unrealized taxing, unrealized gains for example,
a good idea, bad idea.
Speaker 2 (06:26):
Are there other.
Speaker 1 (06:28):
Issues that the banks, the government, regulators should be thinking about.
Speaker 2 (06:34):
So the tax on superinnovation and that three million dollars
threshold unrealized gains. Eighty five thousand people out of our
twenty five million population are impacted by that. And look
at the language, the frustration, the emotion, the attention it's gathered.
(06:56):
And so therefore it makes my point well for me,
imagine if we start talking about other areas where more
than eighty five thousand people are impacted, it's just to
be too distracting unless we have an agreed program and
effort around fundamental top to bottom tax reform. In relation
(07:18):
to that tax, one can understand that the government is
trying to find new sources of revenue. And if I
think about the original premise for Superinnuation in Australia was
we need to help Australians paye Australians working save for
their retirement so that because we cannot afford the pension
(07:41):
that they should have and are a title to. And
this was decided in the late eighties and early nineteen nineties,
and so Superinnuation was set up to help pay earners
build a nest egg so that they did not become
a burden on the public person when they retired. It
was not set up for people who have more than
(08:03):
ten million dollars in a self managed super fund to
provide them with an incremental tax advantage investment program. And
so therefore, while I think we should ask questions around
unrealized gains, and while I think we should ask questions
around potentially indexing that three million dollar level, the fact
(08:24):
is is that you can understand why they're looking at
it because the original program and commitment for superannuation was
to help paye tax and pay is safe for their
future retirement, not to inspire an aggregation of investment capital
because of certain tax advantage.
Speaker 1 (08:45):
Okay, we won't go any more on time. We will actually,
I mean, because bracket creep is one of your You
don't support bracket creep, but you do not support.
Speaker 2 (08:57):
We think that the impact of bracket creep is one
which should be addressed by having an indexation of two
point five percent per year. We think the way that
would work will complement the monetary policy setting of the
time at that time. And so therefore, indexing two point
(09:20):
five percent per year each year is a rigor that
brings certainty and consistency that everyone can rely upon and
in a way protects against an increase in the average
amount of tax that people pay as we go forward,
(09:41):
because what happens is when people think and fuel and
it's observable that we're paying too much income TAXI proportion
of income as an average. People talk about tax cuts,
and we do have tax cuts, but they're done in
an ad hoc somewhat politicized way, and we would say, well,
(10:02):
is that really the right way to do it. So
the way we think about it is that that bracket creep,
that bracket indexation each year is just a rigor that works,
and there's also budget neutral when you think about it.
Speaker 1 (10:16):
So that's part of your submission to the Economic Roundtable
that's on nine twenty first of August. Another idea that
you've had, which I think is really fascinating is having
a target of a million people in regional Australia by
twenty thirty thereabouts. And I read your submission and I
read the FIN review today and the FIN Review didn't
(10:36):
quite say what your submission said. So I'm not sure
which is right and which is wrong. But the FIN
suggested that hope for subsisions. I'm sure your submission's right,
but the FIN may have extra information perhaps, but the
idea of actually using some sort of incentive to get
people to the regions.
Speaker 2 (10:49):
Yeah. Look, we think that regional Australia is one of
the great unlocks or opportunities that we can and should
be pursuing. A third of Australia's GDP sits in regional Australia,
so it's a big contributor. The way we were thinking
and championing it is that it has a role to
(11:11):
play in solving a number of other challenges. So, for example,
if you think about house prices and house prices in
city median is well north of million dollars, house prices
median house prices in regional Australias approximately six hundred thousand dollars.
And so therefore, if I think about people who have
(11:34):
a median household income in Australia's about one hundred thousand dollars,
the mortgage is five to six times your income. Subject
to expense verification. The houses that suit median income household
levels in Australia is five hundred to six hundred and
fifty thousand dollars. So going into region and putting more
people into region is part of the way that we
(11:54):
might start to solve the household problem, the house ownership issue.
The other is the country is very focused on populating
Northern Australia and having a lot more activity in Northern
Australia for various geopolitical and defense reasons. And so again
it feels like that's consistent with the national agenda is
to go after improving regional Australia, in particular Northern Australia,
(12:16):
and so we feel like it has a role to
play in solving a number of challenges that are in
front of us. And as I say, the idea is
to get more people into those regional centers, and I
think the way we do that is there has to
be something incentives. I think it should be the case
that a nurse, a teacher who's willing to go to
(12:37):
a remote regional town should get some reward for taking
on that challenge and then helping us grow and graduate
our community to the next level.
Speaker 1 (12:46):
So I'm about to throw it to the floor, but
I do want to ask about Donald Trump and Tariff's
and operating in that type of environment, and not so
much about Donald Trump per se and feel free. But
it's more the uncertainty factor.
Speaker 2 (13:01):
Certainly it's a remarkable environment that we operate in at
the moment. But again from where I said, I feel
like we should be reflecting on this is a chance
for us. So the uncertainty and the volatility that we
currently are seeing and feeling because of what's going on
in the United States stands in stark contrast to the
(13:24):
re elected government, our consistency and continuity of leadership in Australia.
And so are we thinking about how we all of
a sudden represent the place that you should bring your
capital and you should bring your talent too, And so
are we thinking about how actually this is our comparative advantage,
which is good, efficient, effective regulation, and we should be
(13:46):
attracting capital and talent to this country to help us
grow and grow with all those ambitions that we've laid out.
I do also think though, with the and we've seen
this pattern now. I think we saw it in twenty
sixteen to twenty twenty and we're seeing it now, is
that there's always this announcement, there's always this headline. I
think it's important that we don't react to it and
(14:08):
wait until all those other things that take place, which
is proper engagement at the right levels of government the
right levels between two countries, and inevitably, something more rational
and if you will, more manageable seems to be coming out.
So our instinct, our recommendation, and how we think about
(14:29):
it is don't react to the headline, but trust that actually,
in almost all instances you've seen some commercial, sensible outcome.
And we should also be very honest with ourselves. Is
that the US is the lowest tariff imposing country, or
one of the lowest in the world, and has been
for a long time. It has, if you will, driven
(14:52):
global growth and inspire development in many other countries around
the world. And so therefore for them to stand back
now and say, well, how come I import everything from
you and I can't export anything to you. How come
that's sustainable? It's not sustainable. And so we need to
just take a step back, leave aside your thoughts on politics,
(15:14):
and just recognize that country is allowed to say, actually
it's slightly asymmetrical, and i'd like to see a little
bit more equivalence. And so that's part of what's driving
what's going on. And so if you think about it
and stay rational, you can see, actually there is a
way through this because a more equal, more balanced arrangement
between the United States and other countries is something that
we should welcome. We just got to get there. I'd
(15:36):
rather do it in a different way, but we just
got to get there.
Speaker 1 (15:39):
But you're still having an effective tariff rate of let's
say ten percent, ten to twelve percent. That's worse than
an effective tax rate of two to five percent.
Speaker 2 (15:50):
That's right. I mean, yes, the math doesn't lie equally.
A ten percent tariff rate and is train a dollar.
We can let that go down three, six, seven percent,
and so all of a sudden, the net impact is
a two to three percent impact on your margin here.
And the challenge then for you is to go and
find that two to three percent in terms of your
(16:11):
margin and your production. So I think it's just too
easy to say, oh, whoe me ten percent. There are
many other things that we can and we'll be able
to do to ameliorate that. Clearly, if it's fifty percent
or seventy five percent, that's a completely different paradigm because
that's not trying to equivalent, that's not trying to find
(16:32):
more balance. That's actually saying I do not want to
do business with you. And as I understand, it. They
want to do business with everyone, So it's just a
question then of working out what is the right balance
between the two countries or the two entities, as the
case may be.
Speaker 1 (16:49):
We're going to pause there and take a quick break
back in a moment. This is Fearing Greed one on
one with Westpac CEO Anthony Miller. So do we have
microphones in the room? Does anyone have a question? It's
(17:12):
one of the back there right next to you there.
Speaker 3 (17:15):
Thank you, Anthony Sanchiaguto from HPF Health. Really good to hear,
very candid and straight shooting answers. My questions to you
is about AI really heartwarming to see how you are
approaching it pragmatically, not just what the opportunities but challenges
as well and sending that signal to the market by
appointing someone. But in terms of leadership shadow, what are
(17:37):
you doing personally in your everyday life to use AI.
Speaker 2 (17:40):
So I've got a couple of my favorite models which
I use and I've started and do and just trying
to find Michelle. My chip staff is terrific operator. We
are using it more and more in terms of reviewing
and assessing and preparing reports. What I've also found and
quite invigorating is looking at all of the case studies
(18:06):
of what others are doing about it, and what's consistent
in terms of those successful outcomes or utilization of AI
was people having the courage to go for something very
bold and putting down we're just going to move to
that point. We're going to have it all done by AI.
(18:26):
We're not going to just use it a little bit.
We're going to use it one hundred percent. And so
what we are need and what we're thinking we need
to do is actually make sure that we set that
environment up that we provide our leaders and our employees
who are using the tool, provide them with an environment
(18:46):
and provide them with a permission to go for it
and to experiment, and provided they don't put the bank
at risk, which we know they cannot because of what
we've put in place. See what we can achieve. And
as I say, I'm trying to be much bolder and
what I'm doing it for. I have noticed that I've
got a director on my board here today, and I
(19:09):
didn't want to tip off that I was actually hoping
to write my next board report using AI. But what
I'll do is I'll submit a board paper in the
next period of time and no one will know and
we'll see see how everyone reacts after the board meeting.
So that's just Markie over here.
Speaker 1 (19:29):
So Scott Farquhar from Atlastian's giving a speech at the
National Press Club today and I read it this morning
and he said every CEO should use AI in their
personal life if they want to use it in their business.
And it's kind of like the Ripper of Modock. Why
was he good at newspapers because he read them every morning.
It's kind of his theory is the same, which is interesting.
Speaker 2 (19:49):
So I have two apps that I constantly on a
sort of in some respects I wander now way even
have a Google search engine. You know, the two applications
I have just helped solve so much in such a
thoughtful and helpful way. It's just quite powerful.
Speaker 4 (20:08):
Thank you, good afternoon. Our favorite topic is always AI
and real estate, and I'm a bias agent. I have
a question for you. How is Westpac Leave ranging AI
or data analytics to better understand property market or buyer
behavior and how do you see that evolving over the
(20:30):
next few years.
Speaker 2 (20:32):
We great question. I think we've been long term invested
in the idea of data data analytics and importantly trying
to make sure that as we engage with our customers
what they're doing and the things they're doing, that we
can see patterns, and we can see patterns which men
(20:56):
say to us, you know what, this customer is probably
interested in buying a property. We should make sure they're
aware of our interest in supporting them in that endeavor. Equally,
what we're using that particular insight and analytic capability is
this customer looks like it may want to transfer money
(21:16):
from Westpac to this fund or this other destination, and
we're deeply concerned about the integrity and merits of that
end destination, and so we're using it to protect our customers.
And where for example we've been pleased with what we've
(21:37):
seen from how the AI tool helps our bank is
in our scams and fraud area, where customers call in
and our call center operator is dealing with someone who's
very upset or very anxious that they may have been
scammed or that they've lost their money, and it's a
(21:59):
highly emotional, noisy, very intense call. Our call center operator
has an AI tool who is helping them understand if
the person's use that word that could mean this, So
therefore ask this question. And what that tool is doing
is making sure our call center operator gets to the
(22:21):
right place with the customer faster and more consistently than
it has in the past, and that has meant that's
given us a great deal of satisfaction. And importantly, what
we've been able to do is scams continue to grow,
and that's a battle we must win. More people are
calling in worried about scams. We haven't had to increase
(22:44):
the number of call center employees because the power of
this AI tool is meant we can solve more safely
and consistently without adding people. So therefore there's some real
value that we're seeing today in that way.
Speaker 5 (23:00):
Hi, lads, and you're here from the airfar. Thank you
for a great discussion so far. Ryan Stokes today raised
concerns about a sharp rise in claims for mental wellbeing.
Do you share his concerns and do you back his
call for a national legislation which would essentially state that
no compensation should be payable to an employee if their
(23:22):
injury was caused because of reasonable management.
Speaker 2 (23:27):
I certainly think Ryan very articulately and thoughtfully set out
one of the biggest challenges that we are all facing,
which is the mental health wellbeing challenge inside the workplace
and outside the workplace. I certainly acknowledge that some of
(23:49):
what Ryan is suggested makes a lot of sense. Have
you said that? I just don't think it's as simple
as that. As well, it is the case that I
think things like are we getting the balance of work
from home work in the office are we getting and
are we working enough in investing in our managers and
(24:12):
leaders so that they are far more effective in how
they manage and lead their teams and thus help employees
who are if you will, challenged to them, if confronted,
may react in a way that means you know, they
feel unsafe or that they invoke some protection such as
mental health, etc. So I feel like what we should
(24:36):
be talking about is what are all the things we
need to be doing and investing in in the workplace
to try and minimize this, And then, of course, once
you've done all you can to minimize it, then you
can start to look at some other actions which Ryan
is promoting, which I think are very thoughtful and definitely
(24:56):
have a role, But I think is work to be
done before you start to invoke those kind of responses.
Speaker 6 (25:02):
Thanks Anthonyarell Hoopo on the board of the Ethics Center.
One brief question and a related session question to build
on Endeiros. Are you seeing more of your son now
than when you when you first moved back during the pandemic.
Speaker 2 (25:18):
I was wondering about that in your new job. So yes,
we had it, saw a lot of each other in
that first year and then he moved to Brisbane and
so but he's moved to Brisbane and he spends a
lot of time with my mum and dad. So that's
created a reinforced connection across the family which is very
too lovely. Thanks the A.
Speaker 6 (25:38):
It's in relation to the productivity debate the act you
raised a report recently outlining the contribution of improving management
and leadership and the leadership culture in Australia could contribute.
To my mind, it was a bit quickly dismissed by
the Business Council, giving us quite a track called of
(26:00):
research that shows in Australia we think we're better managers
and leaders than we actually are. And I'm wondering from
your business and the businesses that you see into what's
the capacity you could see that we could get an
uplift from improving that training, education and the overall culture
for leadership.
Speaker 2 (26:19):
Thanks, thank you for the question, and it's a great one.
One of the five priorities for the company that we've
set and the teams one hundred percent behind, is employee
and so we have a goal, our aspiration is to
make Westpact the number one employee proposition in this market,
(26:39):
and we have a long way to go. We do
a lot of really good things. There's a lot of
things I want to do, but there's a lot of
things that I have to graduate the financial performance of
the company to be able to support my ambition and
our ambition for making it the number one place, because
I don't think I can be the number one bank
unless I have the number oneployee proposition and I have
(27:01):
the best people giving me their best every single day.
What we are focused on now, which is something we
can do now, is to work on our leaders, our
managers and making them better leaders and better managers. It
has been the case in the past that you are
a domain expert, you get promoted and thus you are
(27:24):
the manager. But you may be a demain expert, but
not a very good manager, and we have never really
given it the weight it should be given. And I
say that not just as it plays to Westpact, but
to all of Australia. And so the thing we should
also instead is that, you know, American companies, multinational companies
(27:46):
do invest a lot more in their executive development, their
manager's development, how they become not just the leader of
the domain, but if you will, the chaperone the custody,
and how they help people, help they coach people. And
that is something that we're going after and we want
to improve on. And so I think the ACT has
(28:07):
a point to make, which is that we should be
investing in management capability leadership capability just as much as
we're investing in anything else. And sort of around out
the AI topic. The way I keep thinking about it
is for every dollar I'm going into AI, I've got
to be investing in my people, and I've got to
be investing in the managers and leaders of my people
(28:29):
if we're going to realize the full potential of that tool.
Thanks Anthony for your time.
Speaker 7 (28:35):
Ria Berwood, I just wanted to ask you, and I'm
curious about your perspective having been international and in Australian banking.
Can you draw any learning or have you got any
observations with what's happening with the cash flow and the
business performance in Australia right now due to economic and
mic market dynamics comparing that to what's been happening with
(28:59):
the agribusiness in Australia and cash flow constraints due to
long term climate issues.
Speaker 2 (29:06):
No. No, the challenges that we see and I reflect
here the numbers that we have and we do as
a quarterly snapshot that helps us understand the cash flow
and the cash flow position of small, medium and large
commercial enterprises. You know, the pressure points that are impacting
(29:28):
them are cost of labor, energy costs, cost of servicing
and meeting regulatory challenges that are in front of them,
and then also the cost of getting materials and the like.
And so that is the fundamental drivers of challenges that
(29:50):
we see in small businesses and commercial enterprises. In a
few areas. You might argue that some of the climate
challenge is impacting on businesses and you might say that actually,
could we and should we have cheaper power today which
(30:12):
would help a lot of businesses. And it's because of
an incongruent, inconsistent approach to power generation, power storage and
transmission investment, that we're not quite where we want to
be as a country. That could be one connection that
we could establish there, but other than that.
Speaker 1 (30:32):
No, that's the second half of my interview with Westpac
CEO Anthony Miller. Anthony was proudly hosted by the Trans
Tasman Business Circle. The thirty three years, the Circle has
been the region's leading stakeholder engagement platform, connecting senior leaders
across business, government and community in Australia, New Zealand, Singapore
(30:55):
and beyond. With over two hundred and fifty high impact
engagements annually, the Circle strategic Conversations strengthens public private collaboration
and deepens cross border partnerships. Privately owned and proudly independent,
the Circle is powered by a team of senior professionals
dedicated to delivering meaningful, high trust experiences. I hope you've
enjoyed the conversation. Today, remember to hit follow on the
(31:16):
podcast and subscribe to Fear and Greed's free daily newsletter
at fearangreed dot com. Today you I'm Schanaoma and this
is Fear and Greed one on one
Welcome to Fear and Greed. One on one. I'm Sean Alma.
Every week I sit with a business leader and find
out everything I can about their world. Last week I
shared the first half of my interview with Westpac CEO
Anthony Miller. Today we dive into the second half of
the conversation, which was recorded in front of a live
audience hosted by the Trans Tasman Business Circle. Okay, you
(00:29):
mentioned your submission to the Economic roundtable that's coming up
next month. The very first point Westpac may was on housing.
Tell me how do we solve the housing crisis?
Speaker 2 (00:43):
First of all is a very hard question. I think
a couple of things. One is there's a tremendous amount
of alignment right across community, government or layers of government, regulators, business, union,
et cetera. That we've got to solve this and it
cannot be and we cannot be the number one country
in the world if we don't solve this challenge. Everyone
(01:06):
in Australia should feel and have the ability to say,
if I can, I will be able to buy a property.
You know that we give them that hope and at
the moment, the worry is that that is not something
that we're delivering on. So I think it's great that
everyone's aligned around it. What we need to do is
just really go after those approval processes. Many of the
(01:31):
initiatives and many of the ideas that have been promoted
around housing over the course of the last five plus
years have really focused a lot more on the demand side,
and what we really need to do is to focus
a lot more on the supply side and getting more
houses at the right price point into the marketplace. And
(01:51):
so approval processes in many ways are too slow, too inconsistent.
There's other things we reckon. Meant you could, for example,
remove the upfront costs that's imposed upon the developer and
the builder and back end those costs so that they're working.
Capital train for the developer is something that is solved
(02:13):
when the project is completed, as opposed to challenged and
imposed upon them day one. And so what we think
is the priorities, how do we build more houses, more
properties at the right price point and thus start to
solve the supply challenge for Australia.
Speaker 1 (02:31):
But does a big bank have a role in that?
And your building example, I recently did a building and
there were eight payments which I withdrew from my bank
and gave to my builder. After the builder I put
the money up front and then they got paid in
eight payments. So there is an approval regulatory issue, But
there's also a role for the banks too, isn't it.
Speaker 2 (02:52):
I think that's right. I think also particularly for the developer,
if the large amount of up front costs and approval
costs that they have to pay is back ended when
the project's completed, the working capital drain on them is reduced.
That means they therefore don't need to seek as many
(03:14):
early stage payments from you the owner the developer, and
so therefore it reduces the demand upon them. And then
of course as a bank, we can and would be
able to contribute to helping them solve any other working
capital needs that they might have. But the very fact
that the cash drain on the company is not realizable
(03:36):
until the project is completed safely just means it's a
much more attractive and a much safer proposition for any lender.
And so therefore that's how we would and it does
complement what we promote.
Speaker 1 (03:50):
Okay, housing fixed tax reform next one JST start there.
It's a very very difficult political player doing anything to
the GST, and no political party since how I'd introduced
it has really been able to do anything broad in it,
increase it. What's your take on tax reform and should
(04:13):
the GST be included. I'm not going to ask you
directly whether you think it should be higher or broader,
but if we're going to have a tax reform debate,
do we need to talk about the GST as part
of that.
Speaker 2 (04:24):
Well, I think, first of all, tax reform just catalyzes
so much emotion and so much engagement right across the community,
and so when we thought about our submission to the
Productivity round Table, I just thought it's sort of going
to somewhat distract and dilute the focus on things that
(04:46):
can be implemented and can be done now to start
talking about substantive and significant tax reform. And so therefore
our submission was very much focused on a very readily implementable,
often discussed and therefore could be quite quickly implemented bracket
(05:06):
creep measure. All of the other areas that you want
to deal with from a tax reform perspective, whether it
be GST broadening it, What do you do in terms
of taxing, investment versus income. All of those things have
so many knock on effects for the economy that we
(05:27):
just think that that will just create too much distraction
and not be a realistically implementable set of reforms. And
therefore don't let it crowd out what you can achieve
by sitting around the table at that round table working
on all these other things that are very much implementable
that will improve productivity and help Australia growth. So I'd
(05:49):
like to see tax reform, definitely want to see a
debate around what we might do, but I would pull
it a little bit away from the productivity table because
it's so complicated, it is so emotional, it is so hard,
and it has a risk of diluting and distracting everyone
who are there to do a really good job for Australia.
Speaker 1 (06:11):
I'm not going to let you off the hook on
that one, because we will come back to the economic
ground table, right, but just park that an on tax reform,
supernovation tax three million dollars unrealized taxing, unrealized gains for example,
a good idea, bad idea.
Speaker 2 (06:26):
Are there other.
Speaker 1 (06:28):
Issues that the banks, the government, regulators should be thinking about.
Speaker 2 (06:34):
So the tax on superinnovation and that three million dollars
threshold unrealized gains. Eighty five thousand people out of our
twenty five million population are impacted by that. And look
at the language, the frustration, the emotion, the attention it's gathered.
(06:56):
And so therefore it makes my point well for me,
imagine if we start talking about other areas where more
than eighty five thousand people are impacted, it's just to
be too distracting unless we have an agreed program and
effort around fundamental top to bottom tax reform. In relation
(07:18):
to that tax, one can understand that the government is
trying to find new sources of revenue. And if I
think about the original premise for Superinnuation in Australia was
we need to help Australians paye Australians working save for
their retirement so that because we cannot afford the pension
(07:41):
that they should have and are a title to. And
this was decided in the late eighties and early nineteen nineties,
and so Superinnuation was set up to help pay earners
build a nest egg so that they did not become
a burden on the public person when they retired. It
was not set up for people who have more than
(08:03):
ten million dollars in a self managed super fund to
provide them with an incremental tax advantage investment program. And
so therefore, while I think we should ask questions around
unrealized gains, and while I think we should ask questions
around potentially indexing that three million dollar level, the fact
(08:24):
is is that you can understand why they're looking at
it because the original program and commitment for superannuation was
to help paye tax and pay is safe for their
future retirement, not to inspire an aggregation of investment capital
because of certain tax advantage.
Speaker 1 (08:45):
Okay, we won't go any more on time. We will actually,
I mean, because bracket creep is one of your You
don't support bracket creep, but you do not support.
Speaker 2 (08:57):
We think that the impact of bracket creep is one
which should be addressed by having an indexation of two
point five percent per year. We think the way that
would work will complement the monetary policy setting of the
time at that time. And so therefore, indexing two point
(09:20):
five percent per year each year is a rigor that
brings certainty and consistency that everyone can rely upon and
in a way protects against an increase in the average
amount of tax that people pay as we go forward,
(09:41):
because what happens is when people think and fuel and
it's observable that we're paying too much income TAXI proportion
of income as an average. People talk about tax cuts,
and we do have tax cuts, but they're done in
an ad hoc somewhat politicized way, and we would say, well,
(10:02):
is that really the right way to do it. So
the way we think about it is that that bracket creep,
that bracket indexation each year is just a rigor that works,
and there's also budget neutral when you think about it.
Speaker 1 (10:16):
So that's part of your submission to the Economic Roundtable
that's on nine twenty first of August. Another idea that
you've had, which I think is really fascinating is having
a target of a million people in regional Australia by
twenty thirty thereabouts. And I read your submission and I
read the FIN review today and the FIN Review didn't
(10:36):
quite say what your submission said. So I'm not sure
which is right and which is wrong. But the FIN
suggested that hope for subsisions. I'm sure your submission's right,
but the FIN may have extra information perhaps, but the
idea of actually using some sort of incentive to get
people to the regions.
Speaker 2 (10:49):
Yeah. Look, we think that regional Australia is one of
the great unlocks or opportunities that we can and should
be pursuing. A third of Australia's GDP sits in regional Australia,
so it's a big contributor. The way we were thinking
and championing it is that it has a role to
(11:11):
play in solving a number of other challenges. So, for example,
if you think about house prices and house prices in
city median is well north of million dollars, house prices
median house prices in regional Australias approximately six hundred thousand dollars.
And so therefore, if I think about people who have
(11:34):
a median household income in Australia's about one hundred thousand dollars,
the mortgage is five to six times your income. Subject
to expense verification. The houses that suit median income household
levels in Australia is five hundred to six hundred and
fifty thousand dollars. So going into region and putting more
people into region is part of the way that we
(11:54):
might start to solve the household problem, the house ownership issue.
The other is the country is very focused on populating
Northern Australia and having a lot more activity in Northern
Australia for various geopolitical and defense reasons. And so again
it feels like that's consistent with the national agenda is
to go after improving regional Australia, in particular Northern Australia,
(12:16):
and so we feel like it has a role to
play in solving a number of challenges that are in
front of us. And as I say, the idea is
to get more people into those regional centers, and I
think the way we do that is there has to
be something incentives. I think it should be the case
that a nurse, a teacher who's willing to go to
(12:37):
a remote regional town should get some reward for taking
on that challenge and then helping us grow and graduate
our community to the next level.
Speaker 1 (12:46):
So I'm about to throw it to the floor, but
I do want to ask about Donald Trump and Tariff's
and operating in that type of environment, and not so
much about Donald Trump per se and feel free. But
it's more the uncertainty factor.
Speaker 2 (13:01):
Certainly it's a remarkable environment that we operate in at
the moment. But again from where I said, I feel
like we should be reflecting on this is a chance
for us. So the uncertainty and the volatility that we
currently are seeing and feeling because of what's going on
in the United States stands in stark contrast to the
(13:24):
re elected government, our consistency and continuity of leadership in Australia.
And so are we thinking about how we all of
a sudden represent the place that you should bring your
capital and you should bring your talent too, And so
are we thinking about how actually this is our comparative advantage,
which is good, efficient, effective regulation, and we should be
(13:46):
attracting capital and talent to this country to help us
grow and grow with all those ambitions that we've laid out.
I do also think though, with the and we've seen
this pattern now. I think we saw it in twenty
sixteen to twenty twenty and we're seeing it now, is
that there's always this announcement, there's always this headline. I
think it's important that we don't react to it and
(14:08):
wait until all those other things that take place, which
is proper engagement at the right levels of government the
right levels between two countries, and inevitably, something more rational
and if you will, more manageable seems to be coming out.
So our instinct, our recommendation, and how we think about
(14:29):
it is don't react to the headline, but trust that actually,
in almost all instances you've seen some commercial, sensible outcome.
And we should also be very honest with ourselves. Is
that the US is the lowest tariff imposing country, or
one of the lowest in the world, and has been
for a long time. It has, if you will, driven
(14:52):
global growth and inspire development in many other countries around
the world. And so therefore for them to stand back
now and say, well, how come I import everything from
you and I can't export anything to you. How come
that's sustainable? It's not sustainable. And so we need to
just take a step back, leave aside your thoughts on politics,
(15:14):
and just recognize that country is allowed to say, actually
it's slightly asymmetrical, and i'd like to see a little
bit more equivalence. And so that's part of what's driving
what's going on. And so if you think about it
and stay rational, you can see, actually there is a
way through this because a more equal, more balanced arrangement
between the United States and other countries is something that
we should welcome. We just got to get there. I'd
(15:36):
rather do it in a different way, but we just
got to get there.
Speaker 1 (15:39):
But you're still having an effective tariff rate of let's
say ten percent, ten to twelve percent. That's worse than
an effective tax rate of two to five percent.
Speaker 2 (15:50):
That's right. I mean, yes, the math doesn't lie equally.
A ten percent tariff rate and is train a dollar.
We can let that go down three, six, seven percent,
and so all of a sudden, the net impact is
a two to three percent impact on your margin here.
And the challenge then for you is to go and
find that two to three percent in terms of your
(16:11):
margin and your production. So I think it's just too
easy to say, oh, whoe me ten percent. There are
many other things that we can and we'll be able
to do to ameliorate that. Clearly, if it's fifty percent
or seventy five percent, that's a completely different paradigm because
that's not trying to equivalent, that's not trying to find
(16:32):
more balance. That's actually saying I do not want to
do business with you. And as I understand, it. They
want to do business with everyone, So it's just a
question then of working out what is the right balance
between the two countries or the two entities, as the
case may be.
Speaker 1 (16:49):
We're going to pause there and take a quick break
back in a moment. This is Fearing Greed one on
one with Westpac CEO Anthony Miller. So do we have
microphones in the room? Does anyone have a question? It's
(17:12):
one of the back there right next to you there.
Speaker 3 (17:15):
Thank you, Anthony Sanchiaguto from HPF Health. Really good to hear,
very candid and straight shooting answers. My questions to you
is about AI really heartwarming to see how you are
approaching it pragmatically, not just what the opportunities but challenges
as well and sending that signal to the market by
appointing someone. But in terms of leadership shadow, what are
(17:37):
you doing personally in your everyday life to use AI.
Speaker 2 (17:40):
So I've got a couple of my favorite models which
I use and I've started and do and just trying
to find Michelle. My chip staff is terrific operator. We
are using it more and more in terms of reviewing
and assessing and preparing reports. What I've also found and
quite invigorating is looking at all of the case studies
(18:06):
of what others are doing about it, and what's consistent
in terms of those successful outcomes or utilization of AI
was people having the courage to go for something very
bold and putting down we're just going to move to
that point. We're going to have it all done by AI.
(18:26):
We're not going to just use it a little bit.
We're going to use it one hundred percent. And so
what we are need and what we're thinking we need
to do is actually make sure that we set that
environment up that we provide our leaders and our employees
who are using the tool, provide them with an environment
(18:46):
and provide them with a permission to go for it
and to experiment, and provided they don't put the bank
at risk, which we know they cannot because of what
we've put in place. See what we can achieve. And
as I say, I'm trying to be much bolder and
what I'm doing it for. I have noticed that I've
got a director on my board here today, and I
(19:09):
didn't want to tip off that I was actually hoping
to write my next board report using AI. But what
I'll do is I'll submit a board paper in the
next period of time and no one will know and
we'll see see how everyone reacts after the board meeting.
So that's just Markie over here.
Speaker 1 (19:29):
So Scott Farquhar from Atlastian's giving a speech at the
National Press Club today and I read it this morning
and he said every CEO should use AI in their
personal life if they want to use it in their business.
And it's kind of like the Ripper of Modock. Why
was he good at newspapers because he read them every morning.
It's kind of his theory is the same, which is interesting.
Speaker 2 (19:49):
So I have two apps that I constantly on a
sort of in some respects I wander now way even
have a Google search engine. You know, the two applications
I have just helped solve so much in such a
thoughtful and helpful way. It's just quite powerful.
Speaker 4 (20:08):
Thank you, good afternoon. Our favorite topic is always AI
and real estate, and I'm a bias agent. I have
a question for you. How is Westpac Leave ranging AI
or data analytics to better understand property market or buyer
behavior and how do you see that evolving over the
(20:30):
next few years.
Speaker 2 (20:32):
We great question. I think we've been long term invested
in the idea of data data analytics and importantly trying
to make sure that as we engage with our customers
what they're doing and the things they're doing, that we
can see patterns, and we can see patterns which men
(20:56):
say to us, you know what, this customer is probably
interested in buying a property. We should make sure they're
aware of our interest in supporting them in that endeavor. Equally,
what we're using that particular insight and analytic capability is
this customer looks like it may want to transfer money
(21:16):
from Westpac to this fund or this other destination, and
we're deeply concerned about the integrity and merits of that
end destination, and so we're using it to protect our customers.
And where for example we've been pleased with what we've
(21:37):
seen from how the AI tool helps our bank is
in our scams and fraud area, where customers call in
and our call center operator is dealing with someone who's
very upset or very anxious that they may have been
scammed or that they've lost their money, and it's a
(21:59):
highly emotional, noisy, very intense call. Our call center operator
has an AI tool who is helping them understand if
the person's use that word that could mean this, So
therefore ask this question. And what that tool is doing
is making sure our call center operator gets to the
(22:21):
right place with the customer faster and more consistently than
it has in the past, and that has meant that's
given us a great deal of satisfaction. And importantly, what
we've been able to do is scams continue to grow,
and that's a battle we must win. More people are
calling in worried about scams. We haven't had to increase
(22:44):
the number of call center employees because the power of
this AI tool is meant we can solve more safely
and consistently without adding people. So therefore there's some real
value that we're seeing today in that way.
Speaker 5 (23:00):
Hi, lads, and you're here from the airfar. Thank you
for a great discussion so far. Ryan Stokes today raised
concerns about a sharp rise in claims for mental wellbeing.
Do you share his concerns and do you back his
call for a national legislation which would essentially state that
no compensation should be payable to an employee if their
(23:22):
injury was caused because of reasonable management.
Speaker 2 (23:27):
I certainly think Ryan very articulately and thoughtfully set out
one of the biggest challenges that we are all facing,
which is the mental health wellbeing challenge inside the workplace
and outside the workplace. I certainly acknowledge that some of
(23:49):
what Ryan is suggested makes a lot of sense. Have
you said that? I just don't think it's as simple
as that. As well, it is the case that I
think things like are we getting the balance of work
from home work in the office are we getting and
are we working enough in investing in our managers and
(24:12):
leaders so that they are far more effective in how
they manage and lead their teams and thus help employees
who are if you will, challenged to them, if confronted,
may react in a way that means you know, they
feel unsafe or that they invoke some protection such as
mental health, etc. So I feel like what we should
(24:36):
be talking about is what are all the things we
need to be doing and investing in in the workplace
to try and minimize this, And then, of course, once
you've done all you can to minimize it, then you
can start to look at some other actions which Ryan
is promoting, which I think are very thoughtful and definitely
(24:56):
have a role, But I think is work to be
done before you start to invoke those kind of responses.
Speaker 6 (25:02):
Thanks Anthonyarell Hoopo on the board of the Ethics Center.
One brief question and a related session question to build
on Endeiros. Are you seeing more of your son now
than when you when you first moved back during the pandemic.
Speaker 2 (25:18):
I was wondering about that in your new job. So yes,
we had it, saw a lot of each other in
that first year and then he moved to Brisbane and
so but he's moved to Brisbane and he spends a
lot of time with my mum and dad. So that's
created a reinforced connection across the family which is very
too lovely. Thanks the A.
Speaker 6 (25:38):
It's in relation to the productivity debate the act you
raised a report recently outlining the contribution of improving management
and leadership and the leadership culture in Australia could contribute.
To my mind, it was a bit quickly dismissed by
the Business Council, giving us quite a track called of
(26:00):
research that shows in Australia we think we're better managers
and leaders than we actually are. And I'm wondering from
your business and the businesses that you see into what's
the capacity you could see that we could get an
uplift from improving that training, education and the overall culture
for leadership.
Speaker 2 (26:19):
Thanks, thank you for the question, and it's a great one.
One of the five priorities for the company that we've
set and the teams one hundred percent behind, is employee
and so we have a goal, our aspiration is to
make Westpact the number one employee proposition in this market,
(26:39):
and we have a long way to go. We do
a lot of really good things. There's a lot of
things I want to do, but there's a lot of
things that I have to graduate the financial performance of
the company to be able to support my ambition and
our ambition for making it the number one place, because
I don't think I can be the number one bank
unless I have the number oneployee proposition and I have
(27:01):
the best people giving me their best every single day.
What we are focused on now, which is something we
can do now, is to work on our leaders, our
managers and making them better leaders and better managers. It
has been the case in the past that you are
a domain expert, you get promoted and thus you are
(27:24):
the manager. But you may be a demain expert, but
not a very good manager, and we have never really
given it the weight it should be given. And I
say that not just as it plays to Westpact, but
to all of Australia. And so the thing we should
also instead is that, you know, American companies, multinational companies
(27:46):
do invest a lot more in their executive development, their
manager's development, how they become not just the leader of
the domain, but if you will, the chaperone the custody,
and how they help people, help they coach people. And
that is something that we're going after and we want
to improve on. And so I think the ACT has
(28:07):
a point to make, which is that we should be
investing in management capability leadership capability just as much as
we're investing in anything else. And sort of around out
the AI topic. The way I keep thinking about it
is for every dollar I'm going into AI, I've got
to be investing in my people, and I've got to
be investing in the managers and leaders of my people
(28:29):
if we're going to realize the full potential of that tool.
Thanks Anthony for your time.
Speaker 7 (28:35):
Ria Berwood, I just wanted to ask you, and I'm
curious about your perspective having been international and in Australian banking.
Can you draw any learning or have you got any
observations with what's happening with the cash flow and the
business performance in Australia right now due to economic and
mic market dynamics comparing that to what's been happening with
(28:59):
the agribusiness in Australia and cash flow constraints due to
long term climate issues.
Speaker 2 (29:06):
No. No, the challenges that we see and I reflect
here the numbers that we have and we do as
a quarterly snapshot that helps us understand the cash flow
and the cash flow position of small, medium and large
commercial enterprises. You know, the pressure points that are impacting
(29:28):
them are cost of labor, energy costs, cost of servicing
and meeting regulatory challenges that are in front of them,
and then also the cost of getting materials and the like.
And so that is the fundamental drivers of challenges that
(29:50):
we see in small businesses and commercial enterprises. In a
few areas. You might argue that some of the climate
challenge is impacting on businesses and you might say that actually,
could we and should we have cheaper power today which
(30:12):
would help a lot of businesses. And it's because of
an incongruent, inconsistent approach to power generation, power storage and
transmission investment, that we're not quite where we want to
be as a country. That could be one connection that
we could establish there, but other than that.
Speaker 1 (30:32):
No, that's the second half of my interview with Westpac
CEO Anthony Miller. Anthony was proudly hosted by the Trans
Tasman Business Circle. The thirty three years, the Circle has
been the region's leading stakeholder engagement platform, connecting senior leaders
across business, government and community in Australia, New Zealand, Singapore
(30:55):
and beyond. With over two hundred and fifty high impact
engagements annually, the Circle strategic Conversations strengthens public private collaboration
and deepens cross border partnerships. Privately owned and proudly independent,
the Circle is powered by a team of senior professionals
dedicated to delivering meaningful, high trust experiences. I hope you've
enjoyed the conversation. Today, remember to hit follow on the
(31:16):
podcast and subscribe to Fear and Greed's free daily newsletter
at fearangreed dot com. Today you I'm Schanaoma and this
is Fear and Greed one on one
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