Miller: Iran conflict complicates economic outlook, but customers prepared

Speaking at the AFR Banking Summit in Sydney on Monday, Westpac CEO Anthony Miller said ‘responsible’ AI adoption can lift productivity.

Westpac chief executive Anthony Miller says the Iran conflict has added to uncertainty in the economic outlook, as policymakers and markets debate how much further interest rates need to rise.

 

Speaking at the Australian Financial Review Banking Summit in Sydney on Monday, Miller said tensions in the Middle East are disrupting global energy supply chains and pushing up production costs, adding a fresh layer of uncertainty for interest rates, inflation and household budgets.

 

Describing the situation as “complicated”, Miller warned that disruptions to global energy supply chains could flow through to higher business costs and result in increased pressure on household budgets and a renewed squeeze on cost of living.

 

Even so, Miller said arrears and non-performing loans remained “as low as we have seen for a very long time”, calling it “remarkable how well people are navigating this environment”.

 

With markets pricing further rate rises, Miller said the policy debate should not stop at monetary or tax settings ahead of the May Federal Budget.

 

“I don’t think tax reform is the unlock that drives productivity in this country. Don’t get me wrong, I think we need to be looking at our tax system, but when you look at your tax reform program, you need to look at it holistically.”

 

“The issue will be … what should we be doing to improve the environment for consumers and small businesses,” he said, adding that the conversation ultimately “swings into productivity” and the need to “get more for what we’re doing to ensure we grow the pie”.

 

Miller said productivity had begun to “dominate the public discourse” but argued there was no single silver bullet. The bigger levers, he said, were competition, attracting capital and skilled workers, and lifting the spread of innovation across the economy - alongside an energy system that is reliable, cost-efficient and “emissions responsible”.

 

On AI, the Westpac CEO said Australia had “the most amazing opportunity of a lifetime … to transform and drive productivity in the workforce” but was not embracing it “with the courage and the conviction that we should”. 

 

“The problem for Australia is that we're afraid of change. We're not willing to embrace the change that we should. And so AI will ask us to change how we do things, but the outcome in the future world is, I think, quite positive”, Miller said.

 

At Westpac, Miller said the focus was on practical adoption, including training to give staff access to AI so they can “do more and develop skills”. The rollout, he said, was as much a leadership and workforce challenge as a technology one, requiring employees to test new approaches.

 

“It is a people challenge as much as it's this wonderful technology tool. And so our thinking and our approach has been very much aimed around, let's get this AI tool into the hands of every employee. It therefore requires leaders, it requires people who are curious, who want to try to find ways to improve how they work and use these tools”.

 

“So that's, in my mind, a cornerstone to what we've got to do”, Miller said.

Marina Karpathios (née Gainulina)

Marina Karpathios (née Gainulina) is a Content Strategy Manager and leads Westpac Wire, the editorial division of the bank. She holds over a decade of experience in marketing communications, a Bachelor of Communications & Media (Journalism) degree and a drive to connect with discerning audiences via authentic storytelling across mediums. She has managed brand comms for the likes of Tiffany & Co., Hugo Boss, NIVEA and GRAZIA.

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