Dark forces driving discontent<\/a><\/p>\nThe unwritten agreement between workers and the democratic state is fraying, and the cost of inequality is beginning to manifest itself.<\/p>\n
The bank’s net interest margins or, very loosely speaking, the margin between the interest rate they pay depositors and the rates they charge borrowers, is also coming under pressure as interest rates rise.<\/p>\n
Meanwhile, their combined profit after tax was $15.2 billion, down by 2.1 per cent compared to the first half.<\/p>\n
Enter the lure of outsourcing roles offshore and rolling out artificial intelligence (AI), and you have several vehicles at management’s disposal to cut costs in the face of weakening revenue.<\/p>\n
There were no specific references to any of this in the NAB’s public statements today, though.<\/p>\n
“We are particularly focused on reducing the size of corporate functions,” Andrew Irvine said.<\/p>\n
“There will be no material impact to customer-facing banking roles.<\/p>\n
“We have also deliberately made deeper changes to senior management positions which will broaden leadership responsibilities across the bank,” he said.<\/p>\n
Nimbler? Yes. How will this be achieved? That’s harder to say.<\/p>\n
LoadingBiting the hand that feeds you<\/p>\n
Section 181 of the Corporations Act 2001 requires directors to “exercise their powers and discharge their duties: in good faith in the best interests of the corporation; and for a proper purpose”.<\/p>\n
The final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was submitted by Commissioner Kenneth Hayne who noted, “self-interest will almost always trump duty”.<\/p>\n
This was a reference to chasing profits for a company ahead of the best interests of the client.<\/p>\n
For banks, at the very top levels, it’s a painfully simple maths problem: grow revenue and cut costs.<\/p>\n
It boosts the banks’ bottom lines, which grows shareholder value and, in turn, lines the pockets of executives.<\/p>\n
But is that too short sighted?<\/p>\n
Those who have been let go from ANZ Bank and those about to be let go from NAB are facing a deteriorating jobs market, and rising interest rates.<\/p>\n
If CBA and Westpac follow suit, it could be a real problem for the economy.<\/p>\n
Because it’s not just the banks letting go of workers.<\/p>\n
![\"Michele](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1792484893_853_04c023423c387d3270f0f8a664cae507.jpeg\")
<\/p>\n
Reserve Bank Governor Michele Bullock says an unemployment rate between 4.5 and 5 per cent “will probably take enough heat out of the labour market that it’ll ease pressure on inflation”. (AAP: Sarah Wilson)<\/p>\n
Mining giant BHP last week confirmed job cuts at its iron ore operations in Western Australia.<\/p>\n
And Microsoft announced it would cut 4,800 jobs, or about 2.1 per cent of its global workforce, in July.<\/p>\n
The Reserve Bank wants to reduce “aggregate demand” in the economy to help lower inflation.<\/p>\n
Governor Michele Bullock said it might take an unemployment rate of 5 per cent to achieve that.<\/p>\n
You can see now, though, why Bullock could “possibly” see a recession in sight, given how many companies may choose to become “more agile” as times get tougher.<\/p>\n
The negative feedback loop in the economy is plain to see: more job losses feed more job losses.<\/p>\n
What is less clear is how much further interest rates can rise before that feedback loop is turbo-charged \u2014 though some in finance have a view on it.<\/p>\n
ABC business editor Michael Janda asked panellists at the Citi Investment Conference in Sydney today how much further the RBA could raise interest rates before bigger cracks appeared in the mortgage market, with rising arrears and forced sales.<\/p>\n
Why housing’s the great Australian talking point<\/a><\/p>\nWhy are Australians obsessed with property? Because we have to be. And there are big reasons why it’s always on our minds.<\/p>\n
“I don’t think it’s a lot more,” said James Boyle, the chief executive of major non-bank lender Liberty Financial Group.<\/p>\n
“There’s an increase in hardship \u2026 borrowers are doing it tough with rates at the current levels.”<\/p>\n
He added: “The stress is there if you go looking for it.”<\/p>\n
David Bailey, chief executive of large mortgage broking group AFG, agreed, saying inflation and falling real wages had eroded many borrowers’ financial buffers.<\/p>\n
“The cost of living has increased at the same time \u2026 that causes real cracks to start to appear,” he warned.<\/p>\n
“An extra 25 [basis points] is really starting to push the envelope.”<\/p>\n
Former NAB chief economist Alan Oster said, all else being equal, Australia would hit an unemployment rate of 4.8 per cent by early next year.<\/p>\n
If the RBA hikes interest rates again, he said, it will move higher to 5 per cent. He characterised that as a recession.<\/p>\n
With gross federal government debt of roughly $1 trillion, business confidence in the doldrums and weak productivity, the economy is in a particularly vulnerable position to handle a corporate Australia race to the bottom in cutting costs.<\/p>\n
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![\"Andrew](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/8b96ea632bf26fed72cb7ee94febef28.jpeg\")
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