Bullock Blasts Sluggish Businesses for Hindering Australia's Productivity

Reserve Bank of Australia Governor Michele Bullock has expressed concerns about Australian businesses' lack of dynamism and productivity growth over the past decade. Speaking at a Committee for Economic Development of Australia event, Bullock called on corporate leaders to 'step up to the plate' and contribute more to lifting the nation's productivity.

Bullock pointed out that managing inflation had become more difficult due to recent economic shocks, including tariff hikes, the Ukraine war, and conflict in the Middle East. She warned that inflationary risks were materializing, particularly from elevated fuel prices sparked by the Middle East conflict.

The Reserve Bank Governor emphasized the need for productivity growth to improve, citing the Intergenerational Report's assumption of 1.2% annual long-term labour productivity growth as a 'call to action.' Bullock suggested reducing red tape, rewarding innovation, and making it easier for businesses to invest could help boost productivity.

However, she emphasized that business must also play a crucial role in improving productivity, stating that Australian businesses have become less dynamic over the past decade. Bullock cited promoting greater competition as one way to 'spur on' productivity improvement and noted that artificial intelligence was touted as a potential solution, but there were few signs it had yet had an impact.