Bullock Warns Businesses Must Step Up to Boost Productivity

Reserve Bank governor Michele Bullock has expressed concern over the sluggishness of Australian businesses and bureaucracy, saying they are hindering the nation's productivity. Speaking at a Committee for Economic Development of Australia event in Sydney on Tuesday, Bullock stated that managing inflation had become more difficult due to recent economic shocks.

The Ukraine war and conflict in the Middle East have contributed to elevated fuel prices, which Bullock warned were 'materialising' as an inflationary risk. Bond futures traded on financial markets have priced in an 88% chance of a 0.25% interest rate hike next week.

Bullock emphasized the need for productivity growth, stating that it must increase strongly. The Intergenerational Report assumes long-term labour productivity growth of 1.2%, but Bullock considers this figure unrealistic given past decade's lower productivity growth.