RBA Board Member Questions AI as Solution to Productivity Crisis

A new member of the Reserve Bank of Australia's (RBA) monetary policy board has expressed disagreement with Governor Michele Bullock over the benefits of artificial intelligence.

Melinda Cilento, Labor's appointee to the nine-member board, stated that AI investment alone would be insufficient to boost productivity. Instead, she emphasized the importance of leadership, an empowered and adaptable workforce, and a willingness to change in order to capture new opportunities.

Cilento also criticized Treasury's Intergenerational Report for relying heavily on AI to improve long-term productivity growth. The report suggests that long-term productivity growth could be boosted to 1.2% after five years of average annual growth of minus 0.5%. Cilento argued that real gains will come from what organizations do with the tools, not just the investment itself.

The disagreement comes as household spending is flat in August, following rate hikes and fuel excise relief. Economists predict that household consumption growth will ease to 1.7% in 2026, down from 2.5% in 2025.