‘We will fall behind’: The RBA governor just warned political intransigence threatens to hold the country back

RBA governor Phil Lowe Photo: Peter Parks /AFP/ Getty Images / File.

RBA governor Phillip Lowe delivered a short speech at an event in Canberra this morning where he expressed optimism about the global outlook and the broad positive contribution that technology is poised to deliver in terms of living standards.

He was less sanguine, however, about getting anything done in terms of economic reform in Australia. Here’s a short excerpt (emphasis added):

As things currently stand, it looks likely that average growth in per capita incomes over the next quarter of a century will be lower than over the past quarter of a century. We should, though, be capable of stronger growth than we have seen over the past few years. But we can’t take this for granted. It is important that we have a sharp focus on the reforms that can make a real difference to our living standards. If we don’t do this, we will fall behind. The positive news is that there is no shortage of good ideas here. The not-so-positive news is that there is a shortage of good ideas that can successfully navigate the political process.

That a failure to deliver economic reform might cause some problems is no surprise. But for Lowe to use a short speech to land the point in Canberra underlines the chasm between the need for changes and the ability of politicians to deliver it any time soon.

Last week in Canberra government MPs discussed the future of Coalition energy policy at length. Accounts of the meeting reveal something of a shambles, with one notable incident involving former prime minister repeatedly interjecting while MP Craig Laundy spoke, with Abbott eventually telling him “go f**k yourself”.

This is the process for a policy framework that is intended to manage Australia’s power needs, keep the lights on, and ensure we don’t have a blow-out in energy costs for households and businesses.

And that’s before it gets anywhere near a reform proposal that needs to navigate the Senate.

Lowe’s full speech is here.