Media Release | RBA Governor’s speech points the way

The need to effectively deal with the health and economic impact of COVID as we learn to live with it and the recovery from the crisis as a collective responsibility of all governments are the most important messages that the Federal and State and Territory Governments should heed in yesterday’s speech by Reserve Bank of Australia governor Philip Lowe.

“Governor Lowe’s speech underscores the urgency needed for the Federal Government and the states and territories to work together to minimise the short term and longer term impacts of the virus on the economy,“ said ACCI CEO James Pearson.

“The RBA Governor’s comments yesterday highlight why all Governments need to ensure we have the necessary testing, contact tracing and quarantine approaches that are targeted, proportionate to the health risk and uniformly applied across Australia. Businesses and households need certainty about what restrictions to expect and what will trigger them. Governments have an obligation to households and businesses to limit as much as possible the disruption and harm to the Australian economy caused by COVID.

“Until we have a widely available vaccine, the strength of the economic recovery will depend on our ability to successfully prevent outbreaks of COVID undermining the confidence of households to spend and businesses to invest and employ people.

“Given the uneven impact of the virus on households and businesses across the economy, it is important that Federal and state and territory governments continue to provide fiscal support where it is most required. Without this support the economic recovery will take longer and the scarring of the economy will be deeper.

“As highlighted by the RBA Governor, economic reform must continue to be a priority on the national agenda. For Australia to achieve sustainable economic growth that raises living standards, we need comprehensive policy reform to restructure the economy, so it has the dynamism, resilience and competitiveness to deliver it.

“Opportunities for reform that involve both tiers of government are plentiful. The National Cabinet has already prioritised skills. But there are other reforms that need to be tackled sooner rather than later. We need a simplified tax and transfer system that is efficient and fair, rewards effort and risk-taking and improves our national competitiveness. We need regulations and regulatory systems that are simple and outcome-focused rather than complicated and prescriptive, to make it easier for people to establish businesses, operate effectively and grow. We also need infrastructure investment that is chosen and delivered to provide the maximum benefit to the economy and society more broadly.”

“It is time for the Commonwealth and States and Territories to come together to seriously tackle structural economic reform.”