Give us back our confidence!
I just returned from an inspiring presentation on artificial intelligence (AI) by Alan Finkel AO, Australia’s Chief Scientist from 2016 to 2020, only to read that the Reserve Bank of Australia’s (RBA) 2,200 staff had rejected a 9.5 per cent pay rise, over three years. The proposal included a 3.5 per cent increase in the first year, followed by a 3.0 per cent increase in each of the next two years.
Together with the Head Office renovation, now expected to cost $1.2 billion, this seems like a “joke”, particularly when we consider that total RBA staff numbers have increased by around 800, or 57 per cent, over the past five years. And this doesn’t include the RBA’s fiscal 2025/26 accounting loss of A$8.5 billion on the unrealized value of its government bond and foreign exchange portfolio.
And a brief analysis of the Federal Government’s situation seems dire given the total number of employees has increased over the past five years by 60,000, or 38 per cent, from 156,000 to 216,000. Coincidentally, the Federal Government expenditure to Gross Domestic Product (GDP) ratio of 27 per cent, well above the long-term average, has placed upward pressure on Australia’s inflation rate.
Inflation destroys purchasing power, and the damage compounds over time. What proportion of the Australian working population has experienced serious real wage growth (after inflation), when cumulatively the Consumer Price Index (CPI) has increased by 23.9 per cent over the five years to June 2026?
Should we accept permanently higher prices while governments of all colours continue spending, often on poorly conceived projects, as though debt and deficits have no cost?
Bringing inflation down towards two per cent is admirable, but it does not fix the enormous cost of living crisis Australians are experiencing.
It’s little wonder Australia’s real (after inflation) per capita (per person) GDP has declined in several quarters over recent years, whilst our productivity growth has been close to zero for many years.
The first thing Chalmers & Co need to do is use AI constructively to help eliminate duplication, reduce regulation, and maintain front-line services, while taking the total number of Commonwealth Government employees back to the levels recorded in 2021. Give relevant ministers key performance indicators (KPIs) and please don’t employ any consultants. It’s called responsibility, accountability and austerity!
The second thing Chalmers & Co need to do is have a laser focus on boosting Australia’s productivity. Get the price of energy down, improve infrastructure, cease all lazy and mindless regulation and taxes, and introduce policies (and sharpen legislation) which encourage small and medium sized businesses to grow. Give Australians confidence!
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 40 years of industry experience.
David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
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“2,200 staff had rejected a 9.5 per cent pay rise, over three years”.
Don’t give them anything then, they are clearly unappreciative, pampered and spoiled; there are people out there who would jump at this.
Make them learn that “50% of something is better than 100% of nothing” and especially when 3.5% – 3.0% is VERY generous, particularly as a function of what I would imagine would be very high salaries ($150-200k+).
Like the Bureau of Meteorology (1,900 staff), the botched $96m website rollout, the damning forensic report on poor practice, and the fact that countries like China and Indonesia are now using AI to forecast future rainfall, changes are coming. And poor accountability and oversight will likely speed up the changes.