‘The glass is half full’: Outgoing RBA governor positive about economic future despite mistakes

Australian Community Media

In his final speech, outgoing RBA governor Philip Lowe said there were mistakes made under his leadership but he’s optimistic about Australia’s economic future.

Transcript

00:00 The first lesson is that uncertainty is a fact of life,

00:04 and we all need to manage it.

00:06 None of us has a crystal ball,

00:08 and the unexpected happens, and we need to adjust.

00:12 The second lesson is that there's a lot to be grateful for,

00:16 that indeed the glass is half full.

00:20 I have had the great privilege of working with a group of very talented people at the RBA

00:24 who are strongly committed to serving the public interest.

00:28 I've had the great privilege of being the Governor of a widely respected central bank

00:32 in a country that enjoys one of the highest standards of living in the world.

00:38 The issue that has defined my term as Governor more than any other

00:42 is the forward guidance about interest rates that was provided during the pandemic.

00:48 That guidance was widely interpreted as a commitment,

00:51 rather than a conditional statement that interest rates would not increase until 2024.

00:58 As you know, interest rates started increasing in May 2022,

01:03 and there's been much criticism of me and of the Reserve Bank since then,

01:07 especially by those who borrowed during the pandemic based on our guidance.

01:12 Now, there's a lot to be learned from this experience,

01:15 including how to communicate in uncertain times.

01:20 But I ask that people keep in mind the circumstances that we faced in 2020.

01:26 It was a really scary time.

01:28 At the RBA, we wanted to build a bridge to better times

01:33 and to provide some insurance against the very worst outcomes.

01:37 And I know that the Government had a very similar mindset.

01:41 In the end, this approach worked.

01:44 The Australian economy avoided falling into the abyss,

01:47 and then it bounced back pretty well.

01:51 With the benefit of hindsight, my view is that we did do too much.

01:56 But hindsight's a wonderful thing.

01:59 None of us can predict the future,

02:01 and we had to make decisions under great uncertainty

02:04 and with incomplete information.

02:07 We got some things right, but we got other things wrong.

02:11 I can assure you, though, that the staff of the RBA

02:14 and the members of the RBA Board have been relentless

02:17 in their pursuit of doing the right thing

02:20 and supporting the economic prosperity of the people of Australia.

02:25 So I'll leave the RBA after 43 years proud of our contribution

02:29 to the stability of the Australian economy and our financial system.

02:33 [End]

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