Dr. Philip Lowe’s final appeal after being ousted from the top post at the G20 in India
Lowy urged Australia to boost productivity after applying to serve as RBA governor until September 17 at its final G20 meeting in India.
In a world gripped by inflation, the Reserve Bank of India (RBA) governor used his time at the final G20 meeting in India to plead for more to be done to boost productivity.
Mr. Lowe’s application was announced that he would not be reappointed to his post, but that Deputy Governor Michelle Bullock would take his place in mid-September.
His term ends after he was widely criticized for the RBA’s drive to raise cash rates over the past 12 months amid sky-high inflation, particularly when Mr Low said interest rates would remain at record lows until at least 2024.
Philip Lowe addressed the G20 for the last time as Governor of the Reserve Bank of Australia.
Still serving as governor until September 17, Mr Low urged the world’s economic experts to consider the ‘major challenge’ of low productivity growth amid an inflationary crisis.
‘[Low productivity] Less sustainable growth in real wages means limited growth in output,’ he said.
‘It means a slower expansion of the public services we want for our society and it means an increased tension in the distribution of income.
‘So low productivity growth means economic and social problems.’
Mr Low said there was hope for productivity but that ‘good ideas’ for improvement would have to make their way through the political system.
‘If we don’t, we condemn our citizens to slower growth in real wages, smaller public services and increased tensions in the income distribution,’ he said.
Joining Mr Low at the G20 meeting of finance ministers and central bank governors was Treasurer Jim Chalmers.
Joining Mr Low at the G20 meeting of finance ministers and central bank governors was Treasurer Jim Chalmers, who he also saw as a productivity problem.
‘We also have to recognize that now is not the time to take our focus away from the defining challenge, which is still inflation, but now is the time to think about what kind of economy we want to build as we come out of the doldrums and the next 12 months or so. Weakness in GDP growth over time,’ he said.
‘That means we need to increasingly focus our concerted efforts on how we make our economy more productive, and that goes to some of the things we need to talk about at this meeting: the energy transition, how we adapt and adapt. Technology, and how we can get the human capital part right.’