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.
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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]