The Business Council of Australia says today’s decision by the Reserve Bank of Australia to increase the cash rate by 25 basis points to 4.60 per cent is another reminder of the urgent need for productivity reform and spending restraint.
Business Council Chief Executive Bran Black said today’s decision adds to the pressure households and businesses are already under.
Following today’s decision, Australia now has the second highest cash rate among advanced economies.
“This reinforces what the 2026 Intergenerational Report made clear: Australians are already paying the price for a decade of poor productivity growth,” Mr Black said.
“There is no doubt that international pressures are contributing to inflation, but key contributors are also domestic decisions taken, and not taken.”
“Lifting productivity is the only way to sustainably ease cost-of-living pressures, and returning Australian productivity growth to its historic average would leave Australians $14,000 a year better off by 2035.”
“Living within our means by controlling government spending and keeping taxes low is also critical.”
“Red tape costs Australia around $160 billion each and every year at the Commonwealth Government level alone, and that cost flows through to the price of goods and services across the country, and makes investment harder to stack up,” Mr Black said.
“Put simply, Australia is drowning in red tape and our living standards are paying the price.”
“That’s why the Business Council is calling for a target to cut red tape costs by 25 per cent, to help take the heat out of prices for Australian workers and businesses.”
“Turning productivity around requires a significant lift in business investment, which is down on historical levels as a share of GDP – and lower still once data centre investment is excluded. That’s unlikely to change unless we improve investment settings.”
“The EU and UK have set red tape reduction targets, and we should be doing the same.”
“We’ve done this before. Reforms in the 1980s and 1990s made Australia more productive and pay packets grew, but that won’t happen again without significant and ambitious reform starting now.”