Transcript
Michele Bullock, Governor (2023 – Present)
Our job here at the Reserve Bank is to serve the community. The Parliament of Australia has given the
Reserve Bank some very important responsibilities. It is our duty to promote the economic prosperity and
welfare of the people of Australia, both now and into the future. We do this in many ways, including by
setting monetary policy to maintain price stability and full employment, by contributing to the
efficiency and stability of the payments system and the stability of the financial system, and by banking
the Australian Government and providing the nation’s banknotes.
Probably the thing we do that is most familiar to people is set the level of interest rates. This is known
as ‘monetary policy’, where we change interest rates to try to smooth fluctuations in the
economy. The interest rate we control is the cash rate, which is the rate that banks charge each other to
borrow overnight. Now this interest rate influences other interest rates in the economy, such as those
charged on your loans, or those you earn on your savings. Changes in interest rates influence
people’s decisions to buy things or invest money, and they affect the exchange rate and the value of
any assets that people might hold, such as homes or shares. All this affects economic activity. In
deciding where to set the cash rate, we want to keep inflation low and stable, averaging
2-3 per cent – our inflation ‘target’, if you like. But we want to do it in a
way that keeps the level of employment as high as possible. These outcomes are essential for a prosperous
economy.
But there are many other things that we are responsible for as well.
The Reserve Bank’s also responsible for the stability of the financial system. We typically think of
a stable financial system as one that is safe and helps money flow within the economy, even when there
are disruptive events. We contribute to financial stability in a number of ways. One important way is by
setting monetary policy that helps keep inflation low and stable and people fully employed. We also
collaborate with other financial regulators – Australian Prudential Regulation Authority,
Australian Securities and Investment Commission and the Australian Treasury – through the Council
of Financial Regulators to identify risks in the financial system and to develop plans to address them if
they arise. In extreme situations, we can also provide lending to financial institutions that are sound
but experiencing difficulties with liquidity.
Now we also make and distribute Australia’s banknotes. We have some of the highest quality and most
secure banknotes in the world and they use technology that we in Australia invented, the Bank invented it with the CSIRO in the 1980s –
polymer, or if you like, plastic banknotes. We have a purpose-built banknote printing facility and vault
in the outer suburbs of Melbourne. It might surprise many people that despite the use of electronic
payments increasing, there is still a lot of demand for banknotes, particularly as a store of value.
We also operate the payment system that is at the centre of the movement of money in Australia. When money
goes from one bank to another, say when you pay a bill to somebody who banks with a different bank, the
money comes through the Reserve Bank. We are also constantly looking at innovations to provide
Australians with the most efficient and secure ways to pay. For example, we worked with the banks to
develop the New Payments Platform, which allows people to make payments in close to real time,
24 hours a day, 7 days a week. And we are looking at how the nature of money and the payments
system could evolve as technology changes.
We are the banker for the Australian Government. So, when you get a Medicare refund, pay your tax or
receive a refund, those transactions occur through the government’s bank accounts here at the
Reserve Bank. It’s the same if you’ve ever needed a disaster relief or other support payment,
perhaps during the COVID-19 pandemic, floods or bushfires. We know that many
people rely on these payments, and we feel privileged to partner with the government in getting these
vital payments to you quickly and reliably.
A lot of research, analysis, innovation and support is required to deliver all of these functions. We do
all this with a bit over 1,500 people. Most of us are located here in Sydney. But we have a banking
branch in Canberra and offices in Brisbane, Melbourne, Adelaide, Perth, Beijing, London and New York.
We’re the nation’s central bank and we take our responsibilities to the Australian people very
seriously.