The Bank’s 2019 Consumer Payments Survey (CPS) suggests that the use of cash for transactions has continued to fall alongside growing use of electronic payment methods. Despite this, a substantial share of consumers still use cash intensively, with this share having reduced only a little over recent years. These high cash users are more likely to be older, have lower household income, live in regional areas, and/or have limited internet access. The survey suggests that around one-quarter of consumers would face major inconvenience or genuine hardship if they could no longer use cash, although most respondents stated that their current access to cash was convenient. The survey was conducted before the emergence of COVID-19 and the associated social distancing measures, however, and so did not capture any change in behaviour that may have resulted from this.

The Reserve Bank’s 23rd annual bank fees survey shows that, overall, banks’ income from fees declined in 2019. Fee income from households decreased, largely driven by lower fees from deposit accounts. A number of reforms related to merchant services contributed to banks’ fee income from businesses growing at a slower pace than in recent years.

There has been a stark decline in the size and diversity of the Year 12 Economics student population since the early 1990s. The Reserve Bank has commissioned a comprehensive survey of students to gain quantitative evidence of the factors contributing to this decline. The survey responses highlight that while economics in general is perceived to be important for society, many students lack an interest in, or understanding of, Economics as a subject. This finding is even more pronounced for students who are female, those from a lower socio-economic background and those from regional schools.

The large and immediate effect of the COVID-19 pandemic on economic activity has increased the need for more real-time indicators of the economy. This article discusses a new indicator of `news sentiment’, which uses a combination of text analysis, machine learning and newspaper articles. The news sentiment index complements other timely economic indicators and has the advantage of potentially being updated on a daily basis. The news sentiment index captures key macroeconomic events, such as economic downturns, and typically moves ahead of survey-based measures of sentiment. Related indicators, such as the news uncertainty index, similarly help to better understand real-time developments in the Australian economy.

The Spanish flu reached Australia in 1919 and remains the country’s most severe pandemic in terms of health outcomes. At the peak of the pandemic, sickness due to influenza temporarily incapacitated 2 per cent of the labour force. However, despite the social distancing measures used by governments to contain the virus, few job losses in this period were due to a lack of available work. The labour market also recovered quickly, but it is not clear how relevant this experience is for the modern economy.

The Reserve Bank of Australia (RBA) is the banker to the Commonwealth of Australia, supporting the Australian Government in its daily banking needs. During extraordinary times, such as the bushfires of the 2019/20 summer season or the current COVID-19 pandemic, demands on banking services are heightened as additional payments are made to Australians who require funds immediately. By modernising its products and service offerings and the underlying technology, the RBA has ensured payment and banking systems are fit to perform these tasks securely and reliably. In the past, additional payments during extraordinary times required additional effort and at times unconventional means. Today, government payments can be made seamlessly, even during crisis situations, ensuring funds are received without unnecessary delays.

Members commenced their discussion of the global economy by noting that many countries had seen a reduction in the number of new COVID-19 cases and had begun easing some restrictions on activity. The scale of the initial impact on economic activity in many of these economies had also become clearer in the available data. In contrast, a number of emerging market and low-income economies had yet to see a peak in the flow of new cases. Members observed that there continued to be material downside risks to the global outlook, especially if infection rates were to rise in countries where the epidemic had seemed to be under control, or if concerns about the virus or insufficient policy support were to constrain spending.

Measures of core inflation had eased in most advanced economies in April, and lower oil prices had also reduced headline inflation significantly. The effects on prices of the shortfall in global demand and the increase in spare capacity in labour markets...

The Chart Pack summarises macroeconomic and financial market trends in Australia and provides some information about developments for our main trading partners. The graphs in the Chart Pack are updated monthly. For more information about the source data for the Chart Pack graphs, see Data Availability. The Reserve Bank also publishes extensive statistical data on our website.

Browse the left-hand navigation to choose the graph subject category. You can then view or download the graphs individually.

Thank you to Morgan Stanley for the opportunity to speak this morning.

We are living through quite extraordinary times. The COVID-19 pandemic is having dramatic effects on economies around the world, impacting employment, businesses and households. Monetary and fiscal policies have been heavily mobilised to help bridge the impact of the containment measures on economic activity. But the health crisis has also disrupted aspects of the retail payments system; payment patterns have seen large, sudden shifts as merchants and consumers have changed both their payment preferences and their mode of interaction. Payment service providers have tried to accommodate these shifts in preferences in a fast-changing environment.

Today I want to address the potential implications of COVID-19 for the payments system. While we have until now been thinking about disruption to the payments system mostly in terms of the entry of new technologically enabled service...

Release date: 1 June 2020

Preliminary estimates for May indicate that the index increased by 1.8 per cent (on a monthly average basis) in SDR terms, after increasing by 2.4 per cent in April (revised). The rural, base metals and non-rural sub-indices all increased in the month. In Australian dollar terms, the index decreased by 1.7 per cent in May.

Over the past year, the index has decreased by 7.4 per cent in SDR terms, led by lower coal, iron ore, oil and alumina prices. The index has decreased by 2.5 per cent in Australian dollar terms.

Consistent with previous releases, preliminary estimates for iron ore, coking coal, thermal coal and LNG export prices are being used for the most recent months, based on market information. Using spot prices for the bulk commodities, the index increased by 2.8 per cent in May in SDR terms, to be 9.6 per cent lower over the past year.

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Good morning and thank you for the invitation to appear before this Committee.

The past three months have been extraordinary ones in the life of our nation and there has been an unprecedented policy response.

On the economic front, there has been very close coordination between monetary and fiscal policy, as there should be at times like this. As part of the RBA's contribution to dealing with the pandemic, we announced a comprehensive package in mid March. The goal is to support the economy by keeping funding costs low and credit available, especially to small and medium-sized businesses.

As banker to the Australian Government, the RBA has also processed the many billions of dollars in government assistance to households and businesses. We have also made sure that the payments system is working well and that banknote supply is maintained. And we have done this with around 90 per cent of our staff working from home.

The...

The output of an economy usually increases over time. However, growth in economic output fluctuates, forming a ‘business cycle’ in which there are peaks and troughs in economic activity. In the trough of a business cycle, output growth can be weak or negative. This usually results in job losses and an increase in the unemployment rate. While there is no single definition of recession, it is generally agreed that a recession occurs when there is a period of reduced output and a significant increase in the unemployment rate. Views differ about how to best identify this. Recessions inflict great hardship on households and businesses, and they can have long-lasting effects on both society and the economy. Consequently, central banks and other policymakers try to reduce the frequency and severity of recessions. Monetary policy is one of the main tools used to do this. (See Explainer: Economic Growth and Explainer: What is Monetary Policy?).

This Explainer describes the...

Michele Bullock (Assistant Governor, Financial System), Luci Ellis (Assistant Governor, Economic), Christopher Kent (Assistant Governor, Financial Markets)

Anthony Dickman (Secretary), Ellis Connolly (Deputy Secretary), Alexandra Heath (Head, Economic Analysis Department), Bradley Jones (Head, International Department), Jonathan Kearns (Head, Financial Stability Department), Marion Kohler (Head, Domestic Markets Department)