Reserve Bank governor Phillip Lowe has urged Australia's labour government to preserve the ability of employers to hire and fire workers flexibly. His comments come at a time when the Australian government is attempting to implement widespread workplace reforms.

In a speech at the Annual Dinner for the Committee for the Economic Development of Australia, Lowe said, "as a country, we need to do what we can to make sure that the supply side of our own economy is flexible". He went on to say that "In a world of more frequent supply shocks, we will be better off if there is flexibility in our labour and product markets so that we can respond quickly and effectively".

Within the proposed workplace reforms is the Secure Jobs Better Pay bill, which will expand the options for multi-employer bargaining while maintaining flexibility for separate employer pay deals with their workforce. Unions have supported the bill. However, business organisations have claimed that the bill would increase the regulatory burden. Andrew McKellar, chief executive of the Australian Chamber of Commerce, told the Australian that "The last thing small business owners need right now is to be dragged into expensive, protracted and arduous multi-employer bargaining agreements that will do nothing to increase wages, nothing to make jobs more secure, and nothing to make businesses more resilient in the facing of growing uncertainty."

Lowe's speech also warned that global trends were likely to "complicate the task" of fighting inflation and added that "the Reserve Bank board is resolute in its determination to return inflation to target". The cash rate has risen from 0.1% in April to 2.85% in November. Lowe stated that moving forward, "we will be paying close attention to developments in the global economy, the evolution of household spending and wage and price-setting behaviour".