Over the last month there were important developments in both Australia and New Zealand bearing on the future path of interest rates and also government spending.

CA ANZ also launched an important piece of work “The Accounting Profession in Australia” at Australian Parliament House. The report highlights the significant economic contribution of accounting, totalling three per cent of GDP, and how accounting is critical to financial reporting, taxation, and governance across the economy.

Supporting those functions in every sector of the economy is at the heart of rebooting Australia’s stalled productivity growth.

The Reserve Bank of Australia renews the inflation fight

The Reserve Bank raised official interest rates from 4.35 per cent to 4.60 per cent following its September meeting.

This decision was no surprise. In the preceding three weeks, the bank’s three most senior figures, Michele Bullock, Andrew Hauser, and Sarah Hunter, had signalled continuing concern about inflation, helping to prepare financial markets for the possibility of a September rate hike.

After reversing the three 2025 rate cuts earlier this year, the RBA has now tightened monetary policy to above where it was in December 2024. During the intervening 21 months core inflation has averaged 3.4 per cent compared to the 2.5 per cent target.

Interest rates are the only tool available to the RBA to deal with inflation and Australia’s cost-of-living crisis. Bond markets expect two more rate rises in the coming several months. The first of these could be as early as Melbourne Cup Day.

New Zealand GDP growth

Stats NZ reported in mid-September that GDP growth for the second quarter of 2026 was 0.2 per cent. That compared to market expectations of between 0.1 and 0.2 per cent. The Reserve Bank of New Zealand had previously suggested that quarter-on-quarter growth would likely be “around zero.” The latest official figures implied that the New Zealand economy grew by 1.7 per cent over the last year.

The sluggish growth figures reflect ongoing international pressures stemming principally from conflict in the Middle East and elevated liquid fuel prices. New Zealand imports essentially all its refined fuel. With crude oil prices rising to new highs recently and with the US Federal Reserve raising interest rates and hence putting downward pressure on the NZD/USD exchange rate, fuel costs will remain elevated in the third quarter of 2026.

This puts the RBNZ in a somewhat tricky position: needing to raise interest rates to get inflation under control but also mindful of low economic growth.

The Accounting Profession in Australia

Independent research from Oxford Economics Australia, commissioned by CA ANZ details the direct economic contribution of the accounting profession and, perhaps even more importantly, looks at the broader contribution across all sectors of the economy.

In terms of direct economic impact, the report found that the gross value add of the accounting sector was $26.5 billion last year, while an additional $55.9 billion came from in-house accounting services.

The report also highlighted that “Accountants supply financial reporting, assurance, tax, compliance, budgeting and strategic decision-making capability to the Australian economy. These are skills which investors, lenders, regulators, boards and businesses rely on to function. As a result, the capacity of this workforce flows through to the quality of investment decisions, governance and public revenue across the economy.”

These capabilities are at the heart of improved productivity growth in Australia. The recently released Intergenerational Report assumes productivity growth of 1.2 per cent, a significant uplift on the flat growth of the last decade. Improving productivity will require stronger business investment and more efficient, less burdensome regulation. Accounting functions play a crucial role in both of these areas.

The report also maps important actions to strengthen the profession and address a shortfall of 17,900 professionals by 2035. These include:

• strengthening the domestic talent pipeline;
• maintaining access to global talent;
• building future-ready skills and capabilities;
• supporting workforce participation; and
• improving cross-sector collaboration and workforce planning.