Hauser says trust lowers the cost of restoring price stability
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said public trust makes monetary policy more effective and disinflation less costly. At the Sir Leslie Melville Lecture in Canberra, he warned that confidence in inflation delivery has weakened.
Stable trust masks weaker confidence
Around 55 percent of respondents reported high or moderately high trust in the RBA's Community Research Survey, broadly stable over 18 months.
Four waves covered 12,000 Australians from February 2025, most recently in September 2026.
Confidence in near-term delivery fell, while transparency scores improved and values remained relatively strong.
Hauser said trusted policy reduces price and wage responses to cost shocks, allowing the same disinflation with smaller rate increases and less lost output.
Long-term market and economist expectations remain anchored to Australia's 2–3 percent target.
However, firms in Macquarie University's Business Outlook Scenarios Survey have become less certain the target will be achieved over the next 5–10 years.
Explain the strategy, not rates
Hauser distinguished explaining the RBA's reaction function from promising a future rate path.
The bank is expanding scenario analysis through its MARTIN, DINGO and HALLIE models, developing a financial markets research hub and improving data partnerships.
Its liaison network holds around 900 meetings annually.
Targeted household and business communications combine detailed publications with shorter explanations.
New five-year reviews will strengthen accountability alongside parliamentary scrutiny.
Trust offers no exemption
Hauser's warning was that stable headline trust is no licence to disappoint on inflation.
He said accumulated price increases help explain public anger even as inflation falls.
Better explanations cannot substitute for outcomes, and independence must not put the RBA beyond challenge.
Source: Trust, Expectations and Monetary Policy
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