# RBA governor says AI could be a bubble and isn’t yet boosting Australian productivity

Digest AI · Policy & Regulation · published 2026-09-22T08:54:50Z

Canonical: https://digestai.news/story/rba-governor-says-ai-could-be-a-bubble-and-isnt-yet-boosting-australia

## Summary

RBA governor Michele Bullock told a CEDA event in Sydney that AI could be a bubble and that there is no evidence it is making the economy more efficient, contrary to the Albanese government’s claims. She said the RBA and overseas counterparts view AI as a “great white hope” for productivity but have seen little sign of impact, noting rapid datacentre investment is adding to inflation. Bullock cited research from the RBA’s South Korean counterpart showing employees using AI produce the same output while working 1.5 hours less each week, and warned that productivity can even decline while firms figure out the technology.

The government’s intergenerational report projects per‑person economic activity to rise from $99,200 today to $157,300 by 2066, assuming a 1.2% annual productivity increase – a figure economists say is unlikely, with a 0.8% rate yielding only $136,600. Bullock also highlighted a housing downturn, with house prices down 3.1% over three months and home‑loan approvals slumping, especially for investors. Traders see more than a 90% chance of the cash rate rising from 4.35% to 4.6% at the next meeting.

## Key points

- RBA governor Michele Bullock said AI could be a bubble and shows no sign of boosting productivity yet.
- Intergenerational report projects per‑person activity $157,300 by 2066 at 1.2% productivity growth; economists deem 0.8% more realistic.
- House prices fell 3.1% in three months and home‑loan approvals slumped, with >90% chance rates rise to 4.6%.

## Why it matters

If AI fails to raise productivity, Australian growth forecasts and policy decisions on interest rates, immigration and housing could be based on overly optimistic assumptions.

## Sources

1. [AI could be a bubble and is not yet making Australia more productive, Michele Bullock says](https://theguardian.com/technology/2026/sep/22/ai-could-be-a-bubble-and-is-not-yet-making-australia-more-productive-michele-bullock-says) (The Guardian AI, 2026-09-22)

## Cite

Digest AI, "RBA governor says AI could be a bubble and isn’t yet boosting Australian productivity", 22 September 2026, https://digestai.news/story/rba-governor-says-ai-could-be-a-bubble-and-isnt-yet-boosting-australia

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