It’s lucky inflation is falling. Most of us don’t even understand what the Reserve Bank does

July 29, 2026 — 6:53pm

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To paraphrase astronaut Jim Lovell … Martin Place, we have a problem.

Martin Place, Sydney is, of course, the home of the Reserve Bank. And the problem the bank has is that new survey work it commissioned has found most Australians have little idea what the Reserve does, what its key aims are and whether it can actually do what people want.

Early last year, the RBA began a new survey to get a grasp of how Australians “experience and understand the economy”, and their views of the bank. Across three separate surveys, more than 9000 people have been quizzed.

To say the results were mixed is an understatement. And they should be a huge warning to the bank that without an increase in understanding and support from the public, the RBA’s social licence will be eroded.

People were asked the impact of higher interest rates on various parts of the economy.

Just over half of those quizzed correctly agreed that higher interest rates would slow economic activity. That’s exactly why the RBA lifts interest rates.

Yet a third of people believed higher rates would increase economic activity, while about 18 per cent were unsure.

The bank noted that the “public generally understands how interest rates affect economic activity”. But if 48 per cent aren’t sure or think higher rates boost activity, that seems a long way short of a “general understanding”.

From there, the answers get........

© The Sydney Morning Herald