Deloitte Australia CEO Adam Powick: Economy limping into New Year

Adam Powick says the Australian economy may weaken further, while interest rate cuts are overdue but need supportive government settings.

Deloitte Australia chief executive Adam Powick

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

The Australian economy is limping into the new year and may weaken further still. High inflation and interest rates have really seen households and business pull back on spending and investment, with migration the only thing keeping the economy’s head above water, but that’s forecast to fall in the coming months. Meanwhile, economic weakness in China is impacting the strength of our resources sector, which underpins much of our growth. In this environment we are overdue an interest rate reduction to stimulate business and consumer confidence but need government policy and spending settings to support this outcome.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

We are approaching the new year with measured optimism and a clear intent to continue to invest in high priority domains and the future of our business. Despite the unevenness and uncertainty in the Australian economy at the moment, we are buoyed by the innovation and entrepreneurship we are seeing in small to mid private market, and the push of our major public and private sector clients towards technology modernisation underpinned by cloud applications and infrastructure. The rapid emergence of AI as a transformative productivity improvement tool, and the growing pipeline of major physical infrastructure programs driven by energy transition also provide significant opportunities for Australian business.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

There are several levers we should be pulling as our national competitiveness and productivity is genuinely challenged at the moment. The biggest issue we consistently hear from our client base is the significant and growing impost of federal and state government regulation which is stifling business investment and innovation. We need a robust review of how we simplify, declutter, and better co-ordinate our business regulatory frameworks and ensure we have appropriate business leadership voices at the table when new regulations are designed and implemented. The other major lever that is well overdue for addressing is wholesale reform of our tax system to fund budget repair and incentivise private investment, encourage intergenerational equity, and eliminate charges that distort the housing market.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

All major clients we speak with are closely monitoring the complex and dynamic geopolitical environment in the world today, including the potential implications of leadership changes in the US. We proactively run scenarios within our business to identify both potential opportunities and challenges associated with growing geopolitical complexity and are increasingly working with clients to help them navigate this uncertainty and volatility. Key areas of focus include access to talent, economic and wage inflation, data and cyber security, energy transition, technology disruption, and supply chain resiliency.

People

Has your organisation’s approach to flexible working – including working from home – evolved during the year. Is this likely to change further into 2025?

We are committed to flexible and hybrid work as we understand how important this is to attract and retain a talented and motivated workforce. We aim to empower our people to choose where they work based on their client, team, and individual needs. As part of our approach, we recognise the essential value of in-person connections for building relationships, learning from one another, and fostering innovation. Therefore, we actively encourage our people to make the most of in-person interactions, whether at client premises, our own offices, or other locations. We do not anticipate this approach changing in 2025 but will continue to learn and adapt to get the right balance between workforce experience, productivity, and engagement.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?

Generative AI is the most important business productivity technology I have seen in my career, and this year we have doubled down on rolling out sophisticated, secure AI tools to over 12,000 people across Deloitte. We now have almost half our workforce using our MyAssist GenAI platform on a regular basis to drive personal productivity, but we are also seeing the benefits it brings by providing high quality insights for clients faster than through traditional ways of working. In addition to creating our own GenAI enabled platforms, we are continuing to work closely with major technology partners to pilot and adopt their GenAI solutions where this makes sense for our clients and people. We are starting to realise the full benefits of GenAI at scale, which will only be enhanced by the use of AI agents and intend to keep investing in 2025 to accelerate our journey to becoming a truly AI enabled organisation.