Macquarie CEO Shemara Wikramanayake: Get set for a mid-year interest rate cut

Shemara Wikramanayake expects the RBA to ease rates toward the middle of next year, easing pressure on household budgets and supporting the housing market.

Shemara Wikramanayake, Macquarie Group CEO Shemara Wikramanayake. Picture: Britta Campion / The Australian

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?

We are optimistic the Australian economy is turning the corner. Cost-of-living pressures for households are starting to ease as a result of tax cuts and lower inflation, which has begun to encourage a lift in consumer spending. We expect the RBA to ease monetary policy toward the middle of next year, which should help further ease the pressure on household budgets and provide some support to housing market activity.

In our own business, inflation is one of a range of factors that can impact our outlook in the short-term, but there are strong tailwinds for structural growth across sectors such as energy and digitisation and we are well positioned for growth over the medium term.

Outlook

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

Our teams on the ground drive investment decisions based on unmet needs in the communities they serve. We’re continuing to invest in our Australian digital banking portfolio, in data centres and energy transition, in promising technology businesses and across the commodities spectrum. We’re excited to see what opportunities our people in Australia and around the world can discover and act on this year.

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.

Given the ever-increasing calls on public funding for our ageing population, it will be important to focus policy levers on ways to catalyse private capital to help governments meet looming societal need around themes like the energy transition. Over the long run, productivity is the key driver of living standards and the Productivity Commission has made many recommendations over the years regarding ways to ensure a focus on both equity and efficiency when setting policy. It is notable that business investment as a share of GDP has fallen to low levels and if that were to continue, it would have a material impact on labour productivity and the level of the capital stock.

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?

There are uncertainties regarding the specifics of the policy initiatives that President Trump’s administration will make however, we operate in many markets globally and are well-used to, and well-prepared for, the changes that arise through the democratic process. We engage extensively across the political spectrum, offering perspectives to all sides on the sectors in which we have global expertise. These sectors are generally areas of long-term structural need that are less likely to be impacted by economic or political cycles.

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 have always worked flexibly at Macquarie and we see this model continuing to work for us for the long-term. The opening of our new global headquarters at 1 Elizabeth Street this year has brought all of our Sydney-based staff together within the one campus and it has been excellent to see our staff connect and collaborate in the office with a broader range of teams. We continue to see the office as being an important place for our staff to do this, while also recognising the benefits of a flexible approach.

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?

We have implemented several AI technologies already and our businesses are continuing to test different options that work for their needs. At the organisational level, we have rolled out Macquarie AI Chat, a generative AI tool, to all of our staff globally, which is now being used by over 6000 people a week. It assists staff with a range of tasks aimed at uplifting their productivity and creating more capacity as we continue to develop innovative solutions for clients – ranging from those using our leading retail digital banking services to the largest institutions.