The economic outlook for 2027 is stark. Ordinary workers will wear the costs

A boss earning more than a million dollars a year urging staff to accept a pay cut.

A street of power poles that cost $3 billion.

A bank cutting thousands of jobs just weeks before Christmas.

The likelihood of the economy getting tighter.

You've got questions about what 2027 will feel like? You don't need to wait, we've got economic dislocation and fear in stark view.

Take one for the team

Reserve Bank of Australia (RBA) governor Michele Bullock is one of the most highly paid people in Australia.

In 2025-2026, she received total remuneration of $1.22 million. Her salary increased by 2.4 per cent and is set by the independent Remuneration Tribunal. Good on her.

Bullock is vastly experienced, manages 2,039 staff in 11 offices and has so much money to manage she needs to carefully enunciate her "b"s and "m"s so that all the illions don't get mixed up.

But she wants her staff to take, effectively, a pay cut.

Last week, RBA staff again rejected a pay offer that would see their real wages, the growth in wages minus the impact of inflation, fall immediately. (Bullock's pay rise is also below inflation).

In the rejected three-year deal, staff would have got a 3.7 per cent increase in the first year, then 3 per cent in 2028 and 2.8 per cent for the subsequent year.

The consumer price index (CPI), which measures the speed of price rises, says costs are going up 4 per cent a year. This means the deal would be a cut to their purchasing power, an erosion of real wages.

In its own words, the bank acknowledges its people would be going backwards at a high speed.

"Underlying inflation is expected to remain above 3 per cent until mid-2027, before declining to the midpoint of the 2-3 per cent target range in 2028," the bank's statement on monetary policy declared in August, before inflation kicked up another gear.

And there's a further sting.

The bank prefers to use a measure of "underlying" inflation called the trimmed mean, and who can blame them. The trimmed mean reduces the spiking impact on inflation of volatile items, like the rocketing oil price, which makes filling up vehicles more expensive.

People don't have that luxury. When fuel goes up they can't simply exclude it. They wear it.

Fragile AI eco-system

Sanderson Street in Yarraville, in Melbourne's inner west, has a creek up one end, a cemetery at the other and now a curious mantle: greatest destroyer of capital on the stock exchange by a single street this year.

Residents saw the march of industrial-sized concrete power poles heading towards NEXTDC's mammoth data centre, near their homes. When they parked cars in the street to stall the installation they set in train events that focused attention on the fragility of the trillion-dollar build-out of AI infrastructure.

In a small act of civil disobedience, they wiped $4 billion off the value of one of our biggest listed companies.

With bolshie residents in the streets and a furious local member of parliament on the phone, electricity distributor Jemena did a swift reverse ferret, filling in the already-drilled holes and announcing the commencement of "engag(ing) with the local community". How timely!

In the tightly leveraged world of AI and data centre financing, this delay shook the company to its core.

Forget its score of existing and proposed centres across the nation, in an announcement to the market NEXTDC revealed projected revenue would drop by one-third, it would stop building some centres and consider selling land-banked sites it held.

All of which explains why NEXTDC started the week as a $7 billion company and ended it valued at closer to $4.1 billion.

What it doesn't explain, yet, is how fragile the entire eco-system of AI-powered companies appear to be.

As a multi-trillion-dollar hyper-scaler race goes on here, in the US and around the world, there could be other suburban streets that inadvertently crush what's seen as the future of capitalism.

NAB's job cuts not not about AI

Into this deepening chasm between people and capital strolls NAB, the third most valuable company in the nation (after BHP and Commonwealth Bank).

It revealed it would cut 2,500 jobs, most by Christmas, as well as an unknown number of consultants and contractors, to "simplify its operating model".

There was no direct reference to AI in what NAB told the market, although it did refer to "rapid technological change". Staff being pushed out were more direct about why they were cut.

As Swinburne University of Technology governance expert Helen Bird told me: "What the bank fails to explain to its investors is how it is going to achieve these cited benefits."

As if you need more scaring, senior NASA engineer and manager Jeevan Perera told ABC's The Business that every human is pretty doomed anyway.

"With the capabilities I've seen in AI and automation, I can't think of a position or a job that can't eventually go away to full automation," he said.

And that's all before we careen into the next meeting of the Reserve Bank's monetary policy board, better known as "the people who set interest rates".

A rise in the rate on Melbourne Cup Day is now a coin flip, with the coin weighted towards a rise. If the board chooses to lift rates it makes money more expensive. People can borrow less and those with debts face bigger repayments. (Let's note that those who have paid off their housing and have money in the bank, deposits, see increases in their returns as well).

Even though unemployment has lifted, RBA deputy governor Andrew Hauser worried he's facing the "central banker's nightmare", where businesses start to expect inflation to stay above 3 per cent a year. They raise prices. Workers demand wage rises to deal with it (and generally don't get them). Consumer spending and business confidence slump.

All these things happen at the same time. Companies make decisions. Leaders make choices. Poles sometimes don't go up on time. Ordinary workers and investors are left in a swirl.

Right now, some of our largest and most visible institutions are trimming or fighting with employees, in an economy that's powered by the build-out of job-changing technology that is both gargantuan and seemingly brittle at the same time.