Australians are worried about foreigners and robots, the Governor of the Reserve Bank says, creating the "real crisis" in the economy of record low real wage growth through increased competition. 

Speaking at the Crawford Australian Leadership forum in Canberra on Monday, Governor Philip Lowe also took aim at the ongoing gridlock of the Australian political system, blaming it for lost opportunities and stifling economic growth. 

"There is a shortage of good ideas that can successfully navigate the political process," Dr Lowe said. 

"It is important that we have a sharp focus on the reforms that can make a real difference to our living standards, If we don't do this, we will fall behind."

Dr Lowe said investment in human capital through education was key towards driving the economy forward which he expected to pick up after a sluggish start to the year once the "animal spirits start to come back." 

The central bank's optimism on the outlook is a major reason it has resisted pressure for another cut in interest rates, which are already at record lows of 1.5 per cent.

Dr Lowe conceded there were hurdles ahead including slow wage growth, high levels of household debt and rising home prices in some of the major cities.

"[Globally] The big four economies have the lowest levels of unemployment in decades, you don't expect to hear that during a labour crisis," he said. 

"The crisis really is in real wage growth. Western workers feel like they cannot get a pay rise." 

In May, Australian real wage growth entered negative territory and stalled at an all time low. Wages are now growing below the pace of inflation, making everyday items more expensive. 

Dr Lowe said workers were "worried about foreigners and robots" and that this fear of competition had discouraged them for asking for a pay rise. 

"When anyone feels like there is more competition they are less inclined to put their price up," he said. "People also value security, one way to increase security is not to get a pay rise." 

"The problems we are talking about here aren't going to be solved In a couple of years, they are going to be solved in a decade," he said. 

Dr Lowe said he expected the tighter labour market to eventually result in people asking for higher wages and the distinction between "part time and full time work was old fashioned." 

"Some people working a few less hours is a probably a good thing," he said. 

Former Treasury chief Ken Henry laid the blame for lower wages on the shift in power from workers to technology. 

"Real average weekly earnings have fallen over the last four years, no one wants that," said the National Australia Bank chairman.

He said he felt more pessimistic now than he did in the 1980s despite improvements in the global economy. 

The CEO of Corrs Chambers Westgarth John Denton said the fundamental challenge for Australia was how to mange economic immigration and technological revolution. 

"Those two forces have been such a disappointment for many," he said, leading to the rise of populist politics and the ongoing stalemate described by Dr Lowe. 

"There are people we know who will never be able to see these new jobs we have created, because they won't be able to participate." 

With Reuters and Bloomberg