Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Poppy Johnston

Decision on RBA's top job due next year

The treasurer has left the door open to a possible change of leadership at the central bank, with a final decision to be made in mid-2023.

Jim Chalmers said the independent review of the Reserve Bank would inform the government's decision to keep governor Philip Lowe in the top job when his seven-year term expires in September.

"Obviously the Reserve Bank review in March will be relevant to those considerations ... not because we've asked for some kind of performance review of the governor, but because we want to learn from best practice and give the RBA the best structures and institutional settings we can," Dr Chalmers said.

The treasurer said he had a good working relationship with the governor and respected his independence.

Dr Lowe's leadership has been questioned following some forward guidance issued during the pandemic with poorly communicated conditions that suggested interest rates were unlikely to rise until 2024, with some - including the Greens - calling for his resignation.

Despite the time-stamped forecasts, the central bank started lifting interest rates earlier this year to combat rising inflation.

An array of voices have weighed in on the RBA's leadership structure via submissions to the review.

Several groups have called for greater diversity on the business-heavy Reserve Bank board, including a voice to represent workers.

The Australian Council of Trade Unions called for at least one position on the board with a labour movement background, which was echoed by the Greens.

The Australian Banking Association also wants to see enhanced diversity on the RBA board as part of a dual-board structure.

This would see the bank governed by two separate boards - one that sets interest rates and another that deals with day-to-day operations of the central bank.

Under the ABA's proposed model, monetary policy experts would be represented on the board as well as business and trade union experts.

Other common themes from the 78 published submissions include bolstered transparency and accountability, a more streamlined communication strategy and empowering the government to do more of the heavy lifting to keep inflation within target and employment firing.

"There's been a lot of interest in the composition of the board, the relevant expertise at the bank, the inflation targeting regime ... it's been already a really worthwhile process and I'm looking forward to that report that I'll get in March," Dr Chalmers said.

Shadow treasurer Angus Taylor said the opposition was working closely with the government throughout the review.

He said the bank had made forecasting errors in the past and some people had paid the price.

"So how we avoid a repetition of that is an important outcome of that review," he said.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.