Michele Bullock appointed RBA deputy governor

The most experienced among the RBA’s assistant governors, Ms Bullock is the first woman in this role in the bank’s 62-year history.

Michele Bullock acknowledges the impact of rising rates. Picture: John Feder

Australia’s first woman to be ­appointed deputy governor of the Reserve Bank has acknowledged higher interest rates will be “hard” on some households.

Michele Bullock, who met Josh Frydenberg on Friday to ­accept the job as the country’s second most senior monetary policymaker, said she was “absolutely honoured and delighted” to be the first female deputy governor in the RBA’s 62-year history.

With rates expected to rise in the second half of this year, Ms Bullock acknowledged that higher borrowing costs would be wrenching for some Australian households.

“It’s going to be hard on some people, absolutely no doubt about that, but also there are a lot of people who are going to be well prepared,” she said. “Businesses, too: their balance sheets are generally in pretty good shape.

“There’s a large group of ­people who have never seen a rate rise in their lifetime, really. But I think there has been a lot of work that the banks and APRA have done to ensure lending standards are good”.

Ms Bullock, a self-described “country girl” from the northern NSW city of Armidale, said “I think it a great honour to be the first woman”.

“I think this is important for young women coming through, to see you can succeed. I’m very privileged and also conscious I have a very big role to fill here, and an important one.”

Ms Bullock, who begins the new job immediately, was an ­assistant governor for more than a decade after beginning her ­career at the bank as a University of New England graduate in 1985.

She replaces Guy Debelle, who left the bank on March 16 to pursue his passion for climate change at billionaire Andrew Forrest’s Fortescue Future Industries.

With Australian households more indebted than ever, Ms Bullock becomes deputy chair of the RBA’s interest rate-setting board at a pivotal moment for the country. Underlying inflation has pushed above the midpoint of the bank’s 2-3 per cent target range for the first time in seven years, and a rate hike from 0.1 per cent would be the first rise in over a decade.

Ms Bullock said that, in aggregate, the Australian economy was well placed to endure higher borrowing costs.

“Banks are taking account of interest rate rises when they lend, and consumers are also understanding that (rates are likely to lift),” she said.

“We also know in the aggregate consumers did manage to sock quite a lot of money away during the pandemic.”

Ms Bullock would not be drawn on the potential impact of higher rates on house prices, which are plateauing at record levels after an extraordinary boom through the pandemic.

With governor Philip Lowe hailing from Wagga Wagga – also in regional NSW – the country’s two top monetary policymakers grew up outside the major cities.

“I consider myself a country girl,” Ms Bullock said. “I think the regions are really important for the country, not only economically, but also how we feel as a ­nation. Both my kids live in the ­regions, after growing up in the city. There are lots of great jobs and places to live in the regions, and I just hope with a bit of encouragement we can get some growth in some of those areas.”

Dr Lowe “warmly congratulated” Ms Bullock. “Michele brings a wealth of experience to the position. She has played a leading role in the bank’s work on financial stability and has a well-deserved international reputation for her work on payments systems. Michele also brings considerable management experience to the role and I look forward to working with her,” he said.

Dr Lowe’s seven-year term is due to expire in September next year, although the terms of previous governors have typically been extended by a few years.

Based on precedent, Ms Bullock will now be favoured to become the country’s first female RBA governor.

Treasurer Josh Frydenberg said “the Morrison Government looks forward to working with Ms Bullock and thanks Mr Guy ­Debelle for his outstanding contribution to the RBA over nearly three decades including the last six years as deputy governor”.

Opposition Treasury spokesman Jim Chalmers also welcomed the appointment.

“The departure of Guy ­Debelle has provided an opportunity for renewal in the most senior echelons of the RBA and it’s pleasing to see a woman appointed as deputy for the first time.”

Since joining the bank, Ms Bullock has ­enjoyed a number of “firsts”, including being appointed the first female assistant governor in 2010, and before that the first woman to be head of a policy department.

She is a member of the Council of Financial Regulators, which ­includes chiefs of the Australian Prudential Regulation Authority, the Australian Securities and ­Investments Commission and Treasury.

Originally published as Michele Bullock appointed RBA deputy governor