Reforming the Reserve Bank of Australia doesn’t come easy. Last year we had the first review in more than three decades into interest rate setting at the central bank. And now the legislation to enact the review’s recommendations is stalled, due to the opposition’s objections. Fortunately, there is a straight-forward solution that would deliver an even better outcome.

The RBA’s performance over the past three decades of its independence and inflation targeting has been generally good. Inflation has averaged around the centre of the bank’s 2-3 per cent target, and economic growth has allowed the unemployment rate to trend down over the inflation-targeting era.