Brutal calls for RBA governor Philip Lowe to go over interest rate ‘outrage’

RBA boss Philip Lowe is facing intense pressure over Australia’s interest rates disaster, with a Labor powerbroker calling for his sacking.

Labor powerbroker Stephen Conroy has called for Reserve Bank of Australia Governor Philip Lowe to “lose his job”, describing the interest rate hikes as “an outrage” as he defended the decision of Labor frontbenchers to urge the central bank to put the brakes on.

As a new analysis reveals Australians with an average fixed mortgage could be hit with an extra $16,500 in interest repayments a year if they have a $600,000 mortgage, Labor frontbenchers are breaking ranks to urge caution.

Former minister Stephen Conroy, who remains an influential ALP powerbroker, slammed the Reserve Bank today, suggesting it was “getting it wrong” by trying to tackle inflation with consecutive rises without pause.

“The Reserve Bank Governor is operating off a flawed economic model, he won’t admit it, he was wrong two years ago where he told everybody interest rates wouldn’t go up,” Mr Conroy told Sky News.

“The industrial relations system is broken, Australians are getting declining, falling real wages and off the back of that he’s then slugging them.

Homeowners have been slugged with months of brutal rate rises.

“This is an outrage, what the Reserve Bank Governor is doing, which is why he should lose his job later this year.”

Mr Lowe’s seven-year term as RBA governor expires on September 17, 2023.

He faces a grilling in Senate estimates on Wednesday over the RBA’s strategy amid fears it could plunge Australia into a recession.

Mr Conroy, backed by the intervention of Assistant Treasurer Stephen Jones, came close to suggesting the RBA should hit the pause button.

“We know there’s around 800,000 mortgage holders who haven’t yet felt the full brunt of the interest rate increases that are already in the system,’’ he said.

“They don’t start to cycle off until mid-year, which is why we think that there’s already a fair bit of pressure in the system and we’re hoping that we don’t see further interest rate increases.

“The Australian Government will do its bit to ensure that we are bringing down the pressure on inflation, which is why we hope the Reserve Bank Board can see its way clear to ensuring that we aren’t lifting interest rates any further than they absolutely need to be to tame the inflation dragon.”

There are growing calls for RBA governor Philip Lowe to lose his job. Picture: Brendon Thorne/Bloomberg

Asked if he thought the RBA governor was doing a good job, he replied, “Look, Philip Lowe’s got a very tough job”.

But that prompted a reaction from Liberal frontbenchers, who urged Prime Minister Anthony Albanese to “haul him into line”.

Traditionally, the Prime Minister and Treasurer Jim Chalmers have stressed the independence of the Reserve Bank to set interest rates without it being controlled or directed by the government of the day.

Labor frontbencher Ed Husic also backed the Assistant Treasurer to caution that the government also wanted to protect jobs.

“And it’s important to send that signal,” Mr Husic told Sky News

Liberal frontbencher Simon Birmingham accused Mr Jones of “undermining the messaging” of the Reserve Bank.

“Now Treasurer Chalmers and Prime Minister Albanese need to pull Stephen Jones into line or push him out of the ministry if he’s going to continue to speak out of turn and undermine the independent reserve bank,” Mr Birmingham told Sky News Australia on Tuesday.

Mr Lowe’s seven-year term with the RBA expires in September.

Treasurer Jim Chalmers dropped a big hint that Reserve Bank governor Philip Lowe may not be reappointed on Sunday.

Dr Lowe previously issued an apology in November for suggesting that the central bank’s cash rate would stay at 0.2 per cent until 2024, when instead it started rising in May 2022 and is already at 3.35 and expected to rise further.

“He’s got a hard job to do. He’s got to balance getting on top of this inflation challenge without crunching the economy … I’m not going to second guess the Reserve Bank governor,” Dr Chalmers said.

“I genuinely respect his independence, as I’ve said probably hundreds of times, in opposition and now in government. I think that’s an important feature of the system.”

Originally published as Brutal calls for RBA governor Philip Lowe to go over interest rate ‘outrage’