New deputy governor Andrew Hauser reveals plan to shake up RBA culture

British economist Andrew Hauser has been brought in to change the RBA’s culture. Here he reveals how he plans to do it – and that he was once knocked out by a boomerang. See the video.

Exclusive: The new broom at the RBA – British economist Andrew Hauser – was once knocked out by a boomerang. To be frank, his head is a big target. He hasn’t been able to find an Akubra large enough to fit it.

This megamind is the most senior outsider ever appointed to the Reserve Bank of Australia, after he was named deputy governor by Jim Chalmers in February, filling the vacancy created when Michele Bullock was elevated to replace Philip Lowe.

The job grants Mr Hauser a seat on the RBA board, which sets interest rates, meaning he now wields enormous influence over household finances.

The Treasurer also wants the former Bank of England executive director to drag the Reserve into the 21st century, including by making it more transparent and open to debate.

Mr Hauser told this masthead his hope is to create a culture in which the RBA’s junior staff aren’t afraid to challenge their bosses.

New RBA deputy governor Andrew Hauser. Picture: Richard Dobson

There is considerable work to do.

“I have found people who, when I say something, they start writing it down and say, ‘Oh, the deputy governor said this, it must be right’. And I think, ‘Oh, my God, I don’t know if it’s right. I’ve been here ... six months,” the 54-year-old said.

“If you come to Australia, your cliche of an Australian is ... someone who’s willing to speak truth to power, be very straight and direct, sometimes brutally so,” Mr Hauser said.

“And I think that is internal to RBA staff. I want to make sure that we bring it out.”

He has already been labelled a “wanker” and “tosser” by former federal Labor Cabinet minister turned pundit Stephen Conroy, after delivering a speech that criticised “false prophets” in the media who claimed to have “supreme confidence or certainty” about the outlook for interest rates.

Overconfidence was not unique to economic commentary, Mr Hauser added in the Brisbane speech. People were too sure NSW will win the 2025 State of Origin series, simply because the Blues triumphed this year.

From Mr Hauser’s speech, a chart demonstrating overconfidence. Picture: rba.gov.au

His lecture did not acknowledge that in the recent past the RBA itself exhibited seeming certainty about the future direction of monetary policy – a misstep that led to Dr Lowe’s demise and a wide-ranging review of the bank, which made more than 50 recommendations for change.

Asked about the false prophets speech, Mr Hauser did not repeat his attacks.

Instead, he said: “Central banks generally have to be ... particularly humble in light of the last few years.”

While it was still necessary to form a view about the outlook, “you must also ask yourselves, ‘how could we be wrong?’,” he said.

Posing such questions is second nature to Mr Hauser.

As a child, he took part in experiments run by the legendary Edward de Bono, who coined the concept of “lateral thinking”. He went on to study politics, philosophy and economics at Oxford University.

Mr Hauser has been visiting Australia for 20 years, since his sister moved here. She is married to the head of classics at the University of Sydney.

During one such trip, about a decade ago, he was with her twin sons in a park when one of the boys threw a boomerang.

As it turned out, Mr Hauser was overly confident that the boomerang would not come back.

But it did, clattering into his temple.

He was taken to a busy hospital in an ambulance.

After an initial assessment, it was hours before he received any further medical attention.

Then a doctor appeared.

“He got all his mates around (and said) ‘this is the guy that got hit with a boomerang,’ and then burst out laughing,” Mr Hauser recalled.

“He says, ‘I’ve got to be honest with you, mate. This is a tough job, right. We see awful things. This has made our week: a Pom, straight off the plane, gets hit by a boomerang’.”

At the Bank of England, Mr Hauser was instrumental in crafting a £65 billion ($A126bn) emergency response to a surprise mini budget by short-lived UK Prime Minister Liz Truss. The BoE intervention averted a financial crisis.

Asked to nominate what had surprised him since arriving in Australia, Mr Hauser pointed to a question that leaders across the country had raised with him at the end of “serious meetings” about global affairs and monetary policy.

“They’ll turn to me and say, ‘I’ve got to ask you mate … what are you doing here?’

“I’ve been a bit puzzled,” Mr Hauser said.

“To me, the only answers to that are positive.

“I’m learning a new organisation, hopefully helping the organisation to modernise and challenge itself.

“I’m here in a new country, a fantastic country, a new economy to learn, a new society to learn.

Mr Hauser is on a mission to modernise the RBA’s culture. Picture: Richard Dobson

“And of course, Sydney is the best city in the world, and I’m not just saying that.

“What might they think there is not to like here?

“Now I don’t mean to say I think that it’s a holiday or something.,” Mr Hauser said. “It’s a good job. It’s an important job. We’re in the middle of a difficult period for policy, and that is stimulating.”

Mr Hauser declined to discuss interest rate settings, but he did say conditions in the job market were “still reasonably tight”.

This means supply is struggling to meet demand and suggests the RBA remains unlikely to cut borrowing costs before next year. The next announcement on rates will be on December 10.

Originally published as New deputy governor Andrew Hauser reveals plan to shake up RBA culture