Philip Lowe out as PM readies to announce new RBA governor

The PM and Treasurer will announce the next RBA governor this week and I can confidently share it won’t be Philip Lowe nor our current ‘minister for energy idiocy’.

Perhaps Chris Bowen should be the next head of the Reserve Bank.

Perhaps – tongue only half-in-cheek - unfortunately, he won’t be.

The Prime Minister and treasurer will jointly announce the next governor later this week.

I can confidently share with you it won’t be our current ‘minister for energy idiocy’. It also won’t be the current governor Philip Lowe having his term extended.

As I wrote last week, the decision not to extend Lowe had already been taken jointly by the PM and Treasurer.

Despite the charade pushed out about a so-called ‘short list’ of seven names, still including Lowe, and with “cabinet to make the decision” later this month, the replacement had already been selected by the duo and had already accepted.

I cannot say with certainty who it will be. Although the hot favourite is the head of the Finance Department, Jenny Wilkinson.

She could even be ‘sold’ as ‘giving us’ our first budget surplus in more than a decade.

We are certainly getting left-field appointments everywhere, in this decade of extreme disruption that has been sired, so to speak, by ultra-loose monetary and fiscal policy out of Covid-19.

The new leader of the RBA is ready to be announced. Picture: NCA NewsWire / Nicholas Eagar

Monday saw the RBA’s Luci Ellis heading to Westpac.

So Ellis, who as head of the RBA’s economics department has had a major role in constructing monetary policy in recent years, goes to Westpac to comment on that policy and its consequences.

She will also aim to predict future policy out of a ‘somewhat different’ RBA, headed not be another RBA insider but an interloper from Canberra.

For Lowe will be gone this September and Michele Bullock, his current deputy is unlikely to move into his office.

There’s great historical irony in all this, including a Canberra insider moving to Martin Place as then treasury head Bernie Fraser did in 1989, courtesy of Paul Keating.

The irony is wrapped up in the fact that Westpac, in its former guise as the Bank of New South Wales, regarded itself for decades through the 20th century as, and indeed behaved as if it was, our central bank, controlling the currency.

Minister for Climate Change and Energy Chris Bowen. Picture: NCA NewsWire / Martin Ollman

Even, some might say, it still did after we actually got the RBA formally in 1960.

That conceit was given tangible form, with Westpac’s head office towering over the RBA’s at the top of Martin Place, so that Wales and subsequently Westpac chairmen and CEOs could literally ‘look down’ on RBA governors.

Oh yes, I’d nearly forgotten: Bowen.

Heaven forfend any suggestion that he would make a good or even half-competent RBA governor.

It’s the exact opposite – where would he do the lesser damage to the very fabric of this country?

For my entire commenting life, I’ve signed on to keeping inflation near-zero, with the 2-3 per cent inflation target as the absolute foundation of economic success and broader national prosperity.

But now we face a worse threat than 1970s-style high inflation: a minister deliberately, if idiotically unknowingly, embarking on destroying our electricity system and taking us back to the 19th century.

Through gritted teeth, if I had to choose, I would live with Bowen in Martin Place in Sydney just to get him away from our power grid.

Originally published as Philip Lowe out as PM readies to announce new RBA governor