Treasurer Jim Chalmers must name RBA governor Philip Lowe’s replacement

Treasurer Jim Chalmers has made no public statement that he will replace Philip Lowe as RBA governor but privately six names have been tossed around about who could fill his shoes.

The simple, brutal truth is that the train has left the station – and Philip Lowe is on it.

Treasurer Jim Chalmers has made no public statement that he will be replaced as Reserve Bank governor.

But equally and more importantly, he has made no public statement that he will be extended, like his two predecessors. And that failure is tantamount to an announcement of his replacement.

Indeed, privately it is a very different matter.

Chalmers has, I understand, shared the decision that he will be replaced when his term expires in mid-September, and, somewhat less certainly, who he will be replaced by.

Self-evidently, the prime minister at least, if not more cabinet colleagues, must know. Indeed, there is no way that Chalmers could have made the decision on his own; it must have been done jointly with the PM.

Six names have been tossed around, headed by the heads of both treasury, Steven Kennedy, and finance, Jenny Wilkinson.

Four are men, two are women – the other is current and relatively recently appointed deputy governor to Lowe, Michele Bullock.

She got the job when then-deputy Guy Debelle resigned abruptly last year to join Andrew ‘Twiggy’ Forrest’s Fortescue; although that proved to be short-lived and so Debelle is ‘available’.

Jenny Wilkinson is currently Secretary to the Department of Finance. Picture: David Geraghty / The Australian.

Appointing Kennedy would repeat the decision by – an, at the time, very unhappy - Paul Keating in 1989 to ‘shake-up’ the RBA by appointing his-then treasury head Bernie Fraser as the RBA’s first, and so far only, governor from outside the bank.

But if I – or anyone – was ‘making book’, Wilkinson would be the clear favourite, purely on the basis that we have a government led by a PM obsessed with gender identity grandstanding.

And if the choice is therefore between an outsider to lead and renovate – at least, as Chalmers & Co see it - a ‘reformed RBA’, or a ‘business-as-usual’ insider, well, you make the call.

Appointing Wilkinson would mean, at least initially, having both top jobs filled by women.

This really would be revolutionary change in the gender context, with the RBA moving in barely a year from never in 60 years having had either a female governor or deputy, to having both.

Let me be clear: Wilkinson is as qualified as all the others to become governor. And I don’t exclude Lowe from that comparison.

The problem – more with Lowe’s non-extension, and the appointment of her or indeed any outsider - is with that particular word that really captures the reality of the 21st century. Disruption.

This is not the time for disruption at the RBA, and certainly not inside the governor’s office.

Now of course, anyone ‘being disrupted’ takes that attitude. But the RBA really is different.

It is crucial to have it operating independent of political government in even the good times.

It is even more utterly crucial right now, when we are on the brink of losing – or worse, deliberately and casually throwing away - the sustained, rigorous low-inflation framework that’s been the foundation of our economic success over the last 30 years.

At the most basic Lowe should have been allowed to – and indeed mandated – to ‘finish the job’ of getting inflation back below 3 per cent.