Angus Taylor ‘rolled’ by Coalition on RBA reform legislation, Treasurer says

Attempts to overhaul the RBA through bipartisan support have been quashed, but the Treasurer has suggested he’ll seek the backing of a surprise group.

An attempt to overhaul the Reserve Bank has hit a roadblock, with the Coalition withdrawing support and ruling out future negotiations with the government.

Shadow treasurer Angus Taylor confirmed the Coalition would be taking its own policy to the election, saying the decision was partly due to Jim Chalmers’ “blame-shifting” comments that successive RBA interest rate rises were “smashing” the economy.

“This is not how you conduct a negotiation. Spend 10 days bagging the Reserve Bank, and then introducing legislation into the parliament was completely unacceptable from our point of view,” he said on Tuesday.

“The Reserve Bank now needs to be able to get on with the job of doing what it’s doing within the context it has.

“It needs stability, it needs certainty, and now is not the time to be pursuing these reforms, given what we’ve seen from the government over recent times.”

Angus Taylor’s backflip showed the Coalition was ‘never serious on Reserve Bank reform’, Treasurer Jim Chalmers said. Picture: NewsWire / Martin Ollman

Earlier on Tuesday, the Treasurer said Mr Taylor had been “rolled once again” by his own party, despite months of negotiations to create two RBA boards – one to manage interest rate decisions and one for governance.

“The position that has been reported from the Coalition is irresponsible, it’s disappointing, but it’s not especially surprising,” Mr Chalmers said.

He said the government accommodated all six of Mr Taylor’s issues, including retaining the government’s section 11 powers to override RBA decisions, albeit limited to extreme situations.

The government had also acquiesced to flexible term limits and assurances senior RBA executives would maintain oversight of the governance board.

The Treasurer dismissed Mr Taylor’s concerns the government could sway the RBA, saying the reforms had the support of the bank’s governor, Michele Bullock.

“I have absolutely no intention of making political appointments to these boards … (Michele) Bullock has made it very clear that she would like to see the legislation passed and obviously the Coalition has not taken her view on board,” Mr Chalmers said.

He said it showed the Coalition was “never serious on Reserve Bank reform and it shows that they can’t be taken seriously on the economy as a consequence.”

Mr Chalmers slammed the Coalition’s backdown on Reserve Bank reform. Picture: NewsWire / Martin Ollman

With pathway for bipartisan support failing, Mr Chalmers said he would consider working with the Greens.

The minor party’s economic justice spokesman Nick McKim said while the Greens were willing to work with the government, he said the government needed to maintain its powers to override decisions of the RBA.

“We are very motivated to see Section 11 of the RBA Act and Section 36 of the Banking Act retained,” he said.

“Section 11 gives the Treasurer the ability to intervene to override the Reserve Bank when necessary.

“Dr Chalmers should use that power now to reduce interest rates and retain it so it can be used in the future.

“Section 36 allows the RBA to direct funds to productive areas of the economy like clean energy, rather than just the continued pumping of money into housing speculation.”