Greens demand Treasurer Jim Chalmers deploy ‘crazy’ interest rate strategy

Treasurer Jim Chalmers has been urged to adopt a “crazy” new strategy if he really thinks the RBA is smashing the economy – simply overrule it.

The Greens have urged Treasurer Jim Chalmers to adopt a “crazy” new strategy if he really thinks the RBA is smashing the economy – overrule the central bank and slash rates.

The RBA today announced it would keep the cash rate on hold following the September board meeting.

That means there will be no movement in interest rates for a whole year after they were lifted to 4.35 per cent on November 8 last year. 

However, the proposal to invoke the never-before-used Section 11 veto power in the Reserve Bank Act is being pushed by Greens senator Nick McKim in a move that has been described as “Trump-ish”.

The Greens are urging Treasurer Jim Chalmers to use his powers to overrule the central bank and slash interest rates, citing concerns about the RBA’s impact on the economy. Picture: NewsWire / Martin Ollman

If the RBA doesn’t take action, Greens spokesman Nick McKim has renewed calls for Treasurer Jim Chalmers to “use his existing powers” to cut them.

“The RBA are not infallible high-priests of the economy, and they often get it wrong,’’ he told news.com.au.

“Their decisions are nothing but political. The RBA’s current monetary policy is driving a massive wealth transfer from younger to older, from borrowers to savers, from renters to landlords and from mortgage holders to the bank’s record-breaking, eye-watering profits.

Senator McKim said he believed the Albanese Government should intervene to provide homeowners with urgent relief.

Greens Senator Nick McKim argues the RBA’s current monetary policy is causing a wealth transfer and putting financial pressure on homeowners and borrowers. Picture: NewsWire / Martin Ollman

“We wouldn’t tolerate unelected officials running the military without democratic oversight – why should we tolerate it in matters of the economy?’’ he said.

“If the RBA doesn’t reduce interest rates at today’s meeting then the Treasurer should use his power to bring them down.

“A 25 basis point cut to the cash rate will mean a home loan of $641,000 will free up about $100 a month in breathing space for family budgets.

“Continuing to punish renters and mortgage holders is grossly unfair because they aren’t the ones causing the inflation. There is little left in their household budgets to cut.”

It’s a plan that Finance Minister Katy Gallagher has slammed as ”all politics”.

“The Greens are just crazy,’’ she said.

Reserve Bank Governor Michele Bullock is tipped to keep the cash rate on hold on Tuesday following the September board meeting. Picture: NewsWire / John Appleyard

“They suggest that we do the job of the RBA, basically remove its independence, cut interest rates, and then they’ll pass a bill that strengthens its independence.”

The party intends to block Labor’s RBA reforms until the Treasurer enacts never-before-used powers to lower interest rates.

The Greens have now repeatedly urged the government, specifically Treasurer Chalmers, to intervene and lower the official cash rate from its current level.

“I just think the Greens are out of control at the moment, full of self-importance and out seeking a populist approach to everything. It’s crazy what they’re saying to us,” Senator Gallagher told ABC Radio.

“If that’s their ultimatum … no, we won’t work with that because that is crazy. It’s economically irresponsible, and we won’t do it.”