Jim Chalmers announces new appointments to split RBA board

In the biggest reform to the RBA in more than three decades, Jim Chalmers has revealed the new names tasked with determining the cash rate.

Jim Chalmers has announced two new appointments to the Reserve Bank’s new monetary policy board which will be tasked with determining the cash rate, separate from a newly-created governance board.

The reforms, described as some of the biggest in three decades, are scheduled to take effect from March 1, and was one of the key recommendations from the 2023 review in the central bank.

Of the existing board, Carolyn Hewson, Ian Harper, Iain Ross and Alison Watkins shifted to the monetary policy board, with the Treasurer also appointing economist Renée Fry-McKibbin, who also participated in the 2023 review, and ex Bendigo and Adelaide Bank chief executive Marnie Baker.

The revamped committee will be chaired by RBA governor Michele Bullock, with deputy governor Andrew Hauser acting as deputy chair.

“What I wanted to do here is make sure that we got someone from the finance sector … the Governor and I were very clear about that,” he said.

“I know that some people will think these are great appointments, other people will have a range of views about that. That’s fine with me, I’m confident we have struck the right balance.”

Treasurer Jim Chalmers announced the new names of the RBA boards, which have now been divided into two committees responsible for governance and setting interest rates. Picture: NewsWire/ Glen Campbell

Members of the governance board, tasked with the day-to-day operations, will be Carol Schwartz as deputy chair, and Elana Rubin, as well as newly appointed former boss of Export Finance Australia Swati Dave, ex Telstra boss David Thodey, lawyer and philanthropist Danney Gilbert, and Western Sydney University chancellor Jennifer Westacott.

The new appointments were made after Labor managed to pass the legislation with the help of the Greens, after the Coalition pulled bipartisan support.

RBA Governor, Michele Bullock will maintain her role, and chair the monetary policy board. Picture: NewsWire/ Jeremy Piper

Announcing the new names, Mr Chalmers said he had attempted to make the new appointments “as bipartisan as it could be,” and said the additions of Prof Fry-McKibbin and Ms Baker were flagged with Shadow Treasurer Angus Taylor in July.

“There was a lot of much broader informal consultation as well throughout the course of the year. I consulted the Shadow Treasurer in July, five months ago, and again last week,” he said.

“We asked for suggestions from the opposition and that’s because we took our responsibilities to consult very seriously.”

Mr Taylor, who opposed the creation of the two boards, said the move was “destablising” at a time of economic uncertainty, high inflation and high interest rates.

While serving board members were given the option to choose which board they would transition to, Mr Taylor has said they should have all been moved to the monetary policy committee to ensure “stability” and “continuity”.

“This will not be a solution to the problem. We’ve been very clear for well over a year that we want to see a credible, capable and independent Reserve Bank that has stability in its government, stability in its government,” he said, adding that his opposition to the reform was not about the “merit of individual board members”.

“We know that a Reserve Bank, or any central bank that does not have independence, does not have stability, will find it extremely challenging to bring down inflation and interest rates on a sustainable basis.”

The new members will have staggered terms between four-and-a-half years and five years, which was intentionally done to ensure reappointments didn’t occur at the same time, and to “continue to balance the perspectives of existing members and new members”.

Ms Bullock welcomed the appointment of the new members to both boards, in particular Ms Schwartz and Ms Rubin for switching to the governance board.

“In particular I extend my gratitude to Carol Schwartz and Elana Rubin for their invaluable

contributions to the Reserve Bank board and thank them for their dedication and willingness to ensure continuity on the governance board.,” she said in a statement.

“I am looking forward to working with Marnie Baker and Renee Fry-McKibbin. Their expertise and insights will be vital as we continue our efforts to bring inflation back to target.”

“The new members appointed to the governance board, Swati Dave, Danny Gilbert, David Thodey and Jennifer Westacott, will greatly assist the RBA in supporting and overseeing management as we continue to transform the organisation.”

Originally published as Jim Chalmers announces new appointments to split RBA board