ACTU to ratchet up pressure on Reserve Bank’s Bullock as rate cuts remain months away

RBA governor Michele Bullock is set to stare down growing demands for interest rate relief, as the union movement on Monday will move to ratchet up pressure on the central bank which remains at the back of pack in the global rush to cut rates.

ACTU secretary Sally McManus will demand the Reserve Bank moves to cut interest rates. Picture: NewsWire / Nikki Short

RBA governor Michele Bullock is set to stare down growing demands for interest rate relief, as the union movement on Monday will move to ratchet up pressure on the central bank which remains at the back of the pack in the global rush to cut rates.

ACTU secretary Sally McManus and union members are expected to gather outside the RBA’s headquarters in Sydney to demand the RBA to “follow the rest of the world” and reduce the cash rate as board members arrive for their final two-day meeting of 2025.

The intervention comes amid growing tensions between the labour movement and the central bank as hope of pre-election rate relief dim, with the majority of economists tipping a quarter- point cut at the central bank’s May meeting, to be three days after the cut-off for the federal poll which is due on or before May 17.

After accusing the RBA of “smashing the economy”, Jim Chalmers’ has since steered clear of any commentary which would suggest displeasure over the RBA’s interest rate settings, and the Treasurer instead stressed the institution’s independence.

However, a growing number of voices in the broader labour movement, including key union figures and the ALP’s own president Wayne Swan, have demanded that the RBA move to cut interest rates, heaping additional pressure on the central bank.

Economists and investors, meanwhile, expect the RBA to remain firmly on hold at its December meeting, with stubbornly persistent underlying inflation, persistently strong employment and weak productivity outcomes expected to prevent interest rate relief for some time.

The final board meeting of 2024 comes as Dr Chalmers prepares to reshape the RBA’s board structure and make a suite of appointments to the central bank’s new rate setting and governance committees, expected to be operational by April’s meeting.

While Dr Chalmers promised to automatically transfer current board members onto the new rate setting board, at least one member had expressed a desire to serve on the governance board, The Australian understands.

That should permit Labor the opportunity to appoint at least one new board member to the specialist interest rate-setting committee before the looming election

Ms McManus had already called for the new rate-setting board to be shaped to serve “workers’ perspectives”, a demand that follows Dr Chalmers’ appointment of two former ACTU officials last year.