Michele Bullock has been governor of the Reserve Bank for just under five months. She’s gone well past the first 100 days, so often used as the marker for assessing someone’s effectiveness and achievements in a new office.
On Tuesday, she projected confidence and calmness, clarity and control – both of the policy decision and the analytical framework, and the all-critical messaging into the year ahead – at her first-ever post-meeting media conference, and indeed the first-ever such conference by any RBA governor in its 60-plus year history.
It is very, very important for me to explain just how - uniquely - extraordinary has been Bullock’s performance over the five months.
It is important to get it on the record. It is even more critical for understanding what and - in some ways, even more crucially, when - the RBA will next do something with its official interest rate.
Bullock has had to negotiate these five months – and four rate-setting meetings – without either a deputy governor or a head of the RBA’s economic analysis and research group.
The new deputy – Andrew Hauser – will finally arrive from the Bank of England at the end of the month, ahead of the next policy meeting in mid-March.
The new chief economist – Sarah Hunter – will also finally arrive this month, in her case from Treasury. Again, nearly seven months after her predecessor, Luci Ellis, left to become chief economist at Westpac.
It is impossible for an outsider to fully understand the day-to-day burden imposed on Bullock in not having a deputy.
Far more potently, is the absence of the deputy’s support in deciding what to do about interest rates ahead of a meeting, and then both through the meeting and the all-important vote.
The RBA board comprises the two insiders – the governor and deputy – the treasury secretary Steven Kennedy, and six outsiders.
So, in the four meetings so far, Bullock has had to do it all on her own.
That includes the Cup Day meeting when she led the board to agree to a rate hike. Over the express, publicly stated opinion of the Treasurer, Jim Chalmers, not to hike.
Now I don’t want to go back to debating again the rights or wrongs of that decision – or indeed the two rate pauses since.
But to share with you this critically important but not appreciated point.
Bullock has shown she has been exerting clear leadership and command of the board through this very tricky period, and without a deputy.
We don’t know how the board voted at any of the meetings.
Bullock was asked on Tuesday about the vote. She parried, by saying the board was still operating under the “old (non-vote disclosure) rules”.
But the answer is clear. If there has been any dissension, it has been muted to non-existent.
It has been a remarkable and very telling achievement.
To stress. Bullock is heading into 2024 in clear command of the board. She will now also have a deputy in both the office and the boardroom.
Bluntly and emphatically, she will decide the next rate move and when.
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