Michele Bullock lays out RBA’s three key priorities

Michele Bullock will focus on three key priorities: improving monetary decision-making and communication, infrastructure resilience and the future of payments.

Incoming Reserve Bank governor Michele Bullock will prioritise work to improve the bank’s monetary policy decision-making processes, including strengthening and embedding communication capabilities throughout.

The RBA’s 2023/24 corporate plan, the first introduced by Ms Bullock as governor-designated and released Thursday, said the central bank’s priorities for the next three years are guided by the many recommendations from its recent independent review.

The government-mandated review in April made 51 sweeping recommendations to improve its decisions on monetary policy and avoid past mistakes, such as the bank’s incorrect guidance that interest rates wouldn’t increase until 2024.

“Good decisions are founded on processes that provide quality information, enable deliberation and debate and promote accountability,” according to the bank’s corporate plan.

“We will enhance the processes supporting monetary policy decision-making, invest in our capacity for analysis and facilitate greater debate. We will also improve our capability to explain decisions to different audiences.”

The reform at the bank will include redesigning processes, meetings and materials supporting the board’s policy decisions, and providing opportunities for board members and staff to engage more deeply on policy, it says.

Responding to the review in July, outgoing RBA governor Philip Lowe said the bank will now meet eight times, rather than 11 times per year, policy meetings will be longer, and that a media conference will be held after each monetary decision is announced to explain it.

On Thursday, the RBA also said its other two strategic priorities for the four years ahead included improving the resilience of Australia’s critical payment and banking services infrastructure and reshaping the future of money in Australia.

“These external-facing strategic priorities will be facilitated by an internal focus on creating more agile processes and promoting high-quality leadership and an open and dynamic culture,” Ms Bullock said.

Ms Bullock - the first woman to ever lead the RBA - will begin her term next month, stepping into the role amid a rates tightening cycle to battle high inflation, particularly services inflation, in a tight labour market.

Climate change, weak productivity growth, the threat of cyber attacks, innovation in the payment system from big tech companies, and a shift away from cash for payments are some of the external challenges the bank is facing, the plan says.

The RBA said it will also embark on a four-year program to modernise its core infrastructure network to improve its resiliency and stability. It will increase its use of cloud services, automation, and boost its cybersecurity defences.

It will pay particular attention to “enhancing” the operating model of Australia’s payment settlement systems and boosting its cybersecurity defences.

“Australians need safe, efficient and cost-effective payment options,” the document said.

“As the payments landscape changes, we will help shape the future of money by exploring the case for new digital forms of currency, and by ensuring cash remains a viable means of payment for those who need or want it.”