Thankfully RBA boss Michele Bullock finally has a deputy by her side

Finally the RBA governor Michele Bullock has a deputy governor by her side. Now for the ‘Clayton’s’ overhaul of the organisation.

RBA governor Michele Bullock.

So, at last we get our – and more importantly, Michele Bullock gets her – deputy Reserve Bank governor, described in one place as a “Bank of England boffin”.

Boffin? Boffin? How quaintly English, seemingly plucked from a long-distant era. What, did he indeed come defrosted from the 1950s, Austin Powers-style?

The appointment comes just as Treasurer Jim Chalmers will unveil his “overhaul” of the RBA.

More a “Clayton’s overhaul” in reality – the overhaul you have, when … and most of you would know the rest.

The RBA’s core objectives remain the same – bluntly, motherhood ones, of changing interest rates to aim for low inflation and full employment.

What do you do – that’s to say, the RBA governor and board, and, oh yes, now also a deputy-governor do – when they clash?

You do exactly what every governor since Bernie Fraser has done since the early-1990s – and which, most critically, Bullock has made absolutely crystal clear, and repeatedly, in her two months and-a-bit in the job, she will also do.

You prioritise getting inflation back, and sustainable and relatively quickly, into the 2-3 per cent range.

For one big and absolutely fundamental reason – you cannot successfully sustain full employment without sustained low inflation.

It’s not that you choose to have low inflation over full employment; it’s because we have learnt over at least 60 years that the only way you get both – and low interest rates, as well – is by first getting low inflation.

It was appalling that Chalmers took this long to decide on the deputy.

Yes, Bullock was only deprived of a deputy, for two months, but they were a very critical first two months and two board meetings, including of course the seismic one on Cup Day.

This was the first time ever the RBA had not had a seamless and immediate deputy succession, mostly after the former deputy headed into the governor’s chair. As happened with the past four governors, deputy-succeeding departing governor, including of course now Bullock.

It didn’t only deprive Bullock of a crucial – almost by definition, supporting – vote at those two meetings, but she also lacked the key advice from a head of the Economics department, following the departure mid-year of Luci Ellis to Westpac.

In retrospect, Chalmers did us all a very big favour.

For it showed Bullock in command of a board of seven others, including both Chalmers’ Treasury head Steven Kennedy and two new Chalmers’ appointments.

Bullock was able to lead this board to the decision to hike on Cup Day over the clear, stated, preference of Chalmers that the RBA did not hike.

We obviously don’t know how the board voted – it could have been 8-0; it could have been 4-4 with Bullock using her casting vote as chairman. And we likely never will; unless Bullock or the board decides to tell us.

From February next year, after the “overhaul”, we will be told, in one of the few substantive changes.

But ahead of the December meeting next week, we have a decidedly hawkish governor in control of her board.

Good.