Jim Chalmers has made the smart and thoughtful call for the Reserve Bank and the Albanese government.
Change with continuity – that’s the meaning of the elevation of bank veteran Michele Bullock as the new and ninth Reserve Bank governor.
This decision should reassure the markets. It gives the central bank its first female governor and a fresh image. And it constitutes a vote of confidence in Bullock’s ability to lead the bank through historic changes.
Anthony Albanese and Chalmers have left Australia with its potentially strongest economic team: Bullock at the bank, Steven Kennedy remaining at Treasury and Jenny Wilkinson staying at the Finance Department.
Peter Dutton has blundered badly. His comments, by implication, bagging Kennedy and Wilkinson as “political” or “tainted” were misconceived, ludicrous and unnecessary.
These departmental heads are known by both sides as professional public servants.
Dutton’s remarks undermine the Liberals as a governing party.
They suggest the party of Robodebt still doesn’t know how to deal with the public service.
Albanese and Chalmers went to town against Dutton and nobody can blame them.
Bullock’s appointment reveals a lot about Chalmers and this government. He wants change and improvement at the bank but wants to avoid any hint of a radical remaking or a distinct shift in interest rate appraisal. For Chalmers, this decision is about stability, confidence and balance. He has made the astute call on each front.
Chalmers was right not to extend the term of Phil Lowe.
He has not been sacked. His term was just not extended, like five of the previous eight governors. This was not because Lowe increased interest rates – that was the bank’s job – it was because of his mistakes in monetary policy and faulty forward guidance.
Lowe welcomed Bullock as a “first-class” appointment.
The opposition’s last-minute flirtation with Lowe has been bizarre, lecturing Labor you shouldn’t change a governor when his terms has expired. Another blunder. Opposition Treasury spokesman Angus Taylor corrected the Coalition message with his congratulations to Bullock.
Bullock has obviously persuaded Chalmers and Albanese that she can drive through the substantial change agenda outlined in the RBA review report. She said on Friday her role will be “leading the bank through change”.
Her appointment is not a surprise. Chalmers said she brings both experience and expertise to the task.
The Treasurer said Bullock would be a governor who was “fiercely independent”. It would be good if the government, with Bullock in charge, actually began supporting the bank’s decisions.
Bullock’s challenge will be substantial. As Lowe kept saying, there is only a narrow pathway for the bank to beat inflation without tipping the economy into a serious downturn.
Bullock will put her own stamp on the bank and on monetary policy. Beware pundits pretending to know how she will function.
But Bullock’s knowledge of the bank as an insider since 1985 is probably a good omen in terms of promoting the necessary cultural change. Getting the balance right is the task. Bullock’s record points to a touch-minded central banker, receptive to debate but unpersuaded by political fashion.
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