Jim Chalmers has made half a dozen sensible board appointments that will see the Reserve Bank make an orderly transition to a modern operating system.
The low-risk shift is straight out of an episode of Veep or Malcolm Turnbull’s 2016 election campaign: continuity and change.
With the help of a safe and steady brains trust, the Treasurer has gone to the top shelf of tried and tested directors and chosen wisely.
The four women and two men are all from the elite echelon of power and prestige; they know their way around board rooms and how the economic policy pieces fit together.
It would have been great to see the bold appointment of a young gun economist to challenge the establishment and bring fresh views, but we’ve become an old, slow nation in such things.
The mystery, nay scandal, is that after the Albanese government responded in April last year to an independent review of the central bank, it has taken so long to get this bureaucratic housekeeping done.
Perhaps it was the initial haste with which Chalmers backed in the expert panel’s recommendations that scared the slow horses.
From next year, we’ll have a Monetary Policy Board, which will determine interest rate policy; it will include current officials RBA governor Michele Bullock, deputy governor Andrew Hauser and Treasury secretary Steven Kennedy, and ongoing external members Carolyn Hewson, Ian Harper, Iain Ross and Alison Watkins.
They will be joined by former bank chief Marnie Baker and ANU economics professor Renee Fry-McKibbin, one of the three experts who reviewed the RBA’s performance, culture and operations.
The external members of the Governance Board will be current RBA board members Carol Schwartz and Elana Rubin, and new appointees Jennifer Westacott, David Thodey, Danny Gilbert and Swati Dave.
These folks are all successful grown-ups, who have run major corporations, government departments, service firms, lobbying outfits or taught the next generation of Canberra’s econocrats.
You wonder about the procedural palaver of the past 20 months and shake your head in dismay.
The delay is certainly not the custodian’s fault.
Chalmers ran an orderly process, and consulted widely, but there’s little trust in the room whenever he sat down with his opposite number Angus Taylor to find common ground.
The Coalition created fears about Labor’s zeal to “sack and stack” the rate-setting board; that somehow the new body would be overrun by the hard men of the building cartel and the soft hearts of the care economy; that it would be weak on fighting inflation because it would always prioritise employment in pursuit of its dual mandate.
The federal opposition will no doubt argue, without any credible counterfactual, that without its scrutiny and diligence, Chalmers would have relied on the “mateocracy”.
As well, part of the blame for delay can be spreadsheeted home to the wise and cranky uncles of policy past, who cherished the old ways and did not believe a refresh could deliver a risk-free new model.
Then there’s the zero-sum bare knuckle politics that is standard operating procedure in Canberra.
The Greens did the same thing with housing policy, to what end?
If we can’t do a basic institutional refresh, how will we ever manage to again cut through with disruptive reforms that benefit the quiet many at the expense of the noisy few?
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