Chalmers’ RBA appointments spark fresh fight over rate-setting board
Jim Chalmers will unveil his picks for the new rate-setting board, as he attacked the Coalition for dealing themselves out of negotiations after abandoning bipartisan support on RBA reforms.
Jim Chalmers will unveil his picks for the new Reserve Bank rate-setting board as early as Monday, with the Treasurer attacking the Coalition for dealing themselves out of negotiations after abandoning bipartisan support on RBA reforms.
Amid expectations the new monetary policy board will include appointments appeasing both union and business leaders, Dr Chalmers said his additions to the RBA board would be “first-rate, first-class appointments”.
Dr Chalmers, who revealed he had given opposition treasury spokesman Angus Taylor the opportunity to suggest names and respond to his proposals, said he was following through with the “key recommendation” of the RBA review.
The Australian understands while Dr Chalmers has given all existing RBA board members an opportunity to sit on the rate-setting board, some are expected to shift to the governance board. The new board structure will commence in March, following the RBA board’s first meeting next year on February 18.
The RBA board, which remains concerned about underlying inflation and the tight labour market, has come under political pressure from the unions and Labor figures for not lowering the cash rate from its current 4.35 per cent. The Albanese government remains hopeful the central bank will deliver a pre-election rate cut in either February or March.
Despite a recent uptick in inflation, the US Federal Reserve board this week is expected to again cut rates. The ACTU is arguing that moves by central banks across the globe to slash rates means the RBA should follow suit.
Dr Chalmers on Sunday confirmed he had spoken with Mr Taylor on Friday about the new RBA appointments, and said “people will see the quality and calibre of the people that we intend to appoint to these important boards”.
“I’ve consulted now with my Cabinet colleagues and I’ve consulted again with the shadow treasurer, and the names that we will be proposing are the product of a very substantial and robust process involving the Reserve Bank Governor (Michele Bullock), the Treasury Secretary (Steven Kennedy) and an independent third party,” Dr Chalmers told Sky News.
“We’ve given the Opposition the opportunity to suggest names. We’ve given them an opportunity five months apart to respond to the people that we are proposing, and beyond that I don’t really want to go into the nature of the conversation.”
The Australian last month revealed Dr Chalmers was being pushed by the union movement to shape the RBA’s new interest rate-setting board to serve “workers’ perspectives”, as former central bank governors warned appointments made so close to an election risked being politicised.
Mr Taylor said the Coalition had “suggested names” but remained concerned that Dr Chalmers would pursue a “sack and stack strategy”.
“I think anything other than taking the existing board and transitioning it to the new board is, I would say, political. It’s a sack and stack strategy. That’s been the politics of this issue. We’ve said we’d work with the Labor Party, but we don’t support sack and stack,” Mr Taylor told Sky News.
Mr Taylor said the Coalition “know how Labor deals with appointments … they get their own way, and they find ways of doing that”.
“We said we wanted the current board transitioned over. We wanted stability in the board. We’ve seen someone standing at the drafting gate deciding which current board members they want on the governance board, which current board members they want on the monetary policy setting board. We said that’s unacceptable.”
Ms Bullock, Dr Kennedy and deputy RBA governor Andrew Hauser will transfer to the rate-setting board under the new arrangements.
The terms of four current external board members, Ian Harper, Carol Schwartz, Alison Watkins and Carolyn Hewson, are due to expire in the next term of parliament.
The remaining two members – former AustralianSuper chair Elana Rubin and former Fair Work Commission president Iain Ross, both former ACTU officials – were installed by Dr Chalmers last year, meaning their terms expire in 2028.
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