Greens key to realising RBA shake-up
The Greens are willing negotiate with Labor over the passage of its central bank reforms - sidelining the Coalition - if Jim Chalmers retains powers allowing parliament to override the RBA
The Greens will hand Labor an opportunity to pass its reforms to the Reserve Bank of Australia – sidelining the Coalition – if Jim Chalmers commits to retaining the parliament’s power to override decisions of the central bank board.
If the Treasurer agrees to keep the override, set out in section 11 of the RBA Act, The Australian understands the minor party is willing to enter into negotiations to help secure the passage of Labor’s RBA overhaul.
This would allow the government to bypass negotiations with the Coalition, but increase the negotiating power of the Greens who want the bank to take on a new objective “that addresses climate and ecosystem breakdown”.
The Coalition shares the Greens push to keep the parliamentary override in place.
But it has a further demand not shared by the minor party – that the current members of the RBA board continue to be entrusted with setting interest rates in any revamp of the central bank.
The Coalition is prepared to vote against the legislation if this demand is not met.
Speaking on Sky News on Wednesday, opposition treasury spokesman Angus Taylor said: “We’re deeply concerned about the Treasurer stacking the new RBA board.
“It’s clear he wants to clean out the board and stack his own people on it. And we’ve said that we want continuity ... because we need we need stability in setting interest rates and, most importantly, beating inflation.
“And that requires a central bank that is absolutely focused on the task ... I’ll tell you what would make it fight – if Jim Chalmers stacks it with his mates. He is opening this up so he can do exactly that.
“He’s refused to come forward in the legislation with a way to transition the current board on to the new monetary policy committee. And that’s a fight that’s unnecessary, but is about Labor playing politics.”
Dr Chalmers has provided no commitment that interest rate decisions will continue to be made by the current RBA board under the government’s proposed reforms.
However, this is not a sticking point for the Greens who support changing the composition of the current RBA board to “reflect a diversity of interests and expertise”, warning it is “tilted towards the priorities of business”.
In its submission to the review of the central bank – conducted by Carolyn Wilkins, Renee Fry‑McKibbin and Gordon de Brouwer – the Greens said the RBA Act “must be amended to require, along with the current appointment of the Governor, Deputy Governor and Treasury Secretary – one member appointed by trade unions (and) five independent members, appointed by the Treasurer”.
The Greens said these five members must “include no more than one person who is an executive or on the board of a large Australian company”, and the “appointment of no fewer than four people, in total, who are either women or gender diverse to the board”.
Should Dr Chalmers scrap plans to repeal the parliamentary override, the Greens' position would open the door for Labor to pass its reforms while retaining the ability to appoint new members to bank’s monetary policy board.
However, Labor would also need to win the support of two upper house crossbenchers in addition to the Greens if the Coalition opposes its legislation.
Tasmanian Senator Jacqui Lambie will reserve any decision until the senate economics committee delivers its report on the government’s legislation on March 21, while ACT
ACT Senator David Pocock is “looking into the proposed changes”.
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