Academic and former bank boss join RBA monetary policy board

The Treasurer has appointed distinguished economics professor Renee Fry-McKibbin and former Bendigo Bank boss Marnie Baker to the Reserve Bank’s new rate-setting board as part of the new-look central bank structure.

Jim Chalmers announces the two new appointments to the Reserve Bank’s monetary policy board. Picture: David Beach/NewsWire

Jim Chalmers has appointed distinguished ANU professor Renee Fry-McKibbin and former Bendigo Bank chief Marnie Baker to the Reserve Bank’s new rate-setting board, as the Treasurer presses ahead with the most significant overhaul of the central bank in decades.

The pair will replace two existing external board members, businesswoman Carol Schwartz and Telstra director Elana Rubin who will instead serve on a separate committee overseeing the RBA’s governance.

The new dual-board structure follows a sweeping review of the central bank last year, co-authored by Professor Fry-McKibbin, which found the existing board collectively lacked the expertise to challenge the interest rate decisions of the governor.

The changes will take effect in March, meaning the new rate-setting board will be in place for the RBA’s March 31-April 1 meeting, the final interest rate decision before the cut-off for a federal election, which must be held on or before May 17.

Professor Renee Fry-McKibbin.

Marnie Baker.

On Monday, money markets tipped a 93 per cent chance of an interest-rate cut at the RBA’s pre-election cash rate decision and were fully priced for a quarter percentage point cut at the central bank’s May 19-20 meeting.

Professor Fry-McKibbin joins the new rate-setting committee from the Australian National University’s Centre for Applied Macroeconomic Analysis, and holds a PhD in economics from Melbourne University.

She will be accompanied by Ms Baker, a former financial services executive who spent 35 years at Bendigo and Adelaide Bank, ultimately serving for six years as CEO and managing director.

RBA governor Michele Bullock will serve as chair of the new rate-setting board, with the central bank’s deputy Andrew Hauser and Treasury secretary Steven Kennedy also serving.

Four existing external board members – economist Ian Harper, Wesfarmers director Alison Watkins, former Fair Work Commission president Iain Ross and CSL director Carolyn Hewson – will also sit on the new rate-setting board.

Serving on the separate governance board will be former Business Council chief executive Jennifer Westacott, Gilbert + Tobin chair and Indigenous voice to parliament advocate Danny Gilbert, board director Swati Dave and former Telstra boss David Thodey.

Ms Bullock will also chair the governance board, serving alongside Mr Hauser and RBA chief ­operating officer Susan Woods.

Unveiling his picks, Dr Chalmers stressed the government had conducted “a very robust and very consultative” appointment process. “These are high-quality, high-calibre people and together they represent the best mix of relevant skills and abilities and experience,” he told reporters.

“I wanted to thank all of the members of the current board for their work but also for agreeing to continue to serve on one of the two new boards.”

Meanwhile, Ms Bullock welcomed the appointments of Professor Fry-McKibbin and Ms Baker, saying she looked forward to working with the pair.

“Their expertise and insights will be vital as we continue our ­efforts to bring inflation back to target,” the governor said.

RBC Capital Markets chief economist Su-Lin Ong said both Professor Fry-McKibbin and Ms Baker were largely unknown to investors. “The new board and its operation will add some uncertainty to the RBA’s reaction function in 2025 at a time when a change in the policy stance is expected and there is already uncertainty over the timing and magnitude of a likely easing cycle,” she said.

The new appointments to the RBA board come after Dr Chalmers secured the passage of landmark reforms to the central bank through the federal parliament, relying on support from the Greens and Senate crossbenchers after the Coalition in September opposed Labor’s changes. While the Coalition had initially offered its support for the review’s findings, it later grew wary that Labor could “sack and stack” the proposed specialist rate-setting board, a fear that was fuelled by Labor’s appointment of Ms Rubin and Dr Ross, both ex-union officials, to the current board.

RBA governor Michele Bullock. Picture: Jeremy Piper/NewsWire

In an attempt to ease Coalition concerns, Dr Chalmers agreed to automatically transfer all six external members of the ­current board to the new monetary policy committee unless they expressed a desire to sit instead on a separate governance board.

However, after Dr Chalmers accused the RBA of “smashing the economy” via its aggressive run of rate hikes, opposition Treasury spokesman Angus Taylor relinquished the Coalition’s support.

On Monday, Mr Taylor accused Labor of failing to take the consultation over the new board appointments “seriously”.