Treasury advertises for new RBA board members

Treasury advertising for ‘several’ new positions on the Reserve Bank’s proposed monetary policy committee sparks Coalition accusations Jim Chalmers plans to ‘stack the board with mates’.

Jim Chalmers has accused his opposition counterpart, Angus Taylor, of “playing politics” with the RBA reforms. Picture: NCA NewsWire/Martin Ollman

The prospect of bipartisan support for the federal government’s revamp of the RBA has diminished, after the Coalition criticised Jim Chalmers for advertising for “several” positions on the proposed interest rates-setting board.

The decision to kickstart the application process for up to six new external members comes ahead of new governance arrangements that will start from July 1 – provided legislation passes through parliament.

The opposition insists the Bill should be amended so that existing board members are automatically transitioned to the key interest-rate setting committee.

While the Treasurer is not expecting wholesale change, there is an assumption some members of the existing board without specialist skills, or who are unprepared for a more demanding role in interrogating the central bank’s economists, will choose either to step down, or move on to the governance board.

A spokesman said Dr Chalmers had always sought bipartisanship and that the RBA reforms should be “above politics”.

“We’re following through with the RBA review recommendation to make the appointment of board members more transparent and open through an expression of interest process,” he said.

“It’s prudent that we do this given the opposition only wants to play politics and hasn’t come to a coherent, considered position on the RBA reforms despite months of consultation.”

But the government’s hopes for bipartisan support appear in tatters, with opposition Treasury spokesman Angus Taylor accusing Dr Chalmers of “plans to stack the board with his mates”.

“He (the Treasurer) claims he wants to work in a bipartisan fashion and there’s nothing bipartisan about this – it is incredibly presumptuous to advertise board positions before the legislation has even been debated in parliament,” Mr Taylor said.

The Reserve Bank of Australia in Sydney. Picture: NCA NewsWire

“The next board member isn’t due for appointment until 2025 – the Treasurer is about two years ahead of time. While a more transparent and open appointment process was a recommendation of the review, it is incredibly premature of the government to advertise board positions before the legislation has even passed the parliament.”

Changes to the Reserve Bank Act recommended by last year’s independent review will abolish the existing board from July 1, and create two new boards – a monetary policy committee responsible for setting interest rates, and a governance board.

Under the proposed legislation, Dr Chalmers will technically have to appoint six external members to sit on the new monetary policy board from July 1.

Treasury’s position description, released on Friday, demands at least two of the six external members “collectively” have expertise in macroeconomics, monetary economics, labour economics, and “the modelling, analysis and forecasting of macroeconomic data”. Applicants must have “significant” expertise, through practical experience or formal qualifications, in at least one of the areas of economics, the financial system, or in “industry and the business environment in Australia”.

RBA governor Michele Bullock recently said it was “very important that we have some continuity of membership on the monetary policy board”, and Dr Chalmers had “assured me that he understands”.