By Rachel Clun and Shane Wright
Michele Bullock will become the first woman to ever lead the Reserve Bank of Australia, after Treasurer Jim Chalmers confirmed RBA governor Philip Lowe would not be reappointed to the role.
Bullock will start helming the central bank at a time of major economic and organisational upheaval, as the RBA continues its fight to lower inflation while also undergoing significant structural changes.
Philip Lowe’s successor, Michele Bullock.Credit: AAP
Prime Minister Anthony Albanese said Bullock would be taking over the top job at a difficult time for the Australian economy and globally, but she was “eminently qualified” to handle it.
“Michele’s will be an important job at an important time,” Albanese said.
Cabinet met on Friday morning to confirm Treasurer Jim Chalmer’s decision on Lowe’s future and confirm Bullock as his replacement.
Chalmers said Bullock, who he described as a “first-class economist”, would take over as Reserve Bank governor from September 18.
“Michele Bullock is the person best placed to take the Reserve Bank into the future,” Chalmers said.
Bullock, who is currently the RBA deputy governor and has spent her entire near 40-year career with the central bank, said she was “deeply honoured” to have been appointed as governor.
“It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards,” she said.
“I am committed to ensuring that the Reserve Bank delivers on its policy and operational objectives for the benefit of the Australian people.”
Bullock will take over as the bank continues to work through the recommendations of the RBA review.
On Wednesday, outgoing governor Lowe unveiled major changes the bank has already decided to adopt, including reducing the number of board meetings from 11 to eight and holding media conferences after each interest rate decision.
The RBA has been under fire after Lowe told Australians in November 2021 that he did not expect interest rates to rise from historic lows during the COVID pandemic until at least 2024, only for the bank to start aggressively raising rates last May in a bid to combat rising inflation.
Chalmers said Bullock had made it “very clear” she was eager to implement the review’s recommendations in the best possible way.
“The fact that Michele Bullock brings that experience and expertise, but also that heft and gravitas will be a really important asset when it comes to the relationship with the various RBA boards and when it comes to bedding down and implementing the review, I think she’s got the best possible combination of attributes to help us do that,” he said.
On Friday, Lowe has described his successor as a “first-rate appointment”.
“I congratulate Michele on being appointed governor,” Lowe said in a statement published by the Reserve Bank.
Lowe will continue in his position until the end of his term on September 17. The position of deputy governor from September 18 will be filled by the Treasurer at a later date.
Bullock was not the only person in the running for the role of governor. Treasury secretary Steven Kennedy and finance secretary Jenny Wilkinson were also considered, as was the prospect of extending Lowe’s term.
Chalmers pointed out that extending a governor’s term was the exception, not the rule, with three of the eight previous governors staying on beyond their initial term.
The treasurer said it had not been an easy decision, but it had been his view for some time that Bullock was the best person for the job.
“This is the right call, but it’s not an easy call,” he said.
“I just became more convinced that we’ve got a really good opportunity here to appoint a first-class economist who also has remarkable leadership attributes and so over time, I became more convinced that this was the right appointment.”
Chalmers confirmed he had consulted with shadow treasurer Angus Taylor as part of his search for a new governor, and he expected the opposition to work constructively on the RBA’s future.
“The best outcome from the country’s point of view, not just from the government’s point of view, is to get bipartisan agreement on an appointment that will outlive any government,” he said.
Taylor has congratulated Michele Bullock on her appointment as the 9th governor of the Reserve Bank, and thanked outgoing governor Philip Lowe for his service.
“Dr Lowe has been an independent, distinguished, and dedicated Governor who has helped to steer Australia through some of our biggest economic challenges,” he said.
“Michele Bullock is a highly capable economist, with qualifications from the London School of Economics and University of New England, who has served the Reserve Bank with distinction for 38 years.”
Taylor said a change in governor did not take away from the fact Labor needed to do more to combat high inflation and cost of living pressures.
On Thursday, Opposition Leader Peter Dutton warned he would not support any appointment “tainted” by close government connections, suggesting he would not have endorsed Kennedy or Wilkinson in the role.
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