Governor Has Requested Continuity On New RBA Board

The senate is currently asking officials questions on the RBA review ahead of legislation being presented. The focus is on how board members will be appointed and if the central bank’s independence needs to be strengthened. Governor Bullock believes that the current level of independence is sufficient and that continuity on the Board is vital in the “new world”.

• Governor Bullock has emphasised to the Treasurer that the continuity between the old and new monetary policy boards is extremely important and he assured her that he understands and will provide continuity when making the appointments.
• The bill allows for current members to continue their terms on the new boards. They will be given the choice given their experience may mean they shift to one of the new boards, such as governance, and that there will be additional responsibilities. But all appointments will still be made by Treasurer Chalmers.
• Bullock said that there are always interpretation risks and so that is a possibility when Board members make their legislated one appearance per year, but she said that the meeting statement is now from the Board and so members will talk to that statement.
• The RBA review has recommended the removal of section 11 of the RBA Act that allows the Treasurer to override a decision if the RBA and government can’t resolve their differences. This provision has never been used.
• The arguments for s.11’s removal include shifting Australia’s central bank in line with international best practice, and to strengthen and “future proof” its independence. It would also lift the bar for the government to intervene as parliament would have to legislate rather than just a government override. Bullock has said she is “agnostic” on whether it is removed and can work with whatever the government decides.