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The Australian Greens Party have called on the Treasurer to enact a power that has never been used before that would see the Reserve Bank of Australia’s (RBA) decision to set the cash rate at 4.35 per cent be undone.
Greens economic justice spokesperson, senator Nick McKim, said that section 11 of the RBA Act gives the Treasurer the ability to “intervene to override the Reserve Bank when necessary”, stating that interest rates continue to “smash mortgage holders and renters across Australia”.
“Dr Chalmers should use that power now to reduce interest rates and retain it so it can be used in the future,” Senator McKim said.
“High interest rates are crushing mortgage holders and renters. Jim Chalmers needs to step in now to give them relief.
“According to Jim Chalmers himself, the Reserve Bank has smashed the economy. Dr Chalmers has the power to reduce interest rates, and he must act before more damage is done.”
This comes after RBA reforms were stymied by the Coalition and shadow treasurer Angus Taylor, who opposed a bill that would have the RBA divided into two separate boards, one for monetary policy and one for other governance, on 10 September.
Senator McKim suggested that the Greens were ready to “engage in good faith” with Chalmers should he enact section 11 of the RBA Act.
McKim said: “We are very motivated to see Section 11 of the RBA Act and Section 36 of the Banking Act retained.
“While the Greens are willing to work with the Treasurer, it’s crucial for the power of a democratically elected government to override decisions of the RBA to be maintained.
“Removing democratic oversight over the RBA would be Labor’s final capitulation to the power of capital, and to the neoliberal agenda.”
The Treasurer hit back at Taylor during a press conference in Canberra on 10 September, saying that the reforms were about making the RBA “more independent, not less independent”.
“The position that the Coalition has taken shows that it has absolutely no idea and absolutely no economic credibility. I tried to take the Shadow Treasurer seriously, even though nobody else appears to. We have always been hostage to the Shadow Treasurer’s ability to carry an argument internally,” Treasurer Chalmers said.
According to the Treasurer, he had met with Taylor three times since April 2023 and that he had accommodated the shadow treasurer on six issues that were raised.
Those issues raised by Taylor included that the chair of the governance board be the RBA governor, flexibility in term limits, the retention of section 11, and that all current members of the RBA board should be moved to the monetary policy board unless they do not wish to do so.
“I have accommodated the Shadow Treasurer on all six of the issues that he raised in the consultation on this really important legislation,” Treasurer Chalmers said.
“I dealt with him in good faith for the best part of a couple of years. I did genuinely put a premium on bipartisanship, but there’s only so much that you can do. I’d even started to consult him on possible appointments to the boards, so he knows that I have absolutely no intention of making political appointments to these boards.”
He went on to label the actions of the Coalition and Taylor as “irresponsible”, “disappointing”, but “not surprising”.
“They are always looking for unnecessary conflict despite our best efforts to land a bipartisan outcome. Obviously, we’ll now consider the next steps and we’ll make those next steps clear in time,” he said.
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