Treasurer’s ‘initial’ response to RBA review due in April

The findings of the wide-ranging review into the Reserve Bank (RBA) were handed over to Dr Chalmers on Friday (31 March).

The review, which was announced in July last year, was led by a panel of three independent experts including former senior deputy governor to the Bank of Canada, Carolyn Wilkins; Australian National University economics professor Renée Fry‑McKibbin; and eminent Australian economist Dr Gordon de Brouwer.

Speaking ahead of receiving the findings, Dr Chalmers said he was committed to releasing the report with “some” of his initial views by the May budget.

“I’d like to put it out in April and people can go through it and see what they think about it. It is about the structures, the processes, and the objectives of the Reserve Bank,” the Treasurer said.

Highlighting the critical importance of the decisions taken by the RBA, Dr Chalmers said “we need to give the RBA the best possible basis to make those decisions”.

He assessed that the review had yielded “bipartisan opportunity” to “build the respect and reputation” of the RBA.

“I’ve got my differences with Angus Taylor, but I do want to say that he has been engaging with this Reserve Bank review panel in good faith and I appreciate that because ideally, we would come at the recommendations when they’re available in a bipartisan way — this should be beyond politics, it should be about the best Reserve Bank that we can possibly have for our country, no matter who’s in government,” Dr Chalmers said, adding that he had reached out to Mr Taylor and the Coalition.

“When we see these recommendations, when they’re out there publicly, if there are some that require a change to the act that we’re keen on progressing, then ideally, we would do that in a bipartisan way.”

Dr Chalmers added that what the government wants to do is “make a meaningful change that lasts”.

“The best way to do that is to get some bipartisanship,” Dr Chalmers said.

Ultimately, he noted the government’s aim is to ensure “the respect and reputation” of the RBA.

“Over a long period of time, the Reserve Bank has been held in high esteem, particularly globally. But over a long period of time, people of distinction have served the bank and we want to build it up, we want to make it the best version of itself,” Dr Chalmers said.

Regarding the future of RBA governor Philip Lowe, whose term is set to expire in September, Dr Chalmers said that a decision would be made “closer to the middle of the year”.

“In the normal course of events, an appointment that comes up in September would be considered closer to the middle of the year. I’ll obviously consult with my cabinet colleagues, with the Prime Minister, with the economic team and more broadly as well,” Dr Chalmers said, adding that he would first take into consideration the RBA review.

Earlier this year, Mr Chalmers advocated the renovation of the central bank in an essay entitled “Capitalism after the crises”.