“I’ve known Phil Lowe for some time,someone I’ve worked relatively closely with. I don’t think it’s helpful to associate some of the difficult decisions that the Reserve Bank has to make,to over-personalise them,” he said.
Shadow treasurer Angus Taylor said it was the government’s failings contributing to the problems facing the Reserve Bank.
“We have an independent reserve bank. They don’t always get everything right,” he said.
Treasurer Jim Chalmers says attacks on the RBA should be less personal.Credit:Alex Ellinghausen
“Philip Lowe has been very clear about that himself but that they’ve made errors. There’s no doubt about that. But pointing the finger at the Reserve Bank when what we need is the government to act is the wrong way to go about it.”
Lowe will deliver the annual Anika Foundation address in Sydney on Thursday,where he will speak about inflation and interest rate settings to deal with it.
Chalmers appointed former Bank of Canada senior deputy governor Carolyn Wilkins,interim director of the Crawford School at the Australian National University Renee Fry-McKibbin and secretary for public sector reform Gordon de Brouwer to the review that is due to report back by March next year.
The treasurer has met the panel,which has also held separate meetings in Sydney and Melbourne. The panel has held talks with former and current RBA staff,government agencies,business representatives,unions and foreign central banks.
Discussions so far have canvassed the make-up of the board,which unlike other central banks across the world is made up of lay people,usually from the business community. The last union member on the board was Bill Kelty in 1996.
There has been criticism on the way the board is appointed,the pool from which it is chosen and its ability to push back against the executive members of the Reserve Bank.
There has also been concerns about the bank’s handling of the COVID-era policy of trying to target the interest rate on the Australian government three-year bond. In November,the bank ended its “yield curve control” policy in what a report by the RBA later described as “disorderly” and led to “some dislocation” in the local bond market.
Loading
Some private sector economists said they had “lost confidence” in the bank’s management due to the problems around the end of yield curve control.
The bank’s 2-3 per cent inflation target,the bank’s objectives and the RBA Act (which dates from 1959) have all been open for discussion.
Full employment,which dominated last week’s jobs and skills summit,is expected to be a key talking point of the panel,as this is one of the Reserve Bank’s three key objectives.
That is likely to feature in an issues paper that is close to be being released. The panel will then start taking public submissions.
Chalmers said a strong central bank was critical to a strong Australian economy.
“I’ve had a very productive discussion with the panel already about their key areas of focus,and I’m heartened to see that they are engaging with a diverse range of Australians,” he said.
Cut through the noise of federal politics with news,views and expert analysis from Jacqueline Maley.Subscribers can sign up to our weekly Inside Politics newsletter here.