Government Seeks Bipartisan Backing for RBA Reform Amid Concerns of Board Manipulation

Treasurer Jim Chalmers has indicated a willingness to make adjustments to the reform of the Reserve Bank of Australia (RBA) to facilitate its smooth passage through Parliament.

The proposed legislation aims to create two separate RBA boards: one responsible for interest rate decisions and the other for corporate governance.

Members of the interest rate board will have an expanded role, including regular discussions to explain their decisions.

Additionally, there will be new selection criteria focusing on a diverse range of expertise, as identified in a previous review of the current structure.

The government is open to restricting Parliament’s ability to intervene in RBA emergencies, offering current RBA board members positions on the newly formed Monetary Policy Board, and ensuring continuity across both the Monetary and Governance Boards.

Concerns have been raised by the opposition about the potential for the government to appoint preferred individuals to the two new RBA boards.

“The transition of the existing RBA board…has been a consistent topic of discussion with the treasurer and his office since our initial meeting,” Taylor stated.

“It is imperative that the treasurer does not have the authority to stack the board with his associates.”

Chalmers defended the proposed changes, noting three in-person meetings with Shadow Treasurer Angus Taylor to discuss the revisions.

“We have also corresponded through letters to ensure that the central bank of this nation remains free from political influence,” he emphasized.

“My objective is to pass these changes into law before the year’s end so that they can be implemented at the start of next year. This process has already been prolonged, and we are eager to take action.”

Chalmers mentioned that the current Reserve Bank governor supports the proposed modifications.