Treasurer Jim Chalmers has responded to rumors of tension between him and outgoing Reserve Bank Governor Philip Lowe as the couple travel to India on Sunday.
Dr. Chalmers announced Friday that Dr. Lowe will not be reappointed to his post as public anger over 12 rate hikes since May 2022 sealed his fate.
Instead, when his term ends in September, he will be succeeded by his current deputy, Michele Bullock, who will become the Reserve Bank’s first female governor.
But the Treasurer and Dr Lowe will travel to India on Sunday for a meeting of world finance ministers, a trip that many believe will now be very tense.
But speaking on ABC insiders program, Dr. Chalmers said he had “a mountain of respect for Philip Lowe”. I’m serious. I’ve worked very closely with him… for a long time.
Federal Treasurer Jim Chalmers (pictured with his wife Laura) has responded to rumors that there is “uncomfortable” tension between him and outgoing Reserve Bank Governor Philip Lowe.
The Treasurer said he had no fear that the journey would now be uncomfortable and that Dr. Lowe “has conducted himself with characteristic dignity and professionalism at all times.
“Including, by the way, saying that the appointment of Michele Bullock was a first-rate appointment,” he said.
Dr. Chalmers said Dr. Lowe had the government’s respect and gratitude for his work and praised the governor’s reaction to the news.
“He is behaving in an impeccable, dignified manner,” he said. ‘We work very well together… We are professionals.
‘I have great respect for him and he is highly respected internationally.
“We chose Michelle Bullock to run the bank, but that in no way diminishes the dedication of Philip Lowe.”
Insiders host David Speers questioned whether Dr. Chalmers respected Dr. Lowe’s interest rate decisions, after he raised them 12 times in the last 13 months.
The cash rate was held on hold at an 11-year high of 4.1 percent, following the July board meeting over the school vacation.
The decision marked only the second monthly pause since April, with interest rates rising from May 2022 at the most aggressive pace since 1989.
“People under pressure want to understand why these decisions are being made,” Chalmers said.
‘I know that my responsibility is to explain and sometimes defend the decisions I make in the context of the government’s economic plan and the budgets I submit.’
Reserve Bank Governor Philip Lowe (pictured) will travel to India, along with Treasurer Jim Chalmers, on Sunday for an economic summit.
The Reserve Bank has halted rate hikes for the second time this year, but the relief is likely to be short-lived
Speers interrupted to suggest that the Treasurer was not defending the Reserve Bank.
“The Reserve Bank has an important role in explaining the decisions it makes,” said Dr. Chalmers.
I don’t think it’s a particularly controversial point.
Dr. Lowe is the first RBA Governor in nearly 30 years not to have extended his initial seven-year term by three years.
As head of the Fed, he faced intense scrutiny last year, particularly from homeowners who have been hit by 12 interest rate hikes since May 2022.
Those increases came after Dr. Lowe infamously promised that interest rates wouldn’t go up until at least 2024.
His two predecessors, Glenn Stevens and Robert Macfarlane, had their terms extended to 10 years.
Bullock, who will become the RBA’s ninth governor, will begin her seven-year term on September 18.
Dr Chalmers said the decision not to extend Dr Lowe’s term ‘is more about the future than the recent past.
“I think Michele Bullock, as the outgoing governor has said, is a top-notch appointment.”
Prime Minister Anthony Albanese (left) is pictured with incoming Reserve Bank Governor Michelle Bullock (center) and Treasurer Jim Chalmers (right)
Increase in annual payments even though rates remain on hold
$500,000: Up to $14,628
$600,000: Up to $17,556
$700,000: Up to $20,472
$800,000: Up to $23,412
$900,000: Up to $26,340
$1,000,000: Up to $29,268
Monthly repayments are based on a variable Commonwealth Bank loan for a borrower with a 20 percent deposit that increases from 2.29 percent to 6.44 percent to reflect the Reserve Bank’s cash rate increase Australia from 0.1 percent to 4.1 percent.