The long-awaited independent assessment of the Reserve Bank commissioned by Treasurer Jim Chalmers will be released on Thursday, with the Treasurer already saying that he agrees in principle with all of his recommendations.
These include separating monetary policy decisions from other decisions by establishing a separate Monetary Policy Board and Governance Board, with the aim of making both decision-making and governance arrangements as effective as possible.
Asked to examine the continued appropriateness of the Reserve Bank’s inflation-targeting framework, the review has apparently won approval, with the Treasurer expected to say Thursday that he reaffirms the government’s commitment to both the Reserve Bank’s independence and its inflation-targeting framework .
Titled “An RBA ready for the future”, the report makes 51 recommendations under 14 broader headings.
The review was conducted by Carolyn Wilkins, an international expert on monetary policy, Renée McKibbin, a professor of economics at the Australian National University, and Gordon de Brouwer, Secretary for Public Sector Reform.
Read more: The RBA’s failure to cut rates faster may have cost 270,000 jobs
Among the issues considered in the assessment include how to improve the bank’s approach to monetary policy, decision-making, its performance against its objectives, how well it explains its decisions, and the composition of its board. improved.
Chalmers will announce two new RBA board members on Thursday, replacing retiring members Wendy Craik and Mark Barnaba.
Some of the recommendations from the study will be implemented by the bank itself.
Others will need legislation, work with the Board of Financial Regulators, or agree on a new one Statement on conducting monetary policy to be signed by Chalmers on behalf of the Government and Governor Philip Lowe on behalf of the Reserve Bank Board.
Chalmers has stressed the need for bipartisan support for the changes, given the bank’s independence and its importance in Australia’s economic policymaking.
He discussed the report with shadow treasurer Angus Taylor and provided him with a copy in advance. Taylor was briefed by the panel during the investigation.
Chalmers this week praised Taylor for the way he handled the review.
Calling for bipartisanship, Chalmers told a news conference Monday:
We don’t really want to take up the gauntlet in the Senate, for example, on legislative changes to the RBA bill. The RBA bill should be something we can agree on and be placed outside of politics.
The review panel received more than 1,500 contributions through interviews, submissions, focus groups, and survey responses.
It consulted 137 global and domestic experts, including current and former RBA board members and staff, parliamentarians and academics. It also consulted representatives of business, trade unions, public institutions and civil society groups.
Read more: The RBA is not a law in itself – an outside review would do the trick
The bank and Lowe in particular have been criticized for the rise in interest rates.
Lowe is under fire for indicating that the cash rate was unlikely to rise before 2024, which influenced the decisions of some homebuyers.
Lowe’s term ends in September.