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‘Big call’: Chalmers discusses RBA governor decision

4 minute read

The Treasurer has stressed the importance of naming the next Reserve Bank governor.

Treasurer Jim Chalmers has described the selection of the next governor of the Reserve Bank of Australia (RBA) as “one of the biggest appointments that the government will make”.

Speaking at a press conference in Melbourne on Wednesday, Dr Chalmers confirmed that he would be taking his recommendation for the key central bank appointment to cabinet “soon” but refused to “front-run or pre-empt” the timing or nature of this discussion with his colleagues.

“This is a decision for the cabinet to take on my recommendation and I take the role of the cabinet and the opinions of my colleagues very seriously,” the Treasurer said.

“It’s a big job and it’s a big call. I’m approaching it in a methodical, and measured, and considered, and consultative way, which befits the magnitude of the decision that the government will take about the governor of the Reserve Bank.”

Current RBA governor Philip Lowe, who on Wednesday confirmed a series of changes to the bank’s monetary policy processes and communication, also reiterated that he would be happy to remain in the role during a business lunch hosted by the Economic Society of Australia.

“I’ve said before, if I was asked to continue in the role, I would be honoured to do that and I would continue,” Dr Lowe said on Wednesday.

“If I’m not asked to continue in the role, I’ll do my best to support my successor. And the Treasurer said that he’ll make an announcement before the end of this month. So I haven’t got anything more to add on that.”

The Treasurer has been involved in “preliminary discussions” with the opposition regarding the RBA governor appointment, including with shadow treasurer Angus Taylor.

“I’m not obligated to consult with the opposition on the appointment of the Reserve Bank governor – not under the existing arrangements and not under the arrangements proposed by the Reserve Bank review,” Dr Chalmers said.

“But I want to be consistent with the spirit of the RBA review and that’s why I have provided an opportunity for the opposition to feed in their views. I will take them seriously. We’ve had one preliminary conversation and I’m up for another one if Angus or his colleagues would like to have one.”

According to Dr Chalmers, the government intends to appoint an individual who has “the necessary experience and expertise and who can help bed down the recommendations of that really important Reserve Bank review”.

“Our interest here is in ensuring we get the best possible central bank to take the country forward at a really uncertain time for the global economy, in particular, and at a time when people are under the pump,” he added.

Earlier on Wednesday, Dr Chalmers told ABC Radio that he and the shadow treasurer had discussed potential candidates for the governor role during their preliminary conversation.

Media reports have indicated that secretary of the Department of Finance Jenny Wilkson, deputy RBA governor Michelle Bullock, and secretary to the Treasury Steven Kennedy are among the individuals up for consideration.

“We’ve had a conversation about the various people that have been speculated on, including the incumbent governor Lowe himself,” the Treasurer confirmed.

“I’m not going to go through a list and say who is or isn’t on a shortlist for obvious reasons but there are a handful of people that have been speculated upon who of course would be qualified, but again, I don’t want to pre‑empt the conversation with my cabinet colleagues,” he added.

Dr Chalmers and Dr Lowe will both head to India next week for a meeting of the G20. According to the Treasurer, the meeting will provide an important opportunity to confer with counterparts and to take the temperature of the global economy at a “particularly uncertain time”.

“He and I will work closely together to represent Australia’s interests in that forum, and also to make our contribution to the big global conversation about how we safeguard our economies from inflation and some of the other difficult pressures that we are all confronting in one form or another around the world,” he said.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.