Treasurer Jim Chalmers has hailed incoming Reserve Bank Governor Michele Bullock while he defended the government’s approach to economic management and providing cost of living relief.
Speaking to The Conversation podcast on Friday after news of the announcement broke, the Treasurer said he was “proud” to appoint Ms Bullock as Governor as he talked up what she will bring to the role.
“Michele Bullock is a terrific economist but also a really accomplished and respected leader,” he said.
“Her appointment really is the best combination of experience and expertise as well as a fresh leadership perspective at the bank.
“It’s also an historic appointment – the first woman ever to lead the Reserve Bank in its 63-year history.
“The Government is really proud to appoint her.”
A major focus for the incoming Governor will be overseeing the implementation of the government’s review into the RBA, which will overhaul the way it conducts its operations going forward.
The review made 51 recommendations including establishing a new monetary policy board – staffed by specialists in economics, finance and labour markets – to make decisions on interest rates, cutting the number of meetings the bank holds from 11 to eight and having representatives hold more press conferences to explain its actions to the public.
Outgoing Governor Philip Lowe told an event on Wednesday that he had begun adopting some of the proposed changes, but that it would be the responsibility of his successor to oversee the more major reforms in February.
On Friday, Mr Chalmers revealed that this was a key reason he had selected Ms Bullock to take over the reins, saying her hands on experience in working on the review would help “bed down” the changes once she assumed control in September.
“Michele Bullock will bring a fresh leadership perspective to the governorship of the Reserve Bank, but also and maybe this isn’t obvious to everyone but also Michele has played a really thoughtful and considerate and constructive role in the Reserve Bank Review itself,” he said.
“As I’ve come to work with her and know her well, I’m really confident that one of the best things about this appointment is the way that her gravitas, her heft, her relationship with the board, her relationship with the broader economic community will help us bed down and implement the recommendations of that really important review.
“That was a big part of our considerations in naming her today and asking the Cabinet to agree to her appointment.”
The Treasurer also batted away suggestions that the RBA would change its approach under Ms Bullock’s leadership, saying he expected the bank to continue operating independently and that he would never “second guess” their decisions.
“I cherish the independence of the Reserve Bank and everything I’ve tried to do with this RBA Review and even this appointment is to invest in the independence of the bank rather than undermine it,” he said.
“So this decision to appoint Michele Bullock is not about any one monetary policy decision or another.
“I still don’t pre-empt or second guess decisions taken independently by the Reserve Bank.
“They will make their decisions independently.”
Turning to the state of the economy, Mr Chalmers said he was “encouraged” by lower inflation numbers coming out of the United States, but again suggested “global uncertainty” presented a risk to Australia’s outlook.
He acknowledged the economy was “slowing”, but doubled down on statements made earlier this week that the government had already done enough to provide relief for households struggling under cost of living pressures.
“This has been a frustration of mine – the commentary has made it sound like you can be responsible economic managers or you can help people through tough times,” he said.
“What we’ve shown as a government, and we’re proud of this, we’ve been able to dramatically improve the budget position at the same time as we provide cost-of-living help.
“So what we’re focused on is not new cost-of-living measures.
“We’re not working up new cost-of-living measures. We’re rolling out what we’ve announced over the course of the last two budgets, but a much stronger budget makes us more resilient to some of these global uncertainties that we’ve been talking about.”
The Treasurer has faced criticism from unions and lobby groups over his refusal to use a surprise surplus to fund more relief for Australians, particularly those on lower incomes.
However, he has continued to maintain his focus is instead on repairing the Budget’s bottom line, referencing “structural” problems which need to be resolved for the nation’s long-term health.
In a rare show of bipartisanship, Liberal Senator Jane Hume on Wednesday praised Mr Chalmers for his “discipline,” saying the Treasurer was “moving in the right direction” with his fiscal policy.
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