Chalmers ‘not especially surprised’ with Lowe’s rejection of

Treasurer Jim Chalmers revealed he was not surprised to see Reserve Bank of Australia Governor Philip Lowe defend his board after criticisms arose from a landmark review.

A review titled ‘An RBA fit for the future’ was established for the first time since the 1980s, following complaints of the bank’s harsh consecutive rate rises. 

The report released on Thursday provided 51 recommendations, which the Albanese government confirmed it will support.

Upon findings from the review, Mr Lowe defended his team, saying the characterisation of board meetings in the central bank review were “very far from the reality that I have lived as the governor”.

“The idea that the board members sit there meekly and accept the recommendation that I put to them is very far from the reality that I have lived as the Governor,” he said.

“I have defended the board in the past because I think it has worked very effectively, and people take their jobs incredibly seriously.

“We don’t always get it right, but we always try and do the right thing by the Australian people, and I take great comfort from that.”

Mr Chalmers later the same night said he was not surprised that Mr Lowe had knocked back criticism but was coy in answering whether that rejection was correct.

“I’m not especially surprised that Phil, being the person that he is, is defending his colleagues on the board,” he told the ABC.

“What I will say is I think that the analysis of the review panel is well-founded. And they relied on more than 1,500 people providing input. They worked on this for months.”

The Treasurer said it was also not surprising that Mr Lowe had a different view of his performance, than what was revealed in the review.

“I don’t think it’s especially surprising that Governor Phil Lowe has a different view about the performance of his and, indeed, his own performance,” he said.

“It’s not easy for a leader of an organisation which has been, in our history, really quite well-regarded and really quite successful.”

Earlier on Thursday, Mr Chalmers revealed the Reserve Bank’s major overhaul would make it “more effective, more transparent and more independent”.

“We want to make sure that Australia’s monetary policy framework delivers the right decisions and make the right calls for the Australian economy and for the Australian people,” he said.

One of most significant changes included stripping the RBA board of the ability to set cash rates and turning that power over to a new independent board of monetary policy experts.  

‘Big change’: RBA to adjudge full employment following Chalmers’ RBA overhaul

The board will move from setting rates from every four weeks to every six weeks and will have to front the media after each change to explain its decision-making.  

Several of the proposals will be backed by legislation, while others will be left for the RBA to enforce with help from the Council of Financial Regulators.

The changes recommended from the review are expected to come into effect from July of 2024.

A full list of the recommendations can be read here.

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