Australian Treasurer Jim Chalmers Considers Reforms to RBA

By Alasdair Pal

SYDNEY (Reuters) – Australia Treasurer Jim Chalmers stated on Friday his readiness to adjust some proposed reforms of the Reserve Bank of Australia (RBA) following objections from the opposition coalition led by the Liberal Party.

An independent review of the central bank last year suggested several recommendations, one of which included splitting the RBA board into two separate entities: one focusing on setting monetary policy and the other on operations.

The review proposed the establishment of a nine-member rate board with six external members. The opposition expressed concerns that this could enable the ruling Labor Party to appoint members who are aligned with the current government.

In response, Chalmers announced his willingness to transfer all six existing external members to the new rate-setting board unless they prefer otherwise, following discussions with Shadow Treasurer Angus Taylor.

Chalmers also indicated he would revise a proposal that would eliminate the government’s veto power over the RBA, allowing such action only during emergencies. “I want these changes to be above and beyond partisan politics. I want them to be bipartisan, and that’s what has driven me at every stage,” Chalmers stated during a press conference on Friday.

Chalmers mentioned that there were several other minor issues being addressed in collaboration with Taylor.

The RBA has already begun implementing some recommendations from the review, including decreasing the frequency of meetings while extending their duration and introducing a media conference after each decision. However, it has yet to decide on other issues, such as mandating regular appearances by all board members to discuss policy decisions.

Legislation concerning the composition of the RBA board was scheduled to take effect on July 1 but has faced delays due to lack of opposition support. Chalmers expressed hope to have the legislative changes passed by the end of the year, aiming for implementation early next year.