The independent review of the Reserve Bank of Australia (RBA) is slated to report to the federal government in mid-2023.
Treasurer Jim Chalmers has indicated that the size and composition of the RBA’s board are among the issues that will be considered. He also says the government wants the board to be comprised of people representing all parts of Australia and all parts of the economy.
The RBA board is currently dominated by people from the business sector, but there have been calls for it to include more economists. ACTU secretary Sally McManus has also advocated having a union representative on the board for the first time since Bill Kelty was on the board in the 1990s.
From The AFR:
“We want the Reserve Bank board to be comprised of people representing all parts of the country and all parts of the economy,” Dr Chalmers said on Sunday.
“But to also make sure that the right voices are represented around the table, that the board is of the right composition and the right size”…
The current nine-member board has five business people including Carol Schwartz, company director and former investment banker Carolyn Hewson (who is also an economist), former Graincorp and Coca-Cola Amatil CEO Alison Watkins, Mr Barnaba and Ms Craik.
Other members include Dr Lowe, Ms Bullock, Treasury Secretary Steven Kennedy and economist Ian Harper, a former head of the Fair Pay Commission appointed by the Coalition government…
There have been calls for the appointment of more professional economists who have the technical understanding of monetary policy to intellectually challenge Dr Lowe and deputy governor Michele Bullock…
Australian Workers’ Union National Secretary Daniel Walton, said: “There should absolutely be a workers’ representative on the RBA board, because diversity of experience delivers value to boards. As industry superannuation funds have shown, boards with workers representatives tend to outperform boards without such representatives.”
Having a union representative on the RBA Board makes total sense. The RBA’s business-dominated board, alongside its business liaison program, has delivered never-ending wrong wage forecasts:
RBA wage growth forecasts always too bullish.
Having union representation on both the RBA board and the liaison program would provide the RBA with balance and likely improve its functioning.
Having our central bank captured by the business lobby is not in the national interest. The RBA’s poor track record is living proof.
