(Bloomberg) -- Australian Treasurer Jim Chalmers described as “bizarre and wrong” claims that a planned overhaul of the Reserve Bank represents a radical reshaping of the institution, saying its board structure will remain essentially the same as it has for the past 60 years.
“What we’re seeing here is unfortunate,” Chalmers told Australian Broadcasting Corp. radio on Thursday. “It is bizarre and wrong to suggest that somehow there’s some kind of radical change being proposed here. There are six external members right now on the decision-making board, there’ll be six external members afterwards. That won’t change.”
While the proposed RBA structure is similar, the six independent board members will now be given voting rights, raising concerns that they could outvote Governor Michele Bullock and her deputy on interest-rate decisions. They’re also expected to speak publicly, opening up the possibility of confusing the policy message if there are differences.
Earlier this week, former RBA Governor Ian Macfarlane said the planned overhaul will put the central bank’s future at “huge risk,” while former Treasurer Peter Costello, Australia’s longest-serving treasurer from 1996-2007, also weighed in on the argument, saying on Thursday the changes run the risk of undermining monetary policy.
The revamp, which follows an independent review of the RBA, is pending legislative changes for which there is bipartisan support so far. The review also recommended fewer rate meetings, regular press conferences and a separate governance board among other changes.
“What we’ve tried to do with the review, is to strengthen the way that the board comes to these decisions, make it accountable, make sure there’s the right combination of expertise, the right kind of support to external board members,” Chalmers said.
©2023 Bloomberg L.P.