Treasurer Jim Chalmers has hit back at Peter Costello over his scepticism of the government’s RBA overhaul, claiming the former liberal treasurer was “factually wrong” in his take-down.
Dr Chalmers spoke out after Mr Costello penned a scathing review of the government’s shake-up of the central bank in The Australian which declared “there was no reason to leap into a new system that was untested and uncertain”.
Responding to the Nine chairman’s claims, the Treasurer said his decision to support splitting its board in two and bringing in more external experts to help make rates decisions was nothing out of the ordinary.
“He’s made a couple of comments I don’t agree with and that’s because of couple of the comments are factually wrong,” Dr Chalmers told Today.
“He’s talking about a change to the make-up of the decision-making board, and how many external members are on there.
“There are six on there right now, there will be six after. It is not an especially radical change.”
Dr Chalmers’s committed, in principle, to adopting the majority of the 51 recommendations made by an independent review of the RBA, which was triggered by calls for greater transparency around its calls to raise interest rates a consecutive 14 times since 2021.
Critics of the sweeping reforms including former RBA governor Ian Macfarlane and Mr Costello who have argued a restructure would weaken Australia’s inflation target.
Hitting back at his sceptics, the Treasurer argued a board change-up would “strengthen” the way the central bank makes decisions and help to hold it accountable. He said that legislation would help to clear up questions about the relationship between the two new boards.
“The monetary policy board is to take decisions about interest rates. This is not uncommon around the world,” Dr Chalmers told ABC RN.
“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 and the right kind of support.”
The Treasurer’s comments after the latest inflation figures, released yesterday, showed that the consumer price index for August came in at an annual rate of 5.2 per cent, up from 4.9 per cent in July.
This has seen fuel prices hit record highs across the country with retailers in major cities like Brisbane charging up to $2.37 a litre, according to the Australasian Convenience and Petroleum Marketers Association.
Mr Chalmers said the government was not considering another intervention to lower petrol prices, but acknowledged people were struggling under cost-of-living pressures.
“It’s not something that we are currently contemplating, and one of the reasons for that is we’ve got a much better way of providing cost-of-living relief for people,” Mr Chalmers told ABC.
“We’re doing that in a way that takes some of the edge off inflation rather than adding to it.”