A Monash Expert is available to comment on the ongoing debate regarding the RBA's independence, its accountability to government and determining who ultimately is responsible for economic and financial problems.
Dr Steve Kourabas, Deputy Director, Centre for Commercial Law & Regulatory Studies, Faculty of Law, Monash University
Contact: +61 3 9903 4840 or media@monash.edu
The following can be attributed to Dr Kourabas:
“There has been some dissatisfaction with the RBA's governance (arising out of criticism regarding interest rate changes), its performance on matters of monetary policy, and how it communicates its decisions. However, simply replacing the Governor of the RBA won't necessarily resolve the problems our economy is currently facing.
“The real issue regarding the Governor's reappointment relates to the ongoing debate regarding the RBA's independence, its accountability to government and determining who ultimately is responsible for economic and financial problems. This debate has resulted in the review of the RBA and its governance framework, including recommendation for the creation of a Monetary Policy Board within the RBA and changes to the RBA's governance arrangements.
“A decision to replace the Governor would be a reflection of this broader debate but will not necessarily end the cycle of interest rate increases if the RBA continues to think that this is necessary. Further, replacing the Governor may not really resolve the financial and economic problems that Australia is currently facing if we do not also consider broader government and industry policy and actions.
“The real questions that appear to underpin this debate regarding the Governor's reappointment relate to the independence of the RBA from government, the RBA's accountability to government and determining who ultimately is responsible for economic and financial problems.
“To the extent that the recent government review of the RBA is believed to adequately address concerns regarding the RBA's governance and monetary policy decision-making processes, then the government may be justified in reappointing Governor Lowe.
“If the government decides not to reappoint Governor Lowe, it would need to provide a clear justification that goes beyond its disagreement with the RBA's monetary policy decisions and problems which its review sought to address. If the government fails to do this, then it may raise important questions regarding the ability of the RBA to function independently of government interference.”
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