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Review panel pledges to revitalise RBA

An independent panel set up to examine the Reserve Bank of Australia says it will make recommendations to “revitalise” the central bank.

November 24, 2022
By Paul Osborne
24 November 2022

The federal government will be given a list of ways the Reserve Bank of Australia can be “revitalised”, the panel set up to review it says.

The review panel – comprising Professor Renee Fry‑McKibbin, Professor Carolyn Wilkins and Dr Gordon de Brouwer – provided an update to a CEDA event in Sydney on Thursday.

“The panel is confident it is collecting the breadth and depth of opinion it needs, to provide government with recommendations to revitalise the RBA and prepare it for the years ahead,” they said in a statement.

The panel has received over 114 submissions, conducted a dozen focus groups, interviewed more than 230 people and surveyed almost 1100 current and former RBA staff.

A number of themes are emerging.

“On monetary policy frameworks, the panel has heard deep support for monetary policy to continue to be conducted by an independent central bank,” they said.

“There has been general, but not universal, support for a flexible inflation targeting framework, which is seen to have contributed to strong economic outcomes over the last 30 years.

“Several suggestions have been put to the panel for how to specify that framework more clearly.”

The panel has heard criticism of how the RBA had communicated to the public in recent years, including how it had wrongly said interest rates could stay at record lows until 2024.

There have been seven cash rate hikes from May to November, with another expected in December.

On governance, the panel has heard suggestions for ways to increase the clarity of the board’s role and strengthen its accountability and composition.

The final review report – the first in more than 30 years – is due to go to Treasurer Jim Chalmers in March.

Dr Chalmers said he was pleased to see the high level of engagement with the review.

“By drawing on such a diverse range of viewpoints and expertise through the review, we’ll be able to ensure Australia’s central bank and monetary policy arrangements are strong and effective into the future,” he said.

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