(Bloomberg) -- Australia’s government and opposition are in talks to try to break a deadlock over legislation that would split the Reserve Bank’s board into two new bodies, even as tensions persist over the composition of a monetary policy committee.
The new two board structure was originally intended to be in place by mid-2024, but seemingly intractable differences between the two sides of politics delayed passage of the bills. Indeed, the legislative part of the reforms that were recommended by a central bank review last year seemed all-but dead.
However, both the Labor government and Liberal-National opposition insist that plans to reform the RBA are still live, although questions remain over how directors of the monetary policy body will be selected.
“We’re really down to very limited issues, and it’s clear what they are,” Shadow Treasurer Angus Taylor said in an interview with Bloomberg. “It’s no closed book from us.”
Treasurer Jim Chalmers introduced the legislation in November, but it rapidly became stuck in the upper house as the opposition first shunted it to a Senate committee and then called for amendments.
Taylor wants current RBA board members to be transferred wholesale to the new monetary policy committee, accusing Chalmers of trying to “stack” the new body. The treasurer says current directors should have the option of joining either a new RBA governance board or the monetary committee.
Taylor said his stance on composition of the rate-setting body hasn’t changed.
“We won’t stand for a sack and stack strategy whereby the current board is all thrown off and then later the government stacks new board members on,” he said. “The ball is absolutely in the government’s court.”
However, the government has shown little sign of backing down from its position. In February, RBA Governor Michele Bullock said she wanted “continuity” on the rate-setting committee.
A spokesperson for Chalmers said the treasurer wants the legislation to pass with bipartisan support because the central bank should be above politics.
“We’ve put a lot of effort into engaging and consulting with the opposition in a really genuine way on these reforms and will continue to do that,” the spokesperson said in a statement.
--With assistance from Swati Pandey.
©2024 Bloomberg L.P.
