(Bloomberg) -- Australian Treasurer Jim Chalmers said he has offered the Liberal-National opposition concessions on reforms to the Reserve Bank in an effort to secure its support for legislative changes and end a monthslong deadlock.
The overhaul of the RBA includes splitting its board into a new monetary policy committee and governance board and requires amendments to the RBA Act. Chalmers has sought the backing of the opposition to pass the bills in order to avoid dealing with minority parties that might seek more radical changes.
The opposition has demanded that all current board members be transferred to the monetary policy committee to avoid giving Chalmers the opportunity to make a lot of new appointments. The treasurer, in contrast, wanted current directors to have the option of joining either the committee or the governance board.
Chalmers on Friday announced the government will “accommodate the opposition view when it comes to the make-up of the monetary policy board,” at a press conference in Brisbane.
“In the interests of getting a deal, I have proposed everyone on the current Reserve Bank board would go on the monetary policy board unless they write and indicate a willingness” to switch to the governance board, he said.
The dual board framework was originally intended to be in place by mid-2024, but differences between the Labor government and center-right opposition delayed passage of the bills.
“It has dragged on too long and we want to get cracking,” Chalmers said. “That is why I put these proposals in good faith. The ball is now in the shadow treasurer’s court.
The opposition will take its time and work through the detail of Chalmers’ proposal, Shadow Treasurer Angus Taylor said in response.
“It is clear from the correspondence received yesterday that the treasurer has realized his previous positions were untenable,” Taylor said in a statement. “Despite long delays, it is promising to see movement, but we will take the time to ensure issues are resolved with due diligence.”
Under the new structure, interest-rate decision will be made by the monetary policy committee, with the RBA’s post-meeting statement likely to contain unattributed votes, as recommended by an independent review of the central bank last year.
The RBA review was commissioned by the Labor government after its election in May 2022 and is one of Chalmers’ signature reforms.
(Updates with shadow treasurer’s response from eighth paragraph.)
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