Australia Treasurer Says Opposition Blocking Central Bank Reform

(Bloomberg) -- Australian Treasurer Jim Chalmers said he was disappointed but not surprised that the Liberal-National opposition had rejected his compromise offer on Reserve Bank reforms and he may turn to minority parties in search of a deal.

“We’ll consider the next steps,” Chalmers told a press conference at Parliament House in Canberra on Tuesday. “All options are on the table, but my preference hasn’t changed. I prefer a bipartisan outcome in the senate.”

The treasurer said he would prefer to negotiate with the minority Greens party than abandon the proposed changes to the central bank altogether.

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 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 last month announced a compromise under which the government would allow everyone on the current RBA board to go on the monetary policy committee unless they indicated in writing a willingness to switch to the governance board.

The Australian Financial Review reported on Tuesday that Shadow Treasurer Angus Taylor rejected the compromise, saying it still leaves open the option for a “stitch up” of the RBA board. 

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.

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