Watching movies, taking holidays, grocery shopping and everyday banking have all been disrupted by technology that brings terms like streaming 5G, Cloud computing and ChatGPT into everyday conversation.
Traditional businesses, education and government services have all changed. And we should see the biggest shake-up in the Reserve Bank’s 60-year history, delivered in 51 recommendations on Thursday, in exactly the same light.
How antiquated that a group of people sat in a hidden room nutting out a plan that would dictate whether we could afford a mortgage, and not be asked to account for that position.
How odd, in 2023, that we have a Reserve Bank board without the requisite skills or ability to challenge the views of the Reserve Bank Governor.
And how refreshing is it that we have a once-in-a-generation policy being discussed by the Treasurer with the Opposition – ahead of it spilling out into public debate?
Jim Chalmers’ in-principle support for the recommendations released in the review of the RBA is also welcome.
So too are the specific recommendations themselves – which have also been largely applauded by most of the stakeholders at the heart of the proposed changes.
And that includes mortgage holders, who have borne the brunt of the Reserve Bank’s recent string of rate hikes.
The review plays its cards well, making the point that this is not a judgment on recent decisions, but on decades of decisions. This is a roots-and-branches overhaul.
In brief, the 294-page review recommends breaking the RBA board into two – one for monetary decisions, and the other to oversee the central bank.
Welcome changes
Critically, the monetary board – which will decided the cash rate – will include six external members, all highly qualified in economics, labour markets and monetary policy. They would sit alongside the governor, his deputy, and the head of Treasury in determining the cash rate.
And surprisingly, perhaps, the review recommends that the governor hold a press conference after each monetary board meeting – increasing accountability and transparency around decisions.
The need to explain decisions to the public, the independence of the central bank and the need for cultural change should all be welcomed – and already carry the support of Treasurer Jim Chalmers.
Dr Chalmers has been clever here. The RBA has lifted official interest rates 10 times on the trot, despite its governor Philip Lowe, saying during the pandemic that rates were unlikely to rise until 2024 at the earliest.
Voter frustration and anger has threatened to spill over, and expectations around the review have been high.
But Dr Chalmers has been open and public about the review, which was launched almost a year ago, and has ensured the Opposition has not been blindsided either.
Indeed, the Opposition treasury spokesman Angus Taylor has already flagged support for the direction of the recommendations, believing they deliver greater expertise and independence in the setting of monetary policy.
It’s unlikely there will be too much fretting in other quarters around recommendations that provide greater breathing space between interest rate decisions, greater accountability and more expertise in decision making.
Dr Chalmers, while likeable and highly articulate, had a few early stumbles in the Treasury portfolio, but on Thursday highlighted a renewed confidence in juggling the demands of several stakeholders.
In a few weeks, the Treasurer is set to deliver the federal budget.
Cost-of-living relief has to be delivered to voters, and that might prove tricky against the advice he received in the US last week about the looming slowdown in the global economy.
That’s when perhaps it will become clearer just how adept at juggling different stakeholder demands the 45-year-old has become.
