The Government should remove the power of the Treasurer to overrule the RBA’s decisions.1 The government has adopted this recommendation and we believe this is an error because the mechanism the government currently has to overrule the RBA serves and important function. [...] The government wanted to borrow this money from Australia’s then central bank the Commonwealth Bank.2 The then Governor of the central bank, Sir Robert Gibson, and the Commonwealth Bank Board refused to lend the government the necessary funds. [...] Government appointment of the board It could be argued that the government has ultimate control of the RBA board because it makes all the appointments to the board. [...] The RBA review said: To further enhance the RBA’s monetary policy independence the Review recommends the repeal of s 11 (2)-(7) of the RBA Act, which sets out a procedure for the Government to override decisions of the Reserve Bank Board.4 The government ability to be able to override the RBA Board does not diminish the RBA’s independence, it simply ensures that disputes between the government and. [...] (2) The government could pressure the RBA Board behind the scenes to resolve the dispute in the government’s favor.
- Pages
- 5
- Published in
- Australia
