The Reserve Bank is under more scrutiny than at any time in the last three decades. Its recent interest rate hikes have seen governor Philip Lowe face critical media coverage, while the Albanese government will launch an independent review of the central bank’s performance within weeks.
But it isn’t just Lowe whose work should be scrutinised. The bank’s big decisions, such as whether to hike interest rates, are made by its nine-member board. Three of the members (the governor, deputy governor and treasury secretary) are bureaucrats, while the remaining six are appointed by the treasurer.
These are some of the most powerful policymakers in the country, yet their credentials are rarely scrutinised by the mainstream media. So, who are they?
Who is on the Reserve Bank board?
All six of the current non-executive members were appointed under the Turnbull or Morrison governments.
| Current members of the Reserve Bank Board | |
| Member | Current occupation |
| Chair: Philip Lowe | Reserve Bank governor |
| Deputy Chair: Michele Bullock | Reserve Bank deputy governor |
| Steven Kennedy | Secretary of the Australian Treasury |
| Mark Barnaba | Director of Fortescue Metals, HBF and various organisations, senior fellow at EY Oceania |
| Wendy Craik | Director of various organisations, on advisory committee of the CSIRO |
| Ian Harper | Dean and director of Melbourne Business School, director of Harper Associates and other organisations |
| Carolyn Hewson | Director of CSL and Infrastructure SA |
| Carol Schwartz | Founding chair of the Women’s Leadership Institute Australia, director of various organisations |
| Alison Watkins | Chancellor of the University of Tasmania, director of CSL, Wesfarmers and other organisations |
Two members — Mark Barnaba and Alison Watkins — concurrently sit on the board of the Centre for Independent Studies (CIS), a centre-right think tank, while another — Ian Harper — sits alongside Peta Credlin on the board of the controversial, Liberal-aligned Robert Menzies Institute. Two members are current or former directors of fossil fuel companies, while others formerly held leadership roles at the the National Farmers Federation (Wendy Craik, as executive director) and Property Council (Carol Schwartz, as president).
There is no doubt they all have accomplished CVs. None of these “interlocking directorships” are necessarily improper or conflictual — though Ian Harper was forced to disassociate himself from a Liberal fundraising forum while heading up the Abbott government’s competition review.
The Coalition have long used government appointment powers to engineer cultural change at public institutions — see the ABC and SBS.
It’s also not clear whether these members’ more conservative connections were formative or merely reflective of the RBA’s existing culture. Lowe, for instance, has admitted the RBA donated $20,000 per year to the CIS and the conservative Sydney Institute since 2006, but has not donated to centrist or left-leaning think tanks.
(In its 2021 annual report, however, the RBA wrote it had undertaken a review of these memberships to ensure entities were “independent and not aligned with a political party or some other institution”. Yet following this review, the Bank renewed its membership of the Centre for Independent Studies, the Committee for Economic Development of Australia (CEDA), the Ethics Alliance and the Lowy Institute for International Policy, and became a member of the Labor-aligned McKell Institute.)
But since the Liberals’ electoral wipeout, many of these board members now represent an ideological minority and stand out of step with the Albanese government’s professed values. The question remains whether Treasurer Jim Chalmers will reshape the RBA board closer to his political image, like his predecessors did.
How have they performed in recent years?
Political stripes aside, the upcoming independent review will examine how well these members have performed. Luckily, new research out this month by economist Zac Gross and Assistant Treasurer Andrew Leigh tackles that question.
Their answer: the RBA hasn’t performed terribly, but it could’ve done much better.
Gross and Leigh find that the RBA did a good job keeping the economy out of recession during turbulent periods in 2001 and 2000. But they kept the cash rate too high in the four years before COVID hit, costing an estimated 270,000 jobs — for comparison, Gross claims shutting the nation’s entire coal mining sector tomorrow would directly cost just 38,100 jobs.
While the RBA likes to appear technocratic and value-neutral, their decision to undercook the economy pre-COVID was invariably political — indeed, some argue it was influenced by then-treasurer Scott Morrison’s agreement with the bank to prioritise “financial stability”. They shielded the richest from fortune-shaving inflation at the expense of workers, whose job opportunities were limited in a slower growing economy.
Bringing labour on board
Here’s a left-field idea which the upcoming review of the RBA should consider (but probably won’t) — putting a representative of Australian workers on the bank’s board. Having suffered most from the bank’s blind spots, injecting a voice for labour into boardroom discussions could help rebalance their current conservative, pro-capital bias and reprioritise its commitment to full employment.
Replacing outgoing members with people representing more diverse constituencies and perspectives than merely the top echelons of the business community is vital to ensure our central bank remains fit for purpose.
This might sound radical, but both Bob Hawke and Bill Kelty sat on the RBA board during their stints at the helm of the Australian Council of Trade Unions. The Fraser government even reappointed Hawke during a period of heightened industrial conflict.
Treasurer Jim Chalmers will have an opportunity to choose a new board member in August, when Mark Barnaba’s first term comes to an end. The Australian and the AFR would undoubtedly screech with terror, but if Chalmers were to truly follow in the footsteps of his idols Hawke and Keating, he’d appoint the ACTU’s secretary Sally McManus. Or perhaps its president Michele O’Neill — she even has financial experience, as she sits on the board of Australian Super. These picks would also keep the board majority female.
Over to you, Jim: do you have the courage to give workers a voice in the halls of monetary power?
Editor’s note: This story has been updated to include more detail of the RBA’s memberships based on its 2021 annual report)
Sally McManus would be an excellent choice to sit on the Reserve Bank Board, for all the reasons and precedents stated.
I always find it curious that while Hawke, Keating, Rudd, Gillard, Shorten and Albanese were available to meet with the so-called “big end of town”, (and Shorten be accused by the idiotic Turnbull of being a class traitor for knowing the Pratts), I don’t recall Howard, Abbott, Turnbull or Morrison ever inviting anybody from the ACTU, or any of its affiliates, for tea and scones, to have a yarn about the concerns of the working classes.
It could be a step too far for the unimaginative and risk averse governments we elect these days but it would be a step in the right direction.
Could we please stop referring to the elected officials of unions as bosses? The situation is more nuanced than that and Crikey should be better than this.
Wheels within wheels and playing a ‘long game’ of influence ‘Two members — Mark Barnaba and Alison Watkins — concurrently sit on the board of the Centre for Independent Studies (CIS), a centre-right think tank…’
CIS allegedly has links to the US based Atlas Group of global think tanks and closely related to the IPA (according to Sourcewatch & Science Corruption); basically Koch Network of think tanks promoting radical right libertarian ideology (Jane Mayer).
There needs to be an end to these vanity appointments of captains of industry and political dilettantes to University chancellorships. According to a staff member of my acquaintance, the overheads at the office of one recent Chancellor, well into his dotage, were out of control partly because he insisted on first class air travel for Sir and his Lady on their multiple sojourns every year. Mark Vaile’s appointment to the University of Newcastle last year caused uproar among the academic and student body, and the offer was wisely withdrawn. Julie Bishop’s appointment to ANU is detrimental to that University’s academic and social reputation.
CIS board member Alison Watkins, until recently the CEO of Coca Cola, seems a poor fit to a modern University. The CIS website dignifies its staff writers with self-appointed titles such as “research scholars” and “scholars in residence”, plagiarised of course from the genuine academic sector, and designed to mislead the public. With the appointment of Watkins to a real University, by a “confidential process” no less, the boundary blurs even further. A recent CIS “research paper” is described as “a worried warning to Australia’s ruling elite of a political radicalization among young people and the threat that it poses to the capitalist system” by Wikipedia.
The abject failure of these Chancellors to successfully argue for JobKeeper to be extended to their University staff makes you wonder if they serve any useful purpose at all.
Maybe a union rep would have starved off one of the many bubbles that the RBA has unleashed through it decades of unending incompetence. Surely the Unions would have said a runaway dollar bubble in 2011 was a really dumb policy. But Gittins and co – in the Broadsheets – would have railed against any intervention in currency markets even when every other central banker was gaming our dollar against the high interest rates that was all the rage at the RBA 10 years ago.
So yer why not give Sally a go.