SYDNEY, Sept 23 (Askume) – Long-delayed reforms at the Reserve Bank of Australia (RBA) suffered a fresh setback on Monday when Greens MPs called on the Labor government to leave interest rates on hold in exchange for its support for a rate cut bill.
The Greens said in a statement they would not pass Labor’s RBA reforms unless interest rates were cut.
The Greens said: “The Reserve Bank should cut interest rates tomorrow and, if they don’t, the Treasurer should use his existing powers to reduce rates and ease the pressure on mortgage holders.”
The Reserve Bank of Australia will decide on its next policy move on Tuesday, having kept interest rates unchanged at 4.35% since November. Policymakers have virtually ruled out a rate cut this year as inflation remains stubbornly high, angering borrowers.
Reforms recommended by last year’s independent review also include the creation of a separate governance committee to complement the current monetary policy committee.
The nine-member rate-setting committee will still have six external members, which the Liberal and National opposition say could be used by the ruling Labor Party to appoint members more friendly to the current government.
Only two weeks ago the Liberal-National Coalition was opposing the reform , meaning Treasurer Jim Chalmers would need the support of the Greens or independent MPs to pass it into law.
Finance Minister Katy Gallagher said the Greens were “out of control”.
“We’re not going to do it because it’s madness. It’s financially irresponsible and we’re not going to do it,” Gallagher told ABC radio.
Political battles mean the reform bill remains in limbo, with policy committees maintaining the status quo.
The RBA has adopted some of the review’s recommendations, including holding fewer but longer policy meetings and holding press conferences after each decision.
However, other issues, including the regular attendance of all board members to discuss their views on the policy, are yet to be decided.
