The fate of RBA governor Philip Lowe will be revealed in a matter of weeks, with Treasurer Jim Chalmers to announce if he will be given a second term in the top job in July.
Dr Lowe – who has come under fire over the last year for raising interest rates 12 times in the past 13 months despite an earlier prediction they would remain steady until 2024 – has served as governor for seven years – the maximum length of his term before it must be reviewed.
Dr Chalmers said he was consulting with cabinet colleagues and others to determine the future of the central bank’s leadership, and whether to extend Dr Lowe’s tenure or appoint a new governor.
“My intention is to come to a conclusive view on the RBA governor and announce that in July, but certainly before the parliament returns, that’s always been our intention,” Dr Chalmers said on Thursday.
“The current term of the RBA governor ends in September – we’ve said for some time that we’ll consider that appointment around the middle of the year.
“It’s now around the middle of the year. I’m in the process of consulting with my Cabinet colleagues and with others.”
Dr Chalmers said being governor was a “big job”, and so deciding whether Dr Lowe would stay in or be replaced was a “big call”.
“And so we’ll work through it in the usual methodical and considered way,” he said.
“My attention is to come to a view in the coming weeks, ideally to announce the outcome of that in July, but certainly before the parliament returns.”
Dr Lowe has faced heavy criticism, including from Prime Minister Anthony Albanese for making promises in late 2021 that interest rates would remain at 0.1 per cent until 2024.
Interest rates are now at 4.1 per cent – the highest since 2012.
Earlier this month, pressed on why the government’s May budget had predicted the cash rate would remain steady at 3.85 per cent when a 25 basis point rise was just weeks away, Mr Albanese reiterated that the RBA was independent.
He went on to answer with what appeared to be a lighthearted – if unprompted – gibe directed at Dr Lowe.
“That’s not the only prediction on interest rates that has not been correct. It’s not as incorrect as the ones saying there’d be no increases till 2024, so these things are all relative,” he said.