Treasurer Jim Chalmers has today outlined the terms of reference for the federal government’s review into the Reserve Bank of Australia (RBA).
He said the review was needed because the economy was facing “very difficult” challenges in the medium and long terms.
“This is our opportunity to ensure that the monetary policy framework is the best it can be to make the right calls in the interests of the Australian people and their economy.
“This review will consider the RBA’s objectives, mandate, interaction between monetary, fiscal and macro credential policy, its governance, culture, operations and more.”
Chalmers insisted the government was taking an open mind into the RBA review.
“I don’t want it to be an exercise in pot shots or second guessing, I don’t want it to be exclusively focused on a backward looking blame shifting exercise.
“I want to genuinely see it be about how we have the world’s best central bank into the future.”
Despite this, the review will investigate whether the central bank erred on forecasting inflation.
Chalmers said a panel of three experts – from Australia and overseas – who are independent of the Treasury and RBA will lead the review.
