Coalition MPs are urging Peter Dutton to oppose forcing the Reserve Bank to equally consider unemployment and inflation when it sets interest rates, warning the proposal would soften the bank’s focus on keeping price pressures low.overhaul of the RBA
Converting the bank’s triple mandate into a dual mandate for full employment and low inflation was one of 51 recommendations in the federal government’s independent review into the RBA, released in April. The creation of a specialist board of monetary policy experts to set interest rates was another key recommendation.
“Trying to make the RBA hit both goals sets them up to fail. Also, at a time of runaway inflation, we should maintain our focus on getting price pressures down.”The review recommended consolidating the RBA’s triple mandate into a dual mandate by removing the requirement for the central bank to consider “the economic prosperity and welfare of the people of Australia” in its decision-making.
“Employment is not monetary policy and sits with the executive government,” Senator Bragg said. “Better to have clean lines, otherwise there will be permanent buck passing.”
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