Joint press conference, Canberra
ANTHONY ALBANESE:
This morning the Cabinet has met and agreed with the recommendation from the Treasurer, supported by myself, that Michele Bullock be appointed as the ninth Reserve Bank Governor. Michele will be the first female Governor since the independent RBA was founded in 1959. After close to four decades of service to the RBA, most recently as the Deputy Governor, Ms Bullock is eminently qualified to lead this national institution. Michele's will be an important job at an important time with the challenges that we face globally, challenges which I have of course been discussing at the NATO Summit over recent days. This appointment follows a rigorous process, including consultation with the Opposition. I also want to acknowledge Dr Lowe’s seven years of service to the nation, in particular his commitment to supporting Australian jobs, incomes and businesses during the depths of the pandemic and global economic downturn. It was indeed an extraordinary time and we thank Dr Lowe for helping the Australian economy navigate those unprecedented challenges, and most recently the global economic consequences of Russia's illegal and immoral invasion of Ukraine. Ms Bullock is an accomplished economist with wide experience at the RBA, including as Deputy Governor and Deputy Chair of the Payment Systems Board. The incoming Governor will oversee the implementation of the recommendations of the RBA Review to make sure that we have the most effective central and monetary policy framework as Australia and the world faces ongoing economic challenges. I very much congratulate Michele Bullock on this appointment, and I thank Jim for overseeing as Treasurer, the process to ensure that we got at the right decision for Australia and I am confident that we have done just that.
JIM CHALMERS:
Thanks very much, Prime Minister. We are really proud to be announcing that Michele Bullock will be the ninth Governor of the Reserve Bank of Australia. Her appointment will take effect from 18 September this year. This is a history‑making appointment. Michele Bullock will become the first woman to ever lead the Reserve Bank in this country. Michele Bullock is the person best‑placed to take the Reserve Bank into the future. Michele is an outstanding economist, but also an accomplished and respected leader. Her appointment best combines experience and expertise with a fresh leadership perspective at the Reserve Bank as well. Now, this is the right call, but it's not an easy call and I want to acknowledge that as well. This comes after months of deliberation and consultation and we have come at this in the most methodical and considered way that we could. This is a big job, this is one of the most important appointments that we will make as a government and so we have treated it methodically and in a considered and consultative way as well. I want to say, as the PM did, that we thank Phil Lowe for more than four decades of dedication and commitment and service, not just to the Reserve Bank and not just to the economy, but to our country as well. Phil Lowe goes with our respect, he goes with our gratitude, and he goes with dignity, and I want to make that clear. On a personal level, I have really valued my working relationship with Phil. I have known Phil for a long time, he is on a personal level a terrific guy, and he has handled himself impeccably as we've gone through this process. And the statement that the Reserve Bank is releasing today and his comments is evidence of that. And I have conveyed to him directly, and I'm pleased to say to you as well, that I have said to him this week that the way that he has carried himself has been characteristically kind and classy, and much appreciated by the government. Now, obviously an appointment of this magnitude there is lots of speculation, and I think it is a good thing today that we can end the speculation about the next Governor of the Reserve Bank. The decision was not taken until it was taken by the Cabinet collectively today, and that's important, but it has been my view for a while now that Michele Bullock is the best person to take the bank into the future. It is a wonderful appointment I think, and we are really proud to announce it today. It is a history‑making appointment, it is the right appointment and it comes after lots of consultation.
JOURNALIST:
The decision links back to continuity if you’d like, with Ms Bullock and the experience as you said. Dr Lowe wanted to do another term, why wasn't he given another term? Was it because you didn't believe he was up to the reform task, or was it broader than that?
TREASURER:
First of all, of the eight Governors who have served to this point, five of them haven't had their term extended, so extending a Governor's term has been, in historical terms, the exception rather than the rule. I think the average tenure for Reserve Bank Governor is a little under eight years and Phil brings up seven years, and so it is not wildly out of the norm that Phil will finish up after seven years. I think Michele Bullock is the best person to take the bank into the future, and Michele represents the best combination of that experience and expertise, but also a fresh leadership perspective. And one of the things that I have really admired about Michele Bullock as I've come to know her, and especially to understand her role and her contribution to the Reserve Bank Review, is that Michele has thought deeply about how we take the bank forward into the future. She does have a lot of experience at the bank, she does have a lot of expertise as an economist, but one of the things I really value in this appointment is the style and nature of her leadership. She is an accomplished leader, a highly respected leader and that's what we need at the bank to take it forward.
JOURNALIST:
The RBA review said the organisation needed a shake‑up. Michele has been at the RBA For almost forty years as you alluded to, do you still think she is the right person to shake things up at the bank and how is she going to do things differently?
TREASURER:
Well Michele Bullock has made it very clear to us that part of her role is how we can implement in the best possible way the recommendations of the Reserve Bank review. We've had a number of conversations about that and I know that Michele Bullock is committed to the RBA review process, as am I as you know. And there is a lot of work to do to agree the new statement of conduct this year and to introduce the legislation this year ideally as well. And so I think the fact that Michele Bullock brings that experience and expertise, but also that heft and gravitas will be a really important asset when it comes to the relationship with the various RBA boards and when it comes to betting down and implementing the review, I think she’s got the best possible combination of attributes to help us do that.
JOURNALIST:
Prime Minister, Peter Dutton made it clear yesterday that Jenny Wilkinson and Dr Steven Kennedy would not be his picks, that he found them objectionable and he said the decision was made this morning. How much did that factor into your decision today?
PRIME MINISTER:
Zero. Less than zero, it must be said.
TREASURER:
I wasn't obligated to consult the Opposition on this appointment, but I did it anyway. Not obligated under the old arrangements, not even obligated under the recommendations of the Reserve Bank Review. But I thought it was important that I do that and I thank Angus Taylor for making the time on a couple of occasions, including this week, to talk about this appointment. Now I have been forming a view for some time about my recommendation to Cabinet, but this is a Cabinet decision and the Prime Minister runs a Cabinet government and so the decision wasn't taken until today. Now, when it comes to Peter Dutton, Peter Dutton is so relentlessly negative that he is even now bagging things that aren't happening, right? And this is bordering on the pathological when it comes to his negativity. And to describe people of the calibre of Steven Kennedy and Jenny Wilkinson, who have advised both sides of politics in a frank and fearless and impeccable way as somehow tainted? It’s not those two who are tainted. We won't be taking lectures about the public service from the party of Robodebt, for example. So I say about Jenny Wilkinson and Steven Kennedy, this is the best of all worlds. We get Michele Bullock at the Reserve Bank, and we get Steven Kennedy at the Treasury, and we get Jenny Wilkinson at Finance. I couldn't have more respect for Kennedy and Wilkinson and Bullock. We have got those three in the key positions, and that's a really good outcome.
PRIME MINISTER:
Can I make this point as well, with regard to the public service, one of the things I want my government to be characterised by is lifting up the respect for the public service, which is an honourable profession. For the Leader of the Opposition to be critical of people at the calibre of Steven Kennedy who, I remind people, was appointed as the head of Treasury not by the Albanese government but by our predecessors, and Jenny Wilkinson who was the Deputy Secretary of the Treasury under the former government and was then appointed as the Secretary of the Department of Finance by mine is, I think, completely reprehensible. And I just support the comments of the Treasurer in that when I heard about those comments, I just thought, 'Is there anything that this bloke won't play politics with and won't be negative about?'.
JOURNALIST:
Prime Minister and Treasurer as well, the RBA Review was highly critical of the Reserve Bank's insular culture, to the appointment of internal candidate as the Governor. I mean, it’s all the more likely that Ms Bullock's replacement as Deputy Governor will be external candidate who hasn’t worked within the Reserve Bank?
TREASURER:
We will work closely with Michele Bullock, but also with the Treasury, and I will consult widely again. We will intend to fill the Deputy Governor position on the same time‑frame, so by the middle of September. And obviously what we will try to do there is to make sure we have got the best combination of talent and experience. I don't want to artificially limit the field by coming at it the way you have described it, but clearly what you want at the bank is you want in addition to experience and expertise and heft and gravitas and the right kind of leadership attributes, you want to make sure you have the right combination of technical attributes as well. And that will feed into our decision, but I don't want to artificially limit it now.
JOURNALIST:
Prime Minister, many unions were a bit upset when Bullock said last month that she wanted unemployment to rise regarding inflation. Is that a concern, that response and that view of hers at this point and isn't that a contradiction of the Labor Party's platform for full employment?
PRIME MINISTER:
I think that, I note that there is a great deal of interest in the Labor Party's platform from people outside the Labor Party. The Labor Party platform is a public process that we go through, we will have our national comments. Unlike other political parties we will do it in a transparent and public way.
TREASURER:
On the first part of the question, the comments that Michele Bullock made in that speech as I said at the time just reflected what the Treasury expects and what Reserve Bank expects that as inflation moderates we are both expecting to see a tick up in the unemployment rate. I think that’s a relatively non‑controversial point to make, and I said that at the time as well. And when it comes to full employment, one of the key outcomes or recommendations out of this RBA review is that the bank obviously care about price stability, but also cares about full employment. They've actually got two objectives, and I think that's really important. And every time the Reserve Bank board meets, and after next year the monetary policy board of the Reserve Bank, they will weigh up those two considerations.
JOURNALIST:
Treasurer, just on the Monetary Policy Committee, how soon do you think it will be operational? When do you start making appointments? And is that one of the key discussions you are going to have with Ms Bullock about the timing, given what Philip Lowe said this week about the change in the meeting schedule from next year?
TREASURER:
When I released this RBA review, I said that our intention, consistent with the recommendations of the review itself, you know probably better than or as well as anyone, Shane, that the report itself recommended some time‑frames and we would like to hew as closely to those as we can, and that has the new changes coming in next year. There’s legislative change required, we would like to introduce legislation by the end of the year if we can. But this is absolutely central to the conversation I will have with Michele Bullock in the lead‑up to, and when she takes up this position. And we want to get the sequence right, and providing clarity on the Governor is the most important first thing. We will now work closely with her and with others to work out the optimal way to implement the recommendations of the review.
JOURNALIST:
Treasurer, you mentioned it minutes ago, that it had been your view for a while now that Dr Bullock would be the best candidate to be the next governor. Can you give us an indication about when that view formed? Was there a particular decision or a way of communication was handled that made you feel that Dr Lowe's time was up?
TREASURER:
No, I've just become more sure about it over time. You would be familiar with the processes, all the RBA watchers in this room would be familiar with the process. You think about and you are provided a shortlist of appointable candidates, obviously we did think about Wilkinson and Kennedy and obviously Michele Bullock. And over time I just became more convinced that we have got a really good opportunity here to appoint a first‑class economist, who has remarkable leadership attributes, and so over time I became more convinced that this was the right appointment, but I consulted genuinely as well. I consulted with the business community, I consulted the union movement, I consulted a number of my colleagues, I consulted the Opposition. And that's because in this government, and Anthony sets the tone here, we work through these big calls in a methodical, considered, and consultative way as we can and that's what we’ve done here.
PRIME MINISTER:
Can I just pay tribute to this bloke and the way that it has been handled. Jim and I would have had, I don't know how many discussions about this to make sure we got the right outcome. I met with Dr Bullock a while ago as well to satisfy myself that the direction that we were considering heading in, I obviously knew some of the other names that were around as well. And I am very confident that this has been got right, and that Jim, as the Treasurer, has taken his responsibility seriously to make sure that it has been got right. And this is an example of what I want to characterise my government as, a government that is orderly, that is considered, that is thoughtful, that has the right processes in place, because if you have that, you will get better outcomes, and this outcome is a very good one for the nation.
JOURNALIST:
Prime Minister, and to the Treasurer as well, now that you’ve announced Michele Bullock as Governor, does the work start now on that legislation and the new statement on the conduct of monetary policy? Are you hopeful you will get that bipartisan support?
TREASURER:
The work has begun already. We have been working on the statement with the existing leadership at the Reserve Bank, but deliberately and for obvious reasons we thought it best to conclude it after we make this appointment, and the same for the legislative part of it. And the second part of your question?
JOURNALIST:
Bipartisan support.
TREASURER:
Ideally, yes. I've said at every point, even before we released the review and I think my actions have shown that I mean it. These are such important matters that will outlive any one government of any one political persuasion and so ideally we would get bipartisan support. I can't imagine we won't now get support for the appointment of Governor, given the criteria that Peter Dutton laid out during the course of the week, so I expect their full‑throated support for this appointment, frankly. But also I have been working constructively with Angus Taylor on the review itself. The best outcome from the country's point of view, not just from the government's point of view, is to get some bipartisanship around these key issues that will outlive the life of any government of any one political persuasion.
JOURNALIST:
Obviously, the face of the Reserve Bank has changed but, to state the obvious, the economic outlook has not. What is the message to Australians who might be hoping that removing Philip Lowe means interest rates will pause?
TREASURER:
First of all, the decision that we are announcing today is not about any one decision taken by the Reserve Bank board or any one outcome over the last couple of years. This is genuinely about who is best‑placed to take the Reserve Bank forward into the future. But we know, the government knows, that Australians are under the pump right now. The primary focus of this government are the cost‑of‑living pressures that people confront. And we take responsibility for our part of easing the pressure on people, providing them cost‑of‑living help without making this inflation challenge worse, and Governor Lowe, to his credit, has pointed out on a number of occasions that our Budget is taking the pressure off inflation, rather than adding to those inflationary pressures. That is our primary focus, the cost of living challenge that people face right now. At the same time, as we invest in the supply side of the economy, and making it more productive and more competitive so that we can grow into the future. We are anticipating a tricky combination of economic conditions over the next little while, a combination of higher interest rates, and a slowing global economy will have implications for us. And one of the reasons it's so important that Governor Lowe and I go to a meeting with our G20 counterparts next week in India, is because we have an opportunity to represent Australia's interests but also to make a contribution to how the world gets on top of this inflation challenge as well. It is still the primary challenge in our economies, it has consequences for all of us and that's why it is the primary focus by the government.
JOURNALIST:
It's been pointed out by economists that it is unusual to remove an RBA Governor in the middle of a tightening cycle, potentially disruptive. Did you consider extending Philip Lowe’s term for even a short period of time just to get us through that tightening cycle?
TREASURER:
To be clear about it, we considered Phil Lowe on a shortlist of appointable candidates. And this idea that I think, members, backbench members of the Opposition put around that this is unusual not to extend him, I mean, is frankly not right. Typically Reserve Bank Governors haven't been extended, the last couple have, but there has been eight and five of them haven't been extended, so for all the reasons I said before, it is not particularly unusual. I think once we realised we had the right candidate, there is no point extending Governor Lowe if you have the right candidate ready to go, and so we're appointing Michele Bullock from 18 September and Phil Lowe goes with our thanks and our gratitude and with dignity.
JOURNALIST:
The Coalition is already saying that the next Governor's independence will be harmed by punishing Phil Lowe for tough but necessary rate rises. I know you don't agree with that characterisation, but do you want to respond to the concern that that’s going to play on future decisions at the bank?
TREASURER:
Well, I think like a lot of things that Peter Dutton and the others have said in the last few weeks it is a bit ridiculous. Michele Bullock is fiercely independent, tremendously accomplished, and we cherish the Reserve Bank's independence. One of the reasons why we did the RBA review is because we wanted to strengthen the Reserve Bank, and as part of that cherish its independence. You have all asked me questions over the last fourteen months and invited me to second‑guess or pre‑empt decisions taken independently by the Reserve Bank board and I haven't done that, and that's because I do genuinely cherish its independence and everything I do is about strengthening that, not diminishing it.
PRIME MINISTER:
Thanks very much.
