Treasurer Jim Chalmers has responded to rumors of tension between him and outgoing Reserve Bank Governor Philip Lowe as the pair travel to India on Sunday.
Dr. Chalmers announced Friday that Dr. Lowe will not be reappointed to his position – with public anger over 12 rate hikes since May 2022 having sealed his fate.
Instead, when his term expires in September, he will be replaced by his current deputy, Michele Bullock, who will become the Reserve Bank’s first female governor.
But the treasurer and Dr Lowe will travel to India on Sunday for a meeting of the world’s finance ministers – a trip that many believe will now be very exciting.
But speaking on ABC’s Insiders program, Dr. Chalmers said he had “a mountain of respect for Philip Lowe.” I mean it. I have worked closely with him for a long time.
‘
Federal Treasurer Jim Chalmers (pictured with his wife Laura) has heard rumors of “awkward” tension between him and outgoing Reserve Bank Governor Philip Lowe.
The treasurer said he was not concerned that the journey would now become uncomfortable and that Dr Lowe ‘has conducted himself throughout with characteristic dignity and professionalism.
“By the way, he also said Michele Bullock’s appointment was a first-rate appointment,” he said.
Dr. Chalmers said Dr. Lowe had the government’s respect and gratitude for his work and praised the governor’s response to the news.
“He behaves in an impeccable, dignified manner,” he said. ‘We work very well together… We are professionals.
“I have a lot of respect for him and he is highly regarded internationally.
“We chose Michelle Bullock to drive the bank forward, but that doesn’t detract from Philip Lowe’s dedication.”
Insiders presenter David Speers questioned whether Dr Chalmers was respecting Dr Lowe’s interest rate decisions – after raising them 12 times in the past 13 months.
After the July board meeting during the school holidays, the cash rate remained unchanged at an 11-year high of 4.1 percent.
The decision marked only the second monthly pause since April, with interest rates rising at their most aggressive pace since 1989 since May 2022.
“People under pressure want to understand why these decisions are being made,” Chalmers said.
“I know it’s my responsibility to explain and sometimes defend the decisions I make under the government’s economic plan and the budgets I hand over.”
Reserve Bank Governor Philip Lowe (pictured) travels to India with Treasurer Jim Chalmers on Sunday for an economic summit
The Reserve Bank has paused rate hikes for only the second time this year, but the relief is likely to be short-lived
Speers interrupted to suggest that the treasurer was not defending the reserve bench.
“The Reserve Bank has an important role in explaining the decisions they make,” said Dr Chalmers.
“I don’t think that’s a particularly controversial point.”
Dr. Lowe is the first RBA governor in nearly 30 years not to extend the original seven-year term by three years.
As head of the Reserve, he has come under heavy scrutiny over the past year, particularly from homeowners who have endured 12 rate hikes since May 2022.
Those increases came after Dr Lowe infamously promised that interest rates would not rise until 2024.
Both his predecessors, Glenn Stevens and Ian Macfarlane, had their terms extended to 10 years.
Ms. Bullock, who will become the RBA’s ninth governor, will begin her seven-year term on September 18.
Dr. Chalmers said the decision not to extend Dr Lowe’s term “relates more to the future than to the recent past.”
“Michele Bullock, as the outgoing governor has said, I think it’s a first-rate appointment.”
Prime Minister Anthony Albanese (left) is pictured with new Reserve Bank Governor Michelle Bullock (center) and Treasurer Jim Chalmers (right)