Jim Chalmers' worrying admission about interest rate cuts that should have every Aussie afraid as faceless RBA bureaucrats decide fate for millions
The RBA's new monetary policy board voted six votes to three to leave the cash rate unchanged at 3.85 per cent - surprising financial markets, which had universally expected a cut.
The government argues its changes to how the Reserve Bank decides interest rates make it more transparent, but the votes of individual board members are kept a secret, potentially making them faceless bureaucrats.
Only three members are full-time employees of the federal government, including Reserve Bank Governor Michele Bullock, her deputy Andrew Hauser and Treasury secretary Jenny Wilkinson.
The remaining six are part-time appointments drawn from academia and business, who collectively have the numbers to overpower the Reserve Bank's own permanent staff members who sit on the monetary policy board.
They include former Coca-Cola Amatil chief executive Alison Watkins, who still sits on the boards of CSL Limited and Wesfarmers as a non-executive director.
Chalmers has admitted he had no idea how Wilkinson voted, despite her representing his Treasury department and the views of the elected government.
'First of all, no. I don't know who voted in which way,' he said.
'Secondly, I don't discuss the Treasury Secretary's vote. And thirdly, I'm not aware of how Secretary Wilkinson voted on this occasion.'
The Reserve Bank has, for the first time, published the vote of the new monetary policy board.
But unlike the US Federal Reserve, the RBA doesn't say how each board member voted.
Despite that, Chalmers argued the Reserve Bank was now being transparent.
'Obviously, it will be a source of some interest that the Reserve Bank board was not unanimous on this occasion, that there were different views expressed around the boardroom table,' he said.
'We know that because of the publication of these unattributed votes, I think that transparency is a welcome change.
'I'm grateful to the Reserve Bank, and particularly to the Governor of the Reserve Bank, for the role that she has played in making sure that those decisions are more transparent.'
Ms Bullock on Tuesday argued that keeping votes anonymous would allow more frank discussion, without board members being lobbied.
The remaining six are part-time appointments drawn from academia and business, including former Coca-Cola Amatil chief executive Alison Watkins, who still sits on the boards of CSL Limited and Wesfarmers as a non-executive director
'Our agreement with the Treasurer is that we will - and that was the recommendation of the review; the reason it was recommended that it was an unattributed vote was that it would mean that people weren't subject to lobbying, it would mean that people could speak freely and I think that's a really important point,' she said.
Chalmers argued a split view meant there was proper debate.
'We want these to be decisions which are taken after a lot of deliberation and debate,' he said.
'The fact that the Reserve Bank board was split on this occasion, that there wasn't a unanimous view, is a signal that these decisions are deliberated and debated properly and that's a good thing.
'We want to make sure that people can participate in these Reserve Bank meetings openly, that the public knows whether the decision was taken unanimously or otherwise.'
But the establishment of a new RBA monetary policy board also means the six part-time members could potentially use their numbers to dismiss the views of Reserve Bank staff who specialise in economic modelling.
'It's a good thing to have people around the table that will tease out and contest the views, whether it's of the Reserve Bank staff or the Governor or others,' Chalmers said.
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