Treasurer Acknowledges Millions Disappointed by Rate Hold, Welcomes Board Split Transparency
Chalmers refuses to second-guess RBA decision as central bank reveals 6-3 vote breakdown for first time
Treasurer Jim Chalmers acknowledged today that millions of Australians would be disappointed by the Reserve Bank's decision to hold interest rates unchanged, while welcoming unprecedented transparency measures that revealed a split vote among board members.
Speaking after the RBA announced it would maintain the cash rate at 3.85 percent following a 6-3 board vote, Chalmers said the outcome was not what markets or economists had expected but declined to second-guess the central bank's independence.
"This is not the outcome that millions of Australians were hoping for or the outcome that economists or the market was expecting," Chalmers told reporters in Canberra. "I don't second guess decisions taken independently by the Reserve Bank."
The treasurer emphasized his support for newly implemented transparency measures that saw the RBA publish unattributed voting records for the first time, revealing that three board members opposed the decision to hold rates steady.
"I wanted to say that I welcome the transparency of publishing the unattributed votes for the first time. This is quite a substantial change in the way that the Reserve Bank reports its decisions," Chalmers said.
Board Split Signals Deliberation
Chalmers defended the divided vote as evidence of proper deliberation within the monetary policy board, rejecting suggestions that greater transparency should extend to identifying individual members' positions.
"I think this is an appropriate level of transparency. It's certainly much more transparency than we've seen in all of the years that Shane has been writing about the Reserve Bank and others here," he said.
The treasurer argued that disagreement among board members demonstrates thorough consideration of policy options.
"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. "I think 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 on properly and that's a good thing."
When asked whether Australians should know which members argued for lower mortgage rates, Chalmers maintained that the current level of disclosure strikes the right balance between transparency and effective deliberation.
Economic Progress Highlighted
Despite acknowledging market surprise at the decision, Chalmers emphasized economic progress achieved under the current government, including two previous rate cuts over five months.
"The Reserve Bank statement makes it clear that we've made substantial and sustained progress in the fight against inflation and that's why interest rates have already been cut twice in the last five months this year," he said.
The treasurer noted that both headline and underlying inflation have returned to the RBA's target band for the first time since 2021 on official quarterly figures.
"It's worth remembering that the latest monthly inflation figures show that both headline and underlying inflation were in the bottom half of the Reserve Bank's target band for the first time since August 2021," Chalmers said.
He highlighted broader economic achievements, including low unemployment and continued economic growth without recession.
"Under the life of this government, we've got inflation down. We've got real wages growing. Unemployment is low. Our economy has continued to tick over," Chalmers said. "It should be a source of considerable pride for Australians that unlike a lot of countries, we've been able to make this progress on inflation without our economy going backwards."
Global Uncertainty Acknowledged
Chalmers pointed to international developments, particularly US trade policy under President Trump, as major influences on domestic economic conditions and central bank decision-making.
"You can see in the Reserve Bank statement that the global uncertainty is really one of the defining influences on our economy at the moment. And I think it will be the main thing that shapes our choices as a government in this second term," he said.
The treasurer confirmed Australia remains subject to the lowest baseline US tariff rate of 10 percent, while other countries face higher rates following recent Trump administration announcements.
"There's no change to the US approach to Australia. We're still subject to the lowest baseline rate, which is the 10%," Chalmers said. "We've made it very clear that we think these tariffs are bad for the US, bad for Australia and bad for the global economy."
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Treasury Secretary Vote Remains Private
When questioned about Treasury Secretary Jenny Wilkinson's vote as a board member, Chalmers declined to reveal her position or discuss her voting intentions.
"I don't discuss the Treasury Secretary's vote, and thirdly, I'm not aware of how Secretary Wilkinson voted on this occasion," he said.
Asked whether he would expect the Treasury Secretary to vote in line with government views, Chalmers clarified the independence of board members' decisions.
"That's not how it works, Greg, no," he responded.
Industrial Relations Decision Defended
Addressing yesterday's Fair Work Commission decision requiring BHP to pay labour hire workers the same rates as permanent employees, Chalmers welcomed the ruling while acknowledging the company's concerns.
"We believe in a fair day's pay for a fair day's work. And that's really one of the defining motivations of our government," he said.
The treasurer said the decision would deliver "decent pay for thousands of workers, I think in this case across central Queensland."
While acknowledging BHP as "a huge employer in our economy, a crucial part of our economy," Chalmers said the government must weigh all considerations in supporting fair pay outcomes.
Tax Reform Process Continues
On domestic tax reform, Chalmers confirmed the government's known position opposing GST changes while maintaining openness to other proposals through upcoming roundtable discussions.
"I think the views, the government's views about the GST are well known. I've expressed them publicly myself and the Prime Minister has in recent days as well," he said.
The treasurer outlined recent meetings with Business Council leadership and the Australian Council of Trade Unions as part of preparation for economic reform discussions.
"I encourage people to come to this round table as I have and as I will with an open door and an open mind," Chalmers said. "We don't want to artificially limit the suggestions and the ideas that people put to us."
China Trade Relationship Emphasized
Looking ahead to Prime Minister Anthony Albanese's planned visit to China, Chalmers emphasized the importance of stable trading relationships while noting the government's success in stabilizing bilateral relations.
"This government has been really successful at stabilising the relationship with China in a way that's really good for our economy and for our workers and employers and industries," he said.
He indicated continued commitment to foreign investment reforms that streamline low-risk cases while strengthening oversight of higher-risk investments in critical areas.
"My foreign investment reforms have been all about strengthening the system and streamlining it. Streamlining it for low risk cases, strengthening it for higher risk cases," Chalmers said.
Monthly Inflation Data Development
The treasurer addressed questions about the RBA's continued reliance on quarterly rather than monthly inflation data, noting ongoing work to improve monthly figure reliability.
"I think there are good reasons to take the quarterly numbers more seriously for the time being than the monthly numbers. The monthly numbers, as you know, don't compare the same basket from month to month," he said.
Chalmers confirmed government funding for enhanced monthly inflation reporting that would match quarterly data quality.
"Before long, we will have very robust, very reliable monthly inflation figures, as robust and reliable as the quarterly figures, and that will help not just the Reserve Bank make its decisions, but will more broadly inform our economic considerations as well," he said.
The treasurer concluded by reiterating his position on central bank independence while acknowledging public disappointment with today's outcome.
"I acknowledge it's not the outcome that a lot of people wanted. It's certainly not the outcome that the market was expecting or economists were expecting," Chalmers said. "But there are good reasons why I don't make predictions in advance. There are good reasons why I don't second-guess decisions after they've been taken."
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