Speaker 1: From Schwartz Media. I'm Ruby Jones. This is seven AM.
Speaker 1: When Jim Chalmers said that interest rate hikes were smashing
Speaker 1: the economy, he was either stating the obvious or starting
Speaker 1: a war, depending on who you ask. For weeks in
Speaker 1: question time and in the news, a picture has been
Speaker 1: forming of an aggrieved treasurer angry at the governor of
Speaker 1: the Reserve Bank. At the same time, senior unnamed Labour
Speaker 1: insiders have called Michelle Bullock a nutter and the RBA
Speaker 1: board widows. But behind the apparent breakdown between the government
Speaker 1: and the Reserve Bank, there's a much more bitter feud
Speaker 1: going on between Jim Charmers and Angus Taylor, who's recently
Speaker 1: walked away from a bipartisan plan to fix the Reserve Bank.
Speaker 1: Today special correspondent for the Saturday Paper Jason Cottsucus on
Speaker 1: how the deal unraveled and what it means for the
Speaker 1: future of the Reserve Bank. It's Tuesday, September seventeen, So Jason,
Speaker 1: it's been more than two weeks now since we heard
Speaker 1: Jim Chalmers say that interest rates are quote smashing the economy.
Speaker 1: Those comments have dominated the news ever since. So why
Speaker 1: do you think that is well.
Speaker 2: For the last two weeks, it feels like we've heard
Speaker 2: nothing else that here's Jim Chalmers at war with the
Speaker 2: Reserve Bank and how they are smashing the economy.
Speaker 3: Treasurer Jim Chalmers has declared the Reserve Bank is smashing
Speaker 3: the economy. I think the Australian people, frankly expect me
Speaker 3: to tell it like it is, and I've been making
Speaker 3: that point for some months. What I said overnight.
Speaker 4: Wasn't you his statement to Overnight making multiple ments of
Speaker 4: the Reserve Bank's thirteen interest rate hikes, saying the impact
Speaker 4: of interest rate rises are smashing the economy.
Speaker 2: It was three days before the release of the June
Speaker 2: quarter national accounts. Those accounts were expected to show, and
Speaker 2: subsequently did, show that the economy was barely growing by
Speaker 2: just zero point two percent in the three months to
Speaker 2: June thirty, and parts of the media framed this as
Speaker 2: a rift between the RBA and the Treasurer. On the Monday,
Speaker 2: the day after the Treasurer made those comments, the Australian
Speaker 2: newspaper led its paper with the headline RBA rates smashing
Speaker 2: nation and that Jim Chalmers had turned on the Central Bank.
Speaker 2: We also found In that story, former Liberal treasurers John
Speaker 2: Howden Peter Costello rising to criticize the Treasurer's comments. It
Speaker 2: felt like they were really trying to confect some kind
Speaker 2: of battle. In fact, it wasn't long before we saw
Speaker 2: the words, you know, Jim Chalmers has gone to war
Speaker 2: with the Reserve Bank, and that he was trying to
Speaker 2: shift blame for a barely growing economy onto the Reserve Bank.
Speaker 2: He tried to do the media rounds to try and
Speaker 2: sort of tamp down the story.
Speaker 3: You know, we've got different responsibilities, the Reserve Bank and
Speaker 3: the government, but we've got the same objective, which is
Speaker 3: to get on top of this inflation challenge, and we
Speaker 3: need to do that in a way that doesn't smash
Speaker 3: an economy which is already a.
Speaker 2: Weak Even Michelle Bullock, you know, the Reserve Bank governor,
Speaker 2: had to brush away questions that the two of them
Speaker 2: were somehow suddenly at war, but she rebuffed that, saying
Speaker 2: both she and the treasure were just doing their jobs.
Speaker 1: Right. Okay, So how would you describe then, the relationship
Speaker 1: between the Reserve Bank Governor, Michelle Bullock and Jim Chalmers
Speaker 1: Right now, Well, it.
Speaker 2: Was Jim Chalmers who appointed Michelle Bullock. She was carefully chosen.
Speaker 2: She's the first woman to lead the Reserve Bank in
Speaker 2: its history. He described her as the right person to
Speaker 2: lead the RBA into the future.
Speaker 3: Michelle Bullock is the person best placed to take the
Speaker 3: Reserve Bank into the future. Michelle is an outstanding and
Speaker 3: economist but also an accomplished and respected the leader.
Speaker 2: And when Jim Chalmers appointed her, of course we knew
Speaker 2: that an independent review into the bank would soon be
Speaker 2: handing down recommendations on how the bank should be structured
Speaker 2: into the future, and that Michelle Bullock was going to
Speaker 2: be the one who would have her hand on the
Speaker 2: tiller as those reforms were handed down and would be implemented.
Speaker 2: And one of the main things that the review recommended
Speaker 2: was splitting the Reserve Bank Board into a board that
Speaker 2: would look after the management and operations of the bank
Speaker 2: itself and then a separate committee that would just consider
Speaker 2: monetary policy and whether interest rates should be moving up
Speaker 2: or down. And since the review made its recommendations, the
Speaker 2: government has been working with the Coalition to try to
Speaker 2: get their support to make the changes outlined in the review.
Speaker 2: Both Jim Charmers and the Shadow Treasury spokesman Angus Taylor
Speaker 2: have both emphasized the importance of a bipartisan approach here
Speaker 2: because whatever changes are made are going to last much
Speaker 2: longer than any one government lasts, so bipartisanship has been
Speaker 2: very important from the outset, and that's why Jim Chalmers
Speaker 2: has had three face to face meetings with Angus Taylor
Speaker 2: since the review was handed down. He's also arranged for
Speaker 2: three in person briefings by Treasury officials for the opposition,
Speaker 2: and they've exchanged also a bunch of letters. So things
Speaker 2: were pretty much going in the right direction up until Thursday,
Speaker 2: August twenty two, when Jim Charmers was heading home to
Speaker 2: Brisbane after a couple of pretty tough eliamentary sitting weeks,
Speaker 2: and suddenly his offers started getting all these calls from
Speaker 2: journalists in the press gallery offering variations of the same question,
Speaker 2: which was you know, was it true that Charmers and
Speaker 2: Taylor had finally reached an agreement to reform the Reserve Bank?
Speaker 2: And the deal that journalists thought was on the table
Speaker 2: had to do with this signature proposal to split the
Speaker 2: RBA board into two, and Chalmers staff were scratching their
Speaker 2: heads at the requests for comment, they couldn't tell where
Speaker 2: the story was coming from. It certainly wasn't from them.
Speaker 1: Okay, So you've got journalists in Canbra clearly getting this
Speaker 1: tip that there is about to be a deal announced
Speaker 1: on changes to the Reserve Bank. So where is this
Speaker 1: story coming from, Jason Well.
Speaker 2: Earlier that day, Jim Charmers had written to Angus Taylor
Speaker 2: agreeing to a key coalition demand that would see all
Speaker 2: of the existing RBA board members who wanted to move
Speaker 2: across to the new interest rate setting Board in order
Speaker 2: to eliminate the perception or the possibility that Charmers was
Speaker 2: going to try to stack the board with people sympathetic
Speaker 2: to the government's political agenda. Chalmer's offers played down the
Speaker 2: suggestion that a deal had been done. What they were
Speaker 2: saying was that they had actually received no response, either
Speaker 2: formal or informal, from Taylor's office to the letter that
Speaker 2: Jim had written earlier that day. But Friday morning's papers
Speaker 2: carried the detail of Chalmer's letter to Taylor, the Australian
Speaker 2: Financial Review leading off its front page with a story
Speaker 2: headlined Charmers offers deal on RBA split. The Australian splashed
Speaker 2: with treasurer deals in libs with RBA two point zero.
Speaker 2: Whether or not Jim Chalmers was annoyed with the Coalition
Speaker 2: for leaking the detail of the previous day's letter to
Speaker 2: Angus Taylor, he certainly didn't show it when he fronted
Speaker 2: up to the media on Friday morning at a press
Speaker 2: conference in Brisbane. In fact, Jim Charmers went out of
Speaker 2: his way to praise Angus Taylor. He said that, you know,
Speaker 2: while the tour had their differences, in this instance, Jim
Speaker 2: Charmers said he thought that Angus Taylor had the right instincts,
Speaker 2: and he went into some detail about the kind of
Speaker 2: good faith negotiations the two had been having over the
Speaker 2: previous few months and how Jim Chalmers had tried to
Speaker 2: accommodate the changes that the Coalition had wanted, and he
Speaker 2: talked about how important it was that these changes be
Speaker 2: above and beyond bi partisan politics. So I think at
Speaker 2: that point a deal was looking pretty good and the
Speaker 2: legislation would sail through the.
Speaker 1: Parliament coming up after the break the deal unravels. So Jason,
Speaker 1: Jim Chalmers has spent more than a year working on
Speaker 1: these reforms the Reserve Bank. Central to this is this
Speaker 1: new board which would set interest rates. And he's been
Speaker 1: negotiating with the Coalition. He's agreed to everything they've asked for.
Speaker 1: The Coalition appeared to be backgrounding that a deal was imminent,
Speaker 1: So tell me what happens next.
Speaker 2: So then Jim Chalmers and his advisors wake up last
Speaker 2: Tuesday morning to see in the newspaper that the deal
Speaker 2: is off. Angus Taylor had told the Australian Financial Review
Speaker 2: that the Coalition would not be going ahead with supporting
Speaker 2: Labour's reforms to the RBA. This was the first that
Speaker 2: Charmers had heard that he'd heard nothing from Angus Taylor
Speaker 2: or anyone else in the Coalition for two weeks. And
Speaker 2: then he wakes up to.
Speaker 1: That headline, right, and so what reason does Angus Taylor
Speaker 1: give this?
Speaker 2: Well, it's quite curious because even though the Government had
Speaker 2: given into every one of Angus Taylor's demands. He told
Speaker 2: the Australian Financial Review that recent public comments from not
Speaker 2: only the Treasurer but other senior labor figures in an
Speaker 2: attempt to blame the RBA for their own economic failures,
Speaker 2: you are deeply unsettling. And he added that considering recent events,
Speaker 2: the Coalition has serious questions about the government's commitment to
Speaker 2: the continued independence of the Reserve Bank of Australia. We
Speaker 2: will not be complicit in Labour's sack and stack strategy,
Speaker 2: which is why we'll be opposing this bill.
Speaker 1: Okay, So tell me a bit then about what else
Speaker 1: we've heard from other labor figures about the RBA.
Speaker 2: Well, when's one accused the RBA of punching itself in
Speaker 2: the face and putting economic dogma over rational economic decision making,
Speaker 2: and Swan said that high interest rates were quote hammering households,
Speaker 2: hammering mums and dads and causing a collapse in spending
Speaker 2: and driving the economy backwards. You know, there's many other
Speaker 2: senior labor figures who've been very angry at the bank's
Speaker 2: interest rate rises. And I think there's also been a
Speaker 2: lot of frustration with the bank's repeated failures on economic forecasting,
Speaker 2: a point highlighted in last year's review of the RBA.
Speaker 2: So at the end of this week, while Jim Chalmers
Speaker 2: is busy insisting that his relationship with Michelle Bullock is
Speaker 2: going just fine, up pops an analysis piece on the
Speaker 2: ABC's news website. That piece by the ABC's Jacob Grieber
Speaker 2: quoted a senior labor figure describing Michelle Bullock as a
Speaker 2: nutter and the RBA board as barbarians and weirdos in
Speaker 2: the thrall of a bizarre group think. And I think
Speaker 2: once that piece came out, well Peter Dutton saw an
Speaker 2: opportunity to blow up these reforms, and the coalition's shadow
Speaker 2: Cabinet met on Monday and agreed that they would pull
Speaker 2: out of any deal with the government on splitting the
Speaker 2: RBA board into two.
Speaker 1: Okay, So is what we're looking at here, Jason, a
Speaker 1: case of when politics gets in the way of policy,
Speaker 1: Because it seems like there was a lot of good
Speaker 1: faith negotiation when it came to these reforms. Labor was
Speaker 1: making concessions, including around this fear of board stacking that
Speaker 1: the coalition had, and it seemed like there was a
Speaker 1: strong possibility of a deal. But then the politics changed
Speaker 1: and the criticisms of the Reserve Bank got louder, and
Speaker 1: the Coalition, it seems, saw a political opportunity.
Speaker 2: I think that's absolutely the case, and what we saw
Speaker 2: last week was the Coalition walking away from the very
Speaker 2: reforms it had worked very hard on and agreed to
Speaker 2: with the government. I think it's fair to say that
Speaker 2: Jim Chalmers and his office were absolutely furious at the
Speaker 2: decision by Angus Taylor and the Coalition to blow up
Speaker 2: these reforms.
Speaker 3: The position that has been reported from the Coalition is irresponsible.
Speaker 3: It's disappointing, but it's not especially surprising given Peter Dutton's
Speaker 3: pathological negativity and Angus Taylor's weakness.
Speaker 2: Yeah, as one labor saucer was close to Jim Charmers
Speaker 2: put it to me, Angus Taylor was putting the national
Speaker 2: interest last and all for the chance to gain the
Speaker 2: advantage during a one parliamentary sitting week. In the view
Speaker 2: of one labor source I spoke to, that made Angus
Speaker 2: Taylor a clown.
Speaker 1: Okay, so where does this leave the treasurer Then, when
Speaker 1: it comes to getting these reforms.
Speaker 2: Through, well, Jim Chalmers is in a difficult position because
Speaker 2: the only way he can get these reforms through now
Speaker 2: is to negotiate with the Greens and the cross Bench.
Speaker 2: But even if he does get agreement from the Greens
Speaker 2: and the cross Bench on these reforms to the bank,
Speaker 2: he won't have the agreement of the coalition, and he
Speaker 2: won't have that bipartisan support for long lasting changes to
Speaker 2: the Reserve Bank. The idea that charmers would try to,
Speaker 2: as Angus Taylor puts it, sack and stack the board
Speaker 2: with friendly faces doesn't really make sense because the term
Speaker 2: of the appointments to that new interest rate setting board
Speaker 2: would be for five years, so that's not just beyond
Speaker 2: the next election, but beyond the election after that. This
Speaker 2: was done purely for the short term political interest, not
Speaker 2: that the long term national interest. Perhaps the coalition thinking
Speaker 2: was in a similar way that Tony Abbott when he
Speaker 2: was Opposition leader, was always trying to create chaos. The
Speaker 2: more chaos, the worse the government looks. Blowing up the
Speaker 2: reforms to the Reserve Bank is probably something in that vein.
Speaker 2: It's making the government look as though it can't get
Speaker 2: its agenda through the parliament.
Speaker 1: Jason, thank you so much for your time.
Speaker 2: Thanks Rby, great to talk with you.
Speaker 1: Also in the news today, former US President Donald Trump
Speaker 1: has survived an apparent assassination attempt at his private golf
Speaker 1: course in Florida. During a security check of the area,
Speaker 1: secret Service agent spotted a fifty eight year old male
Speaker 1: suspect hidden amongst the bushes holding an assault rifle. The
Speaker 1: man fled the scene, but was later arrested and paced
Speaker 1: into custody. And Australians have experienced a record number of
Speaker 1: data breaches in the first half of twenty twenty four.
Speaker 1: Between January and June this year, the Office of the
Speaker 1: Australian Information Commissioner was notified of five hundred and twenty
Speaker 1: seven data breaches, the highest in three and a half years.
Speaker 1: Malicious and criminal attacks were behind two thirds of the breaches,
Speaker 1: with the majority of them described as cybersecurity incidents and
Speaker 1: Ruby Jones this is seven am. Thanks for listening.