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Finance Minister Katy Gallagher has criticised the Greens for demanding a cut to interest rates by the Reserve Bank of Australia (RBA) — or through intervention from the treasurer.
Ahead of a two-day RBA meeting, the party said it wouldn’t support the government’s until rates were brought down.
If this doesn’t happen, it said Treasurer Jim Chalmers should “use his existing powers” to cut them.
“For weeks, the treasurer has acknowledged the economy is being smashed, and that mortgage holders are being smashed by high interest rates — yet to date, he’s done nothing about it despite having the power to reduce interest rates,” Greens senator Nick McKim said in a statement on Monday.
“The Greens won’t support these reforms until either the RBA cuts interest rates or Dr Chalmers forces them to.”
While the federal government has the ability to step in and overrule the RBA, such powers have never been used.
Prime Minister Anthony Albanese, asked about the RBA and working with the Greens in a minority government if that was the outcome of the federal election, said he was “confident” of forming a majority and criticised the Coalition and the Greens.
“They don’t talk about the environment any more. They talk about some extreme agenda. They seek to divide, and they have that in common with Peter Dutton’s Liberal Party, who are always seeking division, not seeking unity or not seeking to bring Australians together,” he said.
Meanwhile, Gallagher said the Greens’ idea was “all politics”.
She told reporters: “The Greens are just crazy.
“They suggest that we do the job of the RBA, basically remove its independence, cut interest rates, and then they’ll pass a bill that strengthens its independence.”
Greens senator Nick McKim is challenging the treasurer to intervene in the RBA’s decision-making process. Source: AAP / Mick Tsikas
The RBA is responsible for contributing to Australia’s financial stability and setting monetary policy, including interest rates.
It’s facing a major overhaul following an independent review released last year.
Among the recommendations accepted by the government is a move to strip the current RBA board of its power to set interest rates, instead allocating the responsibility to a separate board.
The review also recommended the government remove the power of the treasurer to overrule the RBA’s decisions. But Chalmers has said he will no longer proceed with this.
“We are prepared to limit the parliament’s override powers to emergency situations, to rare instances,” he said late last month.
Speaking on Monday, Gallagher said the Greens were “teaming up with the Liberal Party”.
“I think it’s [Opposition leader] Peter Dutton and [Greens leader] Adam Bandt working together to frustrate sensible challenges that are in the long-term interests of the country,” she said.
McKim said the Greens were “consciously and deliberately putting the RBA in the centre of political debate”, and that the central bank’s board was not “above criticism”.
“Both the treasurer and the Reserve Bank governor have said they want this legislation passed. Now they know what they have to do to get it done,” he said.
The Australian Securities Exchange’s RBA rate tracker puts the chance of a rate cut at the central bank’s board meeting this week