The Australian government has decided to introduce Reserve Bank Australia (RBA) legislation in parliament. The federal government of Australia will introduce legislation to Parliament to reform, strengthen, and modernize the RBA.
It comes after months of consultation, including with the Reserve Bank of Australia, the Opposition, and other stakeholders since the RBA Review was published in April 2023.
What does Treasurer Minister Jim Chalmers say about RBA legislation?
Treasurer Minister Jim Chalmers has confirmed that the government will table the legislation this week to strengthen the RBA. It follows the comprehensive changes of the central bank.
Minister Jim is ready to lose his power to reverse the interest rate decisions of RBA. He plans to use new legislation to eliminate the authority of the Treasurer to overrule decisions of monetary policy.
RBA will also establish a Monetary Policy Board and a separate Governance Board as part of the legislation. These reforms are in response to RBA’s review published in April 2023.
The first published 294-page review of RBA in April is one of the most significant shake-ups in the Reserve Bank of Australia’s history.
The Report has the title “An RBA Fit for the Future” and makes 51 recommendations to the bank. Jim stated in April that the Federal government of Australia had agreed in principle with all these recommendations.
The Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 strengthened the independence of the Reserve Bank defining its role and modernizing its structure.
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