The Coalition Abandons RBA Reform Plans
The Coalition has abandoned its plan to split the Reserve Bank board in two, despite previously supporting the idea in principle. This decision comes after months of negotiations with the government failed to reach a bipartisan agreement.
The Coalition's change of heart stems from concerns that the government would "stack" the new board with Labor-aligned appointees. This suspicion arose after Treasurer Jim Chalmers made two appointments to the existing board that were seen as favorable to Labor.
The Coalition's decision leaves the government with the only option of seeking support from the Greens and other Senate crossbenchers to pass the bill. However, the Greens have demanded intervention to force the Reserve Bank to cut rates, a condition that the government is reluctant to accept.
The Coalition's decision has also drawn criticism from the government, which accused the opposition of planning spending cuts. Senator Jane Hume, the Coalition's finance spokesperson, has said that the Coalition would undo "any wasteful or unnecessary or undisciplined spending that is pushing inflation further." However, she has also said that the Coalition would not cut key social spending, such as the Age Pension.
The government has disputed the Coalition's claims, arguing that the $315 billion figure cited by Senator Hume includes the government's indexation of the Age Pension. This, according to the government, shows that the Coalition is opposed to increasing the Age Pension.
The Coalition's decision to abandon its RBA reform plans is a setback for the government, which had hoped to pass the legislation with bipartisan support. The government will now need to find a way to secure the support of the Greens and other crossbenchers if it wants to pass the bill.