Treasurer Jim Chalmers is today set to release the independent review of the powers that the RBA hold, including setting interest rates, in the biggest move in power to Australia’s monetary and economic policy settings in a generation.

The RBA board will be instead replaced with a board of monetary policy experts, and bring the RBA in line with other international peers.

Under the reforms, once stripped of the power to set interest rates, the panel of monetary policy experts will meet eight times a year, instead of eleven and will look at ‘more in-depth discussions including of the forecast, strategy, and other monetary policy issues.

Jim Chalmers has released the review of the RBA today, and has also stated it would commit in-principle to its recommendations.

‘Australia faces a complex and rapidly changing environment, and we need the most effective central bank and monetary policy framework to meet current and future economic challenges’ he said.

It will be extremely interesting to see how the public react to this news, given the current distrust in the RBA, particularly after comments from Governer Phillip Lowe throughout the pandemic and post, where he stated on public record numerous times that rates would not be moving until 2024 to keep the economy stimulated.

The review was completed by three panelists, Professor Renée Fry‑McKibbin; Carolyn Wilkins, an external member of the Bank of England’s financial policy committee and former deputy governor of the Bank of Canada; and Gordon de Brouwer, a secretary for public sector reform – and is the first external review of our central bank and the operation of monetary policy in four decades.

What do you think about these changes and how will this affect our economy moving forward?