One of the most important characteristic of a good national Treasurer is the need to be a good gambler and take a punt on whether you can raise taxes and not lose enough votes to see your team back on the Opposition benches in Parliament House.
Treasurers have to gamble on important people such as the Secretary of Treasury, and right now Dr Jim Chalmers’ current big decision on who’ll replace Dr Phil Lowe is a case in point.
Dr Phil looks like a gonner, with the AFR’s John Kehoe looking at who the contenders for the RBA’s top job are. Predictably, his Deputy Governor Michele Bullock looks like a frontrunner.
Michele Bullock has been a leading light at the RBA for decades and as an economics and markets commentator, I’m very aware of her work. Hailing from Armidale and gaining a Bachelor of Economics (Hons) at the University of New England (UNE) and a Master of Science from the London School of Economics, she has worked for the RBA her whole life! And it has worked out well for her, being the first female deputy of the Big Bank in its 62-year history. She certainly has the credentials to take this prestigious and crucially important job.
Ms Bullock looks like the favourite if Dr Phil is shown the door, which many expect. She has the credentials — both academic and experience-wise — and Kehoe hints that the Treasurer is a Bullock fan.
In a recent speech, Ms Bullock warned that to beat inflation, unemployment would have to go to around 4.5%, which is a lot higher than the 3.6% we have today. It would mean about 630,000 people out of work or about 118,000 extra Aussies would be on the dole queue. Frankly, that looks a little optimistic but I hope she’s right.
Kehoe says Department of Finance Secretary Jenny Wilkinson is also in the mix to become Governor. And the likes of former rock star RBA banker Guy DeBelle is considered a chance, as is Ms Wilkinson’s husband, Chief Statistician David Gruen, along with former Treasury Secretary Martin Parkinson and the current head honcho in Treasury, Steve Kennedy.
Who Dr Jim selects gets down to experience at the RBA versus whether we need an outsider. Given there is a belief that the RBA, from the infamous “rates won’t rise until 2024” call of Dr Phil’s, which wasn’t corrected by his board, to what is seen by some economists as an excessive amount of rate rises that could push us into an unnecessary recession, maybe a newbie could be the right play.
That said, Michelle Bullock has the runs on the board. If she is given the right board to advise her, question her and have the courage to be an objective contributor to the Governor’s decisions on interest rates, then we should have a safe pair of hands to run the policy that is vital for so many borrowers and their great Australian dream.