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New RBA board line up revealed

Treasurer Jim Chalmers has revealed the two members that will be added to the new monetary policy board when the historic RBA split takes effect next year.

By Harry O'Sullivan

First published on 16 Dec 2024

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Economics professor Renée Fry-McKibbin and ex-Bendigo Bank CEO Marnie Baker will be on the new interest rate setting board from March next year.

That means the pair are set to help decide whether the cash rate will be cut at the 1 April monetary policy meeting.

RBA governor Michele Bullock said she looked forward to working with the new appointees.

"Their expertise and insights will be vital as we continue our efforts to bring inflation back to target," she said in a statement on Monday.

Treasurer Jim Chalmers called Ms Fry-McKibbin and Ms Baker "first rate, first class additions" to the central bank's decision-making suite, but shadow treasurer Angus Taylor said the board should remain as is.

"We have always been concerned [Dr Chalmers'] primary strategy here is to sack and stack the board to politicise the Reserve Bank," he told Sky News.

With the federal election to be held on or before 17 May, a rate cut on 1 April would likely come at a good time for the government.

The suggestion the new pair are Labour plants is purely speculation though, with Ms Fry-McKibbin one of twelve economists to write an open letter to Dr Chalmers in 2022 urging him to respect the RBA's independence during the review process.

Early rate cuts locked in?

Aussies struggling with home loan repayments might be hoping the new RBA appointments will argue to nudge the cash rate lower sooner rather than later.

The latest research from Roy Morgan found 28.3% of mortgage holders in Australia are at risk of mortgage stress.

While that number has been gradually falling since June, it remains at levels not seen since around 2011 – the last time the cash rate sat at 2024 levels.

More than a million Aussies are still considered 'extremely at risk' of mortgage stress.

Most experts agree rate cuts are likely by the middle of 2025 but the exact timing remains uncertain.

In the wake of its most recent monetary policy decision, the RBA board said it was "gaining some confidence" that inflation is moving sustainably towards target.

The December quarter CPI inflation numbers, set for release January 29, will likely be the most significant determinant of the first two monetary policy decisions next year.

CommBank economists are still predicting the RBA will cut in February but note risks skew towards a later start to the easing cycle, while those at NAB, ANZ, and Westpac are officially all saying May is the likeliest start date.

As of 13 December, the RBA ASX rate tracker put the chances of a February cut at 62% based on trading activity.

New look RBA

The revamped board was one of several recommendations from last year's enquiry into the Reserve Bank, which also recommended the new schedule in which the board meets eight times per year instead of eleven.

As it stands the RBA board is made up of nine board members, three executive and six non executive.

This will remain the case until March when the board will be split into two – one to make monetary policy decisions and the other to manage the internal operations of the RBA.

The three executive members will be on both boards.

Current non executive members Telstra director Elana Rubin and businesswoman Carol Schwartz will shift to the governance board, where they will join four new members including former Telstra boss David Thodey.

Here's the expected make up of both boards:

RBA executive members

Michelle Bullock (chair)
Andrew Hauser (deputy chair)
Stephen Kennedy (secretary to the treasurer)

Monetary policy board members from March 2025

Ian Harper (economist)
Carolyn Hewson (former executive)
Iain Ross (former judge and trade unionist)
Elana Rubin (director)
Renée Fry-McKibbin (economics professor)
Marnie Baker (former Bendigo Bank CEO)

Internal governance board members

Carol Schwartz (director)
Elana Rubin (director)
David Thodey (former Telstra CEO)
Danny Gilbert (corporate lawyer)
Jennifer Westacott (executive)
Swati Dave (former CEO, director)

Image courtesy of the RBA

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Harry O'Sullivan

Harry joined Savings in November 2022. With a degree in economics from the University of Queensland, Harry is interested in topics such as inflation and GDP, and is passionate about keeping Australians informed on the external factors that impact their personal finances.

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New RBA board line up revealed

Early rate cuts locked in?