Australian central bank reforms stall as Greens call for rate cuts By Reuters

SYDNEY (Reuters) – The Reserve Bank of Australia’s (RBA) long-delayed reforms faced another setback on Monday, as Greens MPs asked the Labor government engineer an interest rate cut in exchange for their support for the legislation .

In a statement, the Greens said they would not pass Labour’s RBA reforms until interest rates were cut.

“The Reserve Bank should cut interest rates tomorrow, and if they don’t, the Treasurer should use his existing powers to cut interest rates and ease the pressure on mortgage holders,” the Greens said.

The RBA will decide on its next policy move on Tuesday after interest rates have been unchanged at 4.35% since November. Policymakers have all but ruled out an interest rate cut this year as inflation has remained sticky, angering borrowers.

The reforms, which were recommended by an independent review last year, included the establishment of a separate governing board to complement the current monetary policy board.

The nine-member rate-setting board would still have six outside members, which the Liberal-National opposition said could be used by the ruling Labor Party to include appointees friendly to the current government.

Just two weeks ago, the Liberal-National coalition opposed the reforms, meaning Treasurer Jim Chalmers would need the support of Greens or independent MPs to legislate the changes.

Finance Minister Katy Gallagher said the Greens were “out of control”.

“We’re not going to work with it because it’s crazy. It’s economically irresponsible and we’re not going to do it,” Gallagher said in an interview with ABC Radio.

Political infighting means reform legislation remains in limbo, maintaining the status quo at the policy-making board.

The RBA has already adopted some of the recommendations in the review, including holding fewer but longer policy meetings and holding a press conference after each decision.

However, he is undecided about others, including having all council members make regular appearances to discuss their thinking on policy.