Reserve Bank governor Philip Lowe has defended his right to privacy when justifying his attendance at a private lunch where he briefed bankers just two days after the central bank flagged more interest rate rises.
The meeting was hosted by investment bank Barrenjoey and took place on Thursday February 9, two days after the Reserve Bank (RBA) lifted interest rates for the ninth time and promised more, catching investors unaware.
Shortly after the meeting, bankers moved to correct their footing in the bond market, leading to a sell-off in bond futures contracts and a rise in bond yields.
When he appeared at Senate estimates on Wednesday, Lowe said the series of events were nothing more than a coincidence, insisting there was “nothing untoward” about his interactions with representatives of the big four banks.
It was “appropriate” he was there and he needs to “hear what financial markets say” to avoid living in a “bubble”. He then took aim at leaks to the financial press about the lunch, which he suggested undermines “confidence”.
“In general, and for many, many years, I have been able to have these and other meetings with the understanding of all participants that people in the meeting don’t run to the press straight afterwards,” he said.
“If you’re meeting with me, you want to have confidence that I’m not going to go to the press or tell other people what you’ve said, and I expect the same courtesy.”
The line of questioning was brought on by Liberal Senator Andrew Bragg on behalf of Labor MP Jerome Laxale, for whom Bragg said it was “an urgent issue”.
Laxale and others are sceptical of the nature of the meeting, as Lowe faces renewed criticism for the central bank’s opaque approach to monetary policy.
On Sunday, Treasurer Jim Chalmers said he thought “there’s a broader issue here” about how the RBA “communicates the context for its decisions”. The Labor government ordered a review of the bank when it took government, the findings of which will land next month.
“This is one of the things that I’ve been discussing with the RBA review panel — how they communicate their decisions and the context behind their decisions is one of the key focuses of that,” Chalmers told the ABC.
The review, Chalmers indicated, was likely to emerge as a referendum on whether or not Lowe would be offered another term as governor. There is an expectation in Canberra, however, that Lowe isn’t likely to last beyond September.
Four Labor MPs — Laxale, Rob Mitchell, Julian Hill and Graham Perrett — have grown increasingly critical of the RBA leadership after sustained rates tightening, as households face rising cost-of-living pain.
Greens Senator Nick McKim, a critic of Lowe who called for his resignation after last week’s rate rise, asked what measures were being taken to hear from “renters and mortgage holders” in pain as a result of interest rate rises.
“How do you make sure that you factor those matters into your decision-making at the appropriate level, compared to big business and banks who are just interested in making money?” McKim asked.
Lowe said it was a “very good question” and pointed to a recent meeting with the Australian Council of Social Service, but maintained that rising rates remained the best path towards tackling inflation and getting “on top of this”.
“It’s not a nice message, but that’s the reality we face and we have to face into that reality,” he said.
Is there such a thing as a free lunch? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Geez, guys! It was just a ham sandwich and a glass of Toohey’s! Why the fuss?
For some weird reason some Australians seem to think that the Governor of the Reserve Bank should be above politics and cognisant of the effect of monetary policy on the average Joanne Bloggs, woman-in-the-street.
One mustn’t forget that Mr Lowe, like all the members of the Board of the Reserve Bank, climbed the greasy pole of finance and elbowed out of the way all the other financial sector opportunists who also aspired to a well-paid gig with a nice little honorarium attached to it before finally ascending to the dizzy heights of Head Boy in the money sector.
He owes fealty only to his fellow money-grubbers, certainly not you or I.
Get real, people. We don’t count when money is being counted.
i haven’t heard about Lowe lunching with representatives of the mortgagee class, so he can hear what they have to say, thereby avoiding ‘living in a bubble’.
when, oh when, oh when will these high-priced muppets understand – you can’t just say you’re doing the right thing, you have to be seen to be doing the right thing … or at least, not be seen (by us poor dupes who pay them) to be doing something that looks dodgy AF
Lowe’s protestations remind me of the classic police line:
“Nothing to see here! Move along.”
Except delivered by Frank Drebin, or Chief Wiggum
God I loved Frank Drebin
Tarring and feathering Lowe might be fun and easy work for a lot of the media, but I think they really need to get away from playing the man and actually look and analyse the economic factors at work here. 7.30 actually started veering in the direction last night, hopefully some others might also follow the lead.
Yes. I don’t understand monetary policy (I don’t think anyone does) but ever since the global deregulation of the finance industry (and especially since the GFC of 2007-2008), capitalism has ‘worked’ only because it’s been given increasingly large doses of financial amphetamines (governments pump-priming their economies by printing money). The high was good while it lasted but it can’t last forever without increasing inflation.
I’d like to think there are more socially equitable ways of correcting these inflationary pressures (inflation is a bugger for everybody) than mortgage increases and depressing the economy (ie, throwing people into unemployment). ?Significant ‘budget repair’ levies on the rich, including companies profiting obscenely from the situation?
What has he done that’s illegal or that none before him has done?
Not illegal at all. All he did was give a briefing containing publicly available information. Lowe is many things but he is certainly not stupid enough to provide information that isn’t publicly available.
Really, a meeting with the banks days before announcing rate variations . What do you think they discussed , the first race at Randwick on the coming Saturday. He claims that he needs to get feedback on what is going on , but did not bother to contact the public who are the recipient of his interest rate increases. Lowe is supposed to be fighting inflation yet the RBA is the largest INFLATOR in Australia , over 60% increase in interest rates in 9 months . What was our inflation rate again. Does he really think that such an increase in interest rates wont fuel more inflation. He needs to leave the building.
Would he deign to sit and talk with age pensioners, those on job seeker (what an annoyingly stupid title), veterans or disability, the people who are carrying the burden for his keeping the rich rich dumb act? NO, he’ll regret their plight but do sod all to help them get out of what he caused them to be in. I like cereal but not for more than breakfast.