Document dated Nov. 29, 2024, received from AST GVT Dec. 5, summarized Dec. 9.
In Dec. 2024, AST GVT made appointments to AST CB's 2 new boards, see #237322.
On Nov. 29, AST PRL issued bill to amend law regarding AST CB.
AST PRL introduced Treasury laws amendment (reserve bank reforms) bill 2023, which is a bill for an act to amend the law in relation to AST CB, and for related purposes.
In addition, AST PRL published an explanatory memorandum in relation to the same.
Follows AST GVT Nov. 2023 said it will issue bill on reforming AST CB, see #192609.
Overview of Amendments
Bill amends the acts mentioned above to implement AST GVT's response external review titled An RBA fit for the future; the amendments strengthen the AST CB's governance framework, monetary policy framework, structures as well as systems.
The bill establishes a separate Monetary Policy Board and Governance Board and reinforces the independence of the AST CB in the operation of monetary policy.
Further Detail
Amendments replace existing AST CB Board with a new Monetary Policy Board and Governance Board; Monetary Policy Board is responsible for the monetary and financial system stability policies of AST CB; Governance Board is the accountable authority.
Governance Board determines policy of AST CB re matters relevant to functions of AST CB but not within the remit of the Monetary Policy Board or Payments System Board.
The Payments System Board continues to set policy in relation to payments system.
Amendments modify the legislative objectives for monetary policy, to clarify the accountabilities of AST CB; amendments also remove AST GVT's power to override AST CB decisions, and remove AST CB's power to determine the lending policy of banks.
Commencement and Costs
Bill proposes for the amendments to commence on the later of the first day of the next calendar month following the end of the period of 3 months starting on the day after Royal Assent; and Jul. 1, 2024; bill partially implements AST GVT's response above.
The changes will have a financial cost for the AST CB, which it will manage through its internal budget; this includes the remuneration of additional statutory appointees.
Explanatory memorandum states bill does not have any impact on compliance costs.
Next Steps
Bill will follow the required legislative process; second reading moved Nov. 29, 2023.
Dec. 2023 Referral for Inquiry and Report
On Dec. 7, 2023, AST PRL saidSenate referred Treasury laws amendment (Reserve Bank reforms) bill 2023 (provisions) above, re reforms to AST CB, to a committee for inquiry and report by Mar. 21, 2024; committee invited people to make submissions.
Closing date for submissions is Feb. 2, 2024.
Document dated Dec. 7, 2023, received from AST PRL Dec. 10, summarized Dec. 13.
In Feb. 2024, AST CB said Woods appointed to newly created COO role, see #202210.
Feb. 2024 Hearing
On Feb. 22, 2024, AST CB published the Hansard transcript of the senate economics legislation committee hearing relating to the reserve bank reforms bill detailed above.
Document dated Feb. 22, 2024, received from AST CB Mar. 14, summarized Mar. 18.
Aug. 15, 2024 AST GVT Interview on Reform Timing
On Aug. 15, 2024, AST GVT issued Michelle Grattan's interview with Treasurer Jim Chalmers on The Conversation podcast, includes discussion of AST CB reform timing.
Chalmers said there are still a couple of issues being worked through re the bill above.
He also said he is working towards a bipartisan outcome; hopefully can progress things quite soon and get it finished so that the changes can come in at the start of 2025.
Aug. 23, 2024 AST GVT Additional Interview
On Aug. 23, 2024, AST GVT issued Jacqueline Maley's interview with Treasurer Jim Chalmers on Inside Politics podcast, where he commented further on AST CB reforms.
Maley asked a question with respect to AST CB governance, and he responded by stating there are outstanding issues around s 11, which is AST PRL's override power.
AST CB Governor has said she would like there to be continuity on both of new boards, not just on one board; he takes that view from AST CB Governor very seriously.
In addition, he explained that AST GVT is having discussions with Shadow Treasurer to see if the AST GVT can come to some kind of acceptable resolution about that point.
Sep. 2024 AST GVT Press Conference, Interview
On Sep. 10, 2024, AST GVT issued press release with respect to timing of passage of legislation to reform AST CB; and related interview with Sarah Ferguson of 7.30, ABC.
In Sep. 2024, AST GVT issued summing up speech, re AST CB reforms, see #225774.
Nov. 29, 2024 AST GVT Joint Press Conference
On Nov. 29, 2024, AST GVT published a transcript of a joint press conference in Canberra, as well as opening remarks by the Treasurer The Hon Dr Jim Chalmers MP, which include discussion of various legislative matters, like reform to the AST CB.
Chalmers said AST CB reforms come into effect 3 months after royal assent, which will ideally be as soon as possible; anticipating changes apply after AST CB's Feb. meeting.
He said first class, first rate people will be appointed to both of the new boards of AST CB; expectation is that the new board would be constituted after the Feb. meeting.
