Reserve Bank boss Philip Lowe to learn in weeks if he will keep top job after brutal poll

RBA Governor Philip Lowe will discover his fate in mere weeks after a brutal poll revealed more than half the country wants him booted out of the top job.

Dr Lowe has faced heavy scrutiny for raising interest rates 12 times over the past 13 months, creating unbelievable financial pressure on mortgage holders. 

The most severe criticism of the Reserve Bank governor came from when he stated in 2021 that interest rates would remain at an all-time low of 0.1 per cent.

Dr Lowe, who have served as the country’s top central banker for seven years, will have his term reviewed when it ends in September.

But federal treasurer Jim Chalmers has revealed he will announce whether Dr Lowe will stay in his position or if a new governor will be appointed next month.

‘My intention is to come to a concluded view on the RBA Governor and announce that in July, but certainly before the Parliament returns – that’s always been our intention,’ Dr Chalmers said on Thursday. 

‘The current term of the RBA Governor ends in September. We’ve said for some time that we’ll consider that appointment around the middle of the year, it’s now around the middle of the year.’

Dr Chalmers said it was a ‘big call’ to make and that he was in the ‘process of consulting with my Cabinet colleagues and with others’.

‘And so, we’ll work through it in the usual methodical and considered way,’ he said.

‘My intention is to come to a view in the coming weeks, ideally to announce the outcome of that in July, but certainly before the Parliament returns.’

The treasurer reiterated his position about ‘finalising a view’ on Dr Lowe’s tenure  next month when he was interviewed on the ABC’s Radio National.

He told host Patricia Karvelas that he thought of Dr Lowe in ‘very high regard’ as he had a difficult job to do, and stressed that there was no suspected rift between the government and the central bank over rate hikes.   

‘The point that I was making is that I cherish the independence of the Reserve Bank,’ he said.

‘I’ve made that clear on multiple occasions. I think it’s an important feature of our system.’

‘And part of that means that I explain and defend the decisions that I take in fiscal policy and the Governor and the Board explain and defend the decisions that they take on monetary policy, and that’s appropriate.’

Interest rates are at an 11-year high of 4.1 per cent, with monthly variable mortgage repayments already 58 per cent higher than they were little more than a year ago. 

Federal Treasurer Jim Chalmers (pictured) will announce whether Dr Lowe will keep his position as head of the central bank or appoint a new governor next month

Interest rates are at an 11-year high of 4.1 per cent, with monthly variable mortgage repayments already 58 per cent higher than they were little more than a year ago (stock image)

It comes after a poll by Nine newspapers released last week found 52 per cent of respondents think Dr Lowe should lose his $1million a year job as governor.

Only 17 per cent of the survey’s 1,600 respondents said Mr Lowe’s term should be extended. 

If Philip Lowe’s term isn’t extended, he’d be the shortest serving governor since Bernie Fraser’s tenure ended in 1996.

Mr Fraser was the governor who presided over 18 per cent interest rates in November 1989 and was the last governor whose rate rises led to a recession.

The 1991 recession was the last caused by aggressive rate hikes. It was another 29 years before the 2020 recession covering the summer bushfires and Covid lockdowns.

Westpac, NAB and ANZ are expecting two more rate hikes that would take the cash rate to a 12-year high of 4.6 per cent, up from an 11-year high of 4.1 per cent now.

AMP chief economist Shane Oliver has said rate rises risk tipping Australia into a recession.