Macro-Economist Bruce Preston Appointed to RBA Interest Rate Board
Treasurer Jim Chalmers has appointed highly respected macro-economist Bruce Preston to the interest rate-setting board of the Reserve Bank of Australia (RBA). This significant appointment is intended to enhance the board's technical expertise.
Professor Preston, an economics professor at the University of New South Wales, brings a wealth of experience, having previously served as a Treasury and RBA official. He is set to join the RBA board in March, taking over from Alison Watkins. His selection came from a shortlist prepared by a distinguished panel, including RBA Governor Michele Bullock and Treasury Secretary Jenny Wilkinson.
"Professor Preston is a highly respected and experienced macro-economist," stated Treasurer Jim Chalmers.
Background on RBA Board Changes
This latest appointment aligns with the recommendations of an independent review of the RBA, which concluded in 2023. A key outcome of the review was the recommendation for two distinct boards within the central bank: one dedicated to corporate governance and another specifically for setting interest rates.
Reviewers specifically highlighted the need to inject more technical monetary policy expertise into the rate-setting board, noting its previous emphasis on corporate backgrounds. Professor Preston marks the second academic appointed to the board since the review, following Renee Fry-McKibbin, who was notably an author of the review itself. The appointment also involved consultation with Shadow Treasurer Ted O'Brien.
Professor Preston's Prior Work and Views
Professor Preston's extensive academic work is primarily centered on central banks and their crucial role in managing inflation expectations. Notably, in 2020, he published a paper critiquing the RBA's transparency and communication strategy, advocating for clearer benchmarks to assess its performance. During the COVID-19 pandemic, he also authored articles in support of the JobKeeper stimulus package.
Looking ahead, Mr. Chalmers will have his next opportunity to appoint a board member in August, upon the conclusion of economist Ian Harper's term.