Reserve Bank of AustraliaPhilip Lowe rejects criticism from Liberal Tim Wilson, saying payment affects labour supply and spending in the economy
Australias unemployment payment affects labour supply and spending in the economy, the Reserve Bank governor has argued, in defence of his comments the rate should be permanently raised.
Dr Philip Lowe was well prepared to defend his public comment that the jobseeker rate should be permanently raised above its pre-pandemic level of $40 a day, after he was publicly criticised by Liberal MP Tim Wilson for overstepping his mandate.
On Friday, Wilson used Lowes appearance at the economic committee hearing to probe him on what he believed were the limits of his role.
Lowe came with notes.
Well, thats a very good question and one that I think about a lot at these hearings, he said.
Reserve bank governor warns against lowering jobseeker payment
The committee has asked me a lot of questions that are not related to monetary policy.
Over the past year, Ive been asked about superannuation, which has got me into trouble, Ive been asked about industrial relations, about innovation policy, wages policy, Ive been asked about corporate tax, the GST, land tax.
And I try consistently to answer those questions as best I can, drawing on the knowledge that I have, with explicit recognition that these are not my areas of responsibility.
But you, as the oversight committee of the Reserve Bank, ask me those questions, and I do my best to answer them, where theyre relevant to the economic situation the country finds itself in.
Lowe said he attempted to avoid placing himself in the middle of a political disagreement but he believed the unemployment payment fell within his mandate.
The issue of the rate at which we assist people who are on unemployment, it is relevant to the economic questions we face.
It affects labour supply, it affects spending in the economy. And the way that we assist unemployed people affects the way they participate in the society and the economic system.
So I think that is relevant to my mandate.
Lowe said his comments were in line with the general consensus, from social service advocates to business lobbyists.
Wilson challenged him again, saying Lowes previous comments on issues including superannuation had been in the context of what is the logical economic consequences of different decision making associated with it, whereas his comments on jobseeker were a personal opinion.
Lowe says all the views he articulates are really my views as the governor of the bank.
Not every position I would have articulated would have been shared by all my colleagues, but we dont sit around at the Reserve Bank and say, lets get a position on this issue and on that issue.
Youre asking me, as the governor of the bank, to answer these questions and I do my best to answer them where theyre relevant to the economic performance of the country, he said.
He said he always tries to answer questions put to him by the committee if theyre relevant to the economy and not get caught in a political argument but acknowledged he had upset both sides of parliament at times.
When Lowes position has aligned with government policy, government MPs have been happy to champion his comments, using it as validation of a proposals merit.
The banks leaders repeated their stated focus for the coming year was to focus on employment, rather than inflation, with no plans to lift the targeted cash rate until unemployment dropped to below pre-pandemic levels.
Greens MP Adam Bandt probed leaders on the banks preparation to include climate policy and the transition to renewable energy in its financial outlooks. He asked whether one of those potential scenarios was Australias key thermal coal trading partners pulling themselves out of thermal coal by 2030, as they sought to meet their own emissions reduction targets.
The deputy governor, Guy Debelle, said the bank was working on different scenarios, including looking at potential demand for energy during transmissions to new power sources, and expected to share its assessments later this year, as we learn more and as the circumstances change.
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