Michele Bullock to become next RBA governor

The Federal Government has announced that Michele Bullock will replace Philip Lowe as governor of the Reserve Bank of Australia. She will be the ninth governor and the first woman appointed to the role in the central bank’s 62-year history. Treasurer Jim Chalmers said in a press conference today that Ms Bullock will take on the role from September 18 following a consultative process with cabinet, the business community and the opposition.

The news that Philip Lowe will step down comes after 14 months and 12 interest rate hikes that have taken some borrowers off guard. However, Mr Chalmers was careful to thank Dr Lowe for his work over a long career.

“We thank Phil Lowe for more than four decades of dedication and commitment and service to the country,” Mr Chalmers said. “He goes with our respect and gratitude and dignity. I have really valued my working relationship with Phil. He is a terrific guy and he has handled himself impeccably.”

While most central banks around the world failed to predict the persistent inflation rises, most analysts point to Dr Lowe’s messaging around potential interest rate increases as sealing his fate. Prior to the rises in the cash rate that started in May 2022, Dr Lowe had told borrowers that interest rates would remain steady until 2024, leading many to believe that it was a safe time to borrow. Instead, repayments for an average mortgage have risen by $1,264 since increases began. At least 25 percent of mortgage holders are now believed to be experiencing  mortgage distress.

Speculation has been rife for weeks now that Dr Lowe’s tenure would not be extended and three front runners had emerged including Treasury secretary Steven Kennedy and Finance Department secretary Jenny Wilkinson. However, Opposition Leader Peter Dutton said he would not support candidates with close ties to government. Ms Bullock is perceived as a more independent choice. Mr Chalmers described the Michele Bullock as a “first class economist”.

“This is the right call but it is not an easy call,” he said. “This is one of the most important appointments that we will make as a government,” he said.

Prime Minister Anthony Albanese described Ms Bullock as “imminently qualified”.

“Michele Bullock is an accomplished economist with wide experience at the Reserve Bank,” he said. “I very much congratulate Michele Bullock on this appointment.”