The Coalition’s Angus Taylor says the long-standing inflation target of 2-3 per cent should not be adjusted by the Albanese government’s review of the RBA.
Shadow treasurer Angus Taylor says the long-standing inflation target band of 2 per cent to 3 per cent should not be adjusted by the Albanese government’s review of the Reserve Bank of Australia., Mr Taylor has written to the Treasurer requesting a bipartisan approach to avoid potential politicisation of the independent central bank.
Dr Chalmers warned on Sunday that inflation was poised to jump “significantly higher” than the 4.25 per cent forecast by the Morrison government, implying his July economic statement would be similar to the RBA’s updated 7 per cent inflation forecast.Dr Chalmers flagged that the 2-3 per cent inflation target would form part of the review, amid a host of other issues on the RBA’s structure and operations.
Heading into the review, it is understood the government and RBA have no predisposition to change the inflation target, with governor Philip Lowe in recent years publicly supporting retaining the target.The RBA’s 2-3 per cent inflation target was informally adopted in 1992, before being officially cemented under formal central bank independence in 1996.
The RBA has come under scrutiny for its pre-pandemic policies and incorrect forward guidance during COVID-19 that interest rates were not expected to rise until at least 2024.after abandoning its yield curve target last November in response to investors betting against the RBA’s 2024 interest rate rise guidance.
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