Economics Professor Bruce Preston Appointed to Reserve Bank's Rate-Setting Board
Treasurer Jim Chalmers has announced the appointment of esteemed economics professor Bruce Preston to the Reserve Bank's monetary policy board, a move that comes just a fortnight before the board makes another crucial decision affecting the nation's homeowners.
Professor Preston, a highly respected macroeconomist from the University of New South Wales, will serve a five-year term on the central bank's rate-setting board, commencing on March 1. This appointment follows a comprehensive selection process conducted by a panel that included RBA governor Michele Bullock, Treasury secretary Jenny Wilkinson, and former head of Treasury and PM&C Martin Parkinson.
Selection Process and Qualifications
The panel reviewed a shortlist of candidates who had expressed interest in joining the board after the bank's governance was revamped in 2024. Professor Preston was selected as the candidate with the best curriculum vitae and the least contentious profile, offering professional expertise from a distinguished career in economics. This aligns with recommendations from the recent RBA review, which emphasised the need for specialised economic skills on the board.
"Professor Preston is one of Australia's most highly respected and experienced macroeconomists and he will do an excellent job on the monetary policy board," Dr Chalmers stated. "The RBA is a vital economic institution and we are making sure it has the right mix of skills and expertise to meet Australia's economic challenges."
Background and Experience
Professor Preston's academic and professional credentials are extensive. He studied at the Australian National University and holds a master's degree and doctorate from Princeton University in the United States. His career includes significant roles at the Reserve Bank, Treasury, and several universities in both Australia and the US. Additionally, he has mentored and educated central bank staff internationally, including in Japan, showcasing his global influence in economic policy.
Political and Corporate Context
Dr Chalmers consulted with shadow treasurer Ted O'Brien about the appointment several weeks ago, and cabinet formally approved it last Monday. Professor Preston replaces experienced corporate executive Alison Watkins on the board. Despite this change, the government remains committed to ensuring the board retains an understanding of corporate Australia, balancing academic expertise with practical business insights.
Current Economic Climate
This appointment occurs against a backdrop of ongoing economic challenges. The Reserve Bank recently increased interest rates by 0.25 per cent at the beginning of the month, driven by concerns over inflation climbing back above its target band. Governor Michele Bullock has indicated that further rate rises are likely, with the board's next decision scheduled for March 17. Professor Preston's expertise will be crucial as the board navigates these complex monetary policy decisions aimed at stabilising the economy.
The addition of Professor Preston to the Reserve Bank board underscores the government's focus on strengthening the institution's capabilities to address Australia's evolving economic landscape effectively.
