By Denis Hay
How the Reserve Bank of Australia Upholds Neoliberal Economics – and Why It’s Failing Australians
Description
The RBA’s neoliberal policies favour corporate interests over citizens. Learn how it affects you and what can be done to change it.
Introduction
Picture this: It’s 1985. Australia’s economy is thriving, public services are well-funded, and ordinary citizens feel a sense of economic stability. Fast-forward to today – housing is unaffordable, wages have stagnated, and the Reserve Bank of Australia (RBA) continues to raise interest rates while everyday Australians struggle. How did we get here? The answer lies in the RBA’s unwavering commitment to neoliberal economic policies.
For decades, the RBA has operated under principles that prioritise financial markets, corporate stability, and inflation control – often at the expense of ordinary Australians. This article explores the extent of neoliberal influence on the RBA, how it has shaped monetary policy, and what can be done to reclaim economic fairness for all Australians.
The Structure and Composition of the RBA Boards
Current Members of the Monetary Policy Board
Michele Bullock (Governor & Chair) – Extensive experience within the RBA, former Deputy Governor, and the first woman to hold the position of Governor.
Andrew Hauser (Deputy Governor) – A central banking expert with a strong background in financial markets.
Steven Kennedy (Secretary of the Treasury) – Government economist focused on fiscal policy.
Ian Harper (External Member) – Academic economist, former chair of the Australian Fair Pay Commission, known for pro-market economic perspectives.
Carolyn Hewson (External Member) – Former investment banker with expertise in corporate finance.
Iain Ross (External Member) – Former president of the Fair Work Commission, bringing experience in labour policy.
Alison Watkins (External Member) – Business leader with a corporate management background.
Renée Fry-McKibbin (External Member) – Economics professor with expertise in monetary policy and macroeconomics.
Marnie Baker (External Member) – Former CEO of Bendigo and Adelaide Bank, representing the banking sector.
The Governance Board
The newly established Governance Board oversees the RBA’s administrative functions. However, it is largely composed of corporate figures, reinforcing neoliberal economic priorities rather than challenging them.
Current Members of the Governance Board:
Carol Schwartz (Chair) – Experienced in corporate governance and investment.
Elana Rubin (Deputy Chair) – Former chair of major financial and business organisations.
Swati Dave (Member) – Banking executive with extensive finance experience.
David Thodey (Member) – Former CEO of Telstra, deeply embedded in corporate Australia.
Danny Gilbert (Member) – Corporate lawyer and business leader.
Jennifer Westacott (Member) – Chief Executive of the Business Council of Australia, a strong proponent of neoliberal economic policies.
These governance figures reinforce the neoliberal ideology that prioritises corporate decision-making over policies that benefit everyday Australians.
The RBA’s Commitment to Neoliberal Economics
What is Neoliberal Economic Policy?
Neoliberalism is an economic ideology that prioritises:
• Market deregulation – Reducing government intervention in the economy.
• Privatisation – Transferring public assets to private corporations.
• Inflation targeting – Controlling inflation at all costs, even if it means high unemployment.
• Corporate tax cuts – Funnelling wealth into large businesses under the pretence of economic growth.
How Neoliberalism Drives RBA Decisions
• Inflation Targeting Over Employment – The RBA has consistently raised interest rates to control inflation, disregarding the impact on unemployment and wage stagnation.
• Favouring Financial Markets – RBA policies often align with corporate and banking interests rather than working Australians.
• Austerity Narratives – Supporting policies that limit public spending and social investment.
Who Wins and Who Loses?
Winners – Corporate Interests and Financial Markets
• Banks and investors benefit from high-interest rates.
• Large corporations receive tax cuts and incentives.
• Wealthy Australians with assets grow more prosperous as policies favour capital over labour.
Losers – Ordinary Australians
• Rising mortgage rates make housing unaffordable. Ref: YouTube video
• Wage stagnation persists while profits soar.
• Public services suffer due to a neoliberal push for privatisation.
The Real-World Consequences
Economic Inequality and the Housing Crisis
A 2024 report found that Australian wage growth has remained stagnant while corporate profits have surged. Meanwhile, RBA interest rate hikes have made homeownership unattainable for many, forcing more Australians into long-term renting.
The Erosion of Public Services
The RBA’s monetary policies support government austerity measures underfunding healthcare, education, and infrastructure. This has led to the deterioration of essential services once available to all Australians.
A Better Path Forward
Alternative Economic Models
Countries like Norway and Germany have successfully integrated full-employment policies with strong social services, proving that neoliberalism is not the only path.
Reclaiming Democratic Control Over the RBA’s Neoliberal Policies
• More diverse board representation – Including voices from labour unions, social policy experts, and community organisations.
• Ending inflation-first policies – Shifting focus to employment and social investment.
• Increasing public accountability – Requiring the RBA to justify decisions beyond corporate interests.
Summary
For decades, the RBA’s neoliberal policies have prioritises corporate interests over everyday Australians. As a result, economic inequality has widened, homeownership has become a distant dream, and public services have declined. However, this trajectory is not inevitable, and change is not possible if Australians demand a fairer economic policy.
Q&A Section
Q: Does the RBA have to prioritise inflation over employment?
A: No. Other central banks, such as those in Scandinavia, take a more balanced approach, ensuring employment stays a primary focus.
Q: Can the RBA be restructured to serve all Australians?
A: Yes. The RBA’s structure could be reformed to include more representatives of the public interest rather than corporate executives.
Q: What can Australians do to push for change?
A: Demand government accountability, support progressive economic policies, and stay informed about monetary decisions.
Call to Action
If you found this article insightful, explore more on political reform and Australia’s monetary sovereignty at Social Justice Australia.
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