DAWE: Treasurer, thanks for joining us.
CLARKE: Always good to be with you, Bryan. Always good to be with you.
DAWE: The Reserve Bank has raised interest rates for the third time in a row.
CLARKE: It has. And I want Australians to know I understand how
difficult that is.
DAWE: Why did it happen?
CLARKE: The war in the Middle East has driven fuel prices higher, Bryan.
DAWE: Who started the war?
CLARKE: There are very complex geopolitical—
DAWE: Our allies.
CLARKE: We have longstanding alliance commitments that—
DAWE: And the RBA’s response to our allies starting a war is to raise
the mortgage.
CLARKE: The transmission of energy price shocks through to domestic
inflation is a well-understood phenomenon.
DAWE: Is it fair?
CLARKE: It’s economics.
DAWE: Richard Denniss at the Australia Institute calls it a price-profit spiral.
CLARKE: Look, there are a range of views—
DAWE: Not a wage-price spiral. A price-profit spiral.
CLARKE: The RBA has a mandate. They have an instrument.
DAWE: The mortgage.
CLARKE: The cash rate.
DAWE: Which hits people who owe money.
CLARKE: Among others.
DAWE: The oil companies don’t owe money.
CLARKE: The energy sector operates in global commodity markets that—
DAWE: They’re owed money.
CLARKE: There are balance sheet considerations that—
DAWE: By everyone.
CLARKE: (pause) The RBA has one instrument, Bryan.
DAWE: A 25% export tax on gas would have eased the whole thing.
Denniss has been saying it for years.
CLARKE: The investment environment requires very careful—
DAWE: Is there a windfall tax?
CLARKE: Not at this time.
DAWE: The board met for two days to decide this.
CLARKE: The process is very thorough, Bryan. Papers are prepared.
There are staff presentations.
DAWE: And at the end of two days they reach for the one instrument.
CLARKE: It’s the instrument the board has.
DAWE: Who’s on the board?
CLARKE: Nine highly distinguished members. Three ex officio, six
appointed by the Treasurer.
DAWE: Appointed by you.
CLARKE: By the Treasurer, yes.
DAWE: One of them ran Bendigo Bank. Sat on the board of the Australian
Banking Association.
CLARKE: Members bring a wealth of relevant experience to—
DAWE: A previous member ran Woodside Petroleum.
CLARKE: The board benefits from a diversity of—
DAWE: Another ran Macquarie Group for fifteen years.
CLARKE: Broad commercial experience is extremely valuable when—
DAWE: There was one from Shell.
CLARKE: I think you’ll find the Act specifically prohibits board
members from being directors of banks.
DAWE: It says nothing about oil companies.
CLARKE: (pause) The instrument is set independently.
DAWE: They each get $34,000 when they vote to raise it.
CLARKE: Their remuneration reflects the gravity of the decisions they
are called upon to make.
DAWE: Eight voted to raise it. One voted to hold.
CLARKE: The process allows for a range of views.
DAWE: Who was the one?
CLARKE: The votes are published without attribution. That’s a reform.
That’s transparency.
DAWE: We know someone had a conscience. We just can’t send them a fruit basket.
CLARKE: The anonymity protects the integrity of the deliberative—
DAWE: The Governor is paid $1.2 million. Can’t be moved until 2030.
CLARKE: Security of tenure is fundamental to genuine independence.
DAWE: She’s also a Sydney landlord.
CLARKE: I wouldn’t characterise—
DAWE: Several properties. Inner west.
CLARKE: The Governor’s private affairs are entirely—
DAWE: The person setting the rate that makes it harder to buy a house
owns several houses.
CLARKE: (long pause) The instrument is set independently.
DAWE: We were promised a reformed Reserve Bank.
CLARKE: The reforms have been substantial. Fifty-one recommendations.
Forty-one implemented.
DAWE: And the rate is at its highest since 2008.
CLARKE: The reforms address governance and transparency.
DAWE: Not the instrument.
CLARKE: The instrument is set independently.
DAWE: What does she wear?
CLARKE: I beg your pardon?
DAWE: To the press conferences. What label?
CLARKE: I really don’t see how that’s—
DAWE: Neither do I, actually.
CLARKE: (relieved) Good.
DAWE: Nobody ever asked Phillip what he wore.
CLARKE: Well, no—
DAWE: Whether he rocked up in a bib and brace and a pair of Blundies.
CLARKE: That’s not really—
DAWE: Flannel shirt.
CLARKE: I don’t think—
DAWE: He got a half-price home loan from the RBA. Subsidised by
taxpayers. Five bedrooms. Randwick.
CLARKE: That was entirely within the rules of the time—
DAWE: While he was telling the rest of Australia to expect rates to rise.
CLARKE: The forward guidance of that period has been extensively reviewed and—
DAWE: He also lost between thirty and fifty-eight billion dollars of
public money on the bond program.
CLARKE: The extraordinary circumstances of the pandemic required—
DAWE: Left the Reserve Bank technically insolvent.
CLARKE: There are accounting conventions that—
DAWE: No dividends to taxpayers until 2032.
CLARKE: The trajectory back to positive equity is well—
DAWE: Then he skipped the National Press Club to have lunch at Barrenjoey.
CLARKE: He had a very full schedule—
DAWE: Investment bank.
CLARKE: There are many demands on a Governor’s—
DAWE: And then we got a reformed Reserve Bank.
CLARKE: Correct. Fifty-one recommendations—
DAWE: Phillip Lowe in a frock.
CLARKE: (firmly) That is a deeply uncharitable characterisation of
what is a genuinely reformed and transparently accountable
institution.
DAWE: What’s the label on the frock?
CLARKE: (very long pause) You can’t flog a dead horse to death, Bryan.
DAWE: No.
CLARKE: No.
DAWE: She’s focused on price stability.
CLARKE: She is.
DAWE: So is Denniss. He just thinks there are other ways to achieve it
that don’t involve the former CEO of Woodside.
CLARKE: (standing) We’re getting on with the job.
DAWE: Which job?
CLARKE: The important one, Bryan.
DAWE: That’s what Phillip Lowe used to say.
CLARKE: He had good instincts.
DAWE: Yes. The instrument was always pointed at the right people.
CLARKE: (at the door, quietly) That’s the instrument, Bryan.
The Clarke and Dawe format belongs to the estate of the late John Clarke and to Bryan Dawe.
Urban Wronski’s use of the format is homage, clearly labelled as such throughout. The closing attribution; “In the tradition of John Clarke and Bryan Dawe, who understood that given the right line of inquiry, power undresses itself in public” — serves both as acknowledgment and as the piece’s final editorial statement.
John Clarke died on 9 April 2017 while bushwalking in the Grampians. He was 68. The last Clarke and Dawe sketch aired on 20 April 2017; recorded four days before his death, with Clarke playing an NBN consultant. The format lives. The man is irreplaceable.
“Phillip Lowe in a Frock” is the satirical thesis of the piece: that the reform was cosmetic, that the instrument is identical, and that the class interests it serves are unchanged. It is not a comment on the Governor’s appearance, gender or wardrobe; the sketch makes this explicit, with Dawe himself acknowledging the absurdity of the question before pivoting to Lowe’s actual record.
This article was originally published on URBAN WRONSKI WRITES
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Yes David, absolutely Lowe in a frock!
Can’t get out of my mind that sly smile always across her face, she’s one cold carbon based unit.
Blunnies! There is no D.
As I understand it the increase in interest rates is trousered by the banks at the first opportunity. So the banks are all doing very well, God bless ’em.
The inflation that the RBA are tackling is due we are told to excessive spending in the private sector (definitely not excessive government spending according to Treasurer Jim). I heard a commentator from the AMP being questioned about all this spending and she noted that people are going out to dinner and going on cruises and she couldn’t even get an appointment at her nail clinic or get her eyebrows done for the interview and that’s where the problem lies. But I also read that people going on cruises are catching viruses and being buried at sea so to assist the economy could all you people out there stop going on cruises for your own wellbeing and that of the economy.
Rents and housing prices are fuelling inflation so as an act of social responsibility I suppose renters should tell landlords that as a gesture to assist the economy they will reduce the rent they pay by thirty percent immediately and mortgage holders should tell the banks that as an act of social responsibility they will not be paying any more interest as to do so would only increase inflation.
We are also told that Donald Trump’s antics in the Middle East are causing an oil shortage globally as the vast amounts of oil cannot get out of the Hormuz Strait mainly due to the Mexican Stand-off that the Doald has engineered with the Iranians.We are also told that Donald has swollen ankles: is there connection?
{“If you always do what you’ve always done,you’ll always get what you’ve always got” Groundhog day for the RBA.Big shout out to the dying days of neoliberalism.