An end to the RBA’s secrecy: making votes public

The RBA’s long maintained secrecy is coming to an end as part of reforms that look to bring the institution more in line with its international counterparts and opens up its decision-making.

Up until now, the bank had worked on a consensus voting method and not made public any dissent within the board in reaching its decision. Following the change, if consensus on a decision is not reached, the board will publish the votes of those in dissent without attribution.

The changes come after the first review of the RBA in over 40 years and criticism that the bank had become stifled and lacking diversity of opinion. The current process of the board meeting is that the RBA provides board members with papers that include a recommendation on changing the cash rate. The review found that not a single board member had voted against the recommendations for the past decade.

The review expected that publishing votes would provide greater information of the decision-making of the board and help financial markets better understand the direction of interest rates.

This brings the RBA into line with reserve banks around the world, most similarly the Reserve Bank of New Zealand. The Bank of England and the US Federal Reserve also have some form of vote count published.

Also to come from the 2023 Reserve Bank review is a change to the bank’s structure and the creation of a second governance board.

There was commentary that the review could make recommendations to reconsider target inflation and other more wide-ranging reforms, but no such recommendations have been forthcoming.

The RBA is set to confirm the changes at their next board meeting on 7-8 July, where markets are also largely predicting another rate cut to be agreed upon bringing further reprieve to Australian mortgage holders.