From Schwartz Media. I'm Daniel James. This is seven am. The Reserve banks should lower interest rates and if they don't, the government should make them. That's according to the Greens. Their spokesperson for Economic Justice, Nick McKim, has said he won't support the government's reforms to the RBA unless the Treasury intervenes and the bank's decision making processes and tells
them to lower interest rates. It's a big demand, something that's never happened before and is unlikely to now, with Labour saying the Greens are out of control, and there is also unrest within the Greens about the position, with some concern the demands go too far at a time when the party is looking to make itself a viable alternative to the two major parties at the next election.
Today National correspondent for the Saturday paper Mike Sekham on just how independent the Reserve Bank is and what the Greens are playing at. It's Friday, September twenty seven. Mike, thank you so much for joining us.
It's always a pleasure.
What was your reaction when you heard the Greens were demanding the government forced the RBA to lower interest rates?
Well, Frankly, I wondered what they were playing at, and I would suggest so did most other commentators out there. You know, clearly the Greens have been on a bit of a roll of late. You know, they've done very well raising the issue of the high cost of housing, which now has the government looking at maybe changing the tax breaks around negative gearing. So a win. But equally clearly, this particular one is not something that this government or
any other government, I would suggest. Whatever, do you know they are not going to take the interest rates setting power off the Reserve Bank. I was a bit flummixed by it, and so I called Nick McKim, who's the relevant Green spokesman on treasury matters, and ask him to tell me why I think the government should do this. I guess the question is are we really in extraordinary circumstances at the moment? I mean, so, I caught him just a few hours before the RBA's Tuesday rates announcement
and he gave me a prediction. He said that the Central Bank would not lower rates and that the government will respond with quote the usual ritual of ashen faced hand ringing, ringing.
Every time interest rates go up, where they go out and pretend there is nothing they can do about it, so they can empathize with people that are getting smashed. It's theater.
He also said the Reserve Bank is not independent and never has been.
The so called independence of the Reserve Bank is just a great big lie told by labor and liberal treasurers over other decades.
And so the bank announced its decision, Jim Chalmers came out and behave pretty much exactly as McKim predicted he would. He held a media conference in Brisbane and uttered variations of the I word are independent or independence seven times in the space of about a minute in response to questions from the media.
I don't preempt and I don't second guess decisions taken by the independent Reserve Bank. I've made that very much.
And he went on to stress that the government's legislation, which is stalled because of the Greens action, we're about trying to make the Reserve Bank more independent, not less.
So these decisions are taken independently by the Reserve Bank. My efforts have been about trying to make the bank more independent, not less independent. I respect and cherish its independence. They've taken this decision.
So charmers is saying that the bank is independent. Nick McKim is saying the exact opposite. Who's right here, Mike.
Well, As a debating point, I think you'd have to say McKim was right. I mean, it's in the act. Section eleven of the Reserve Bank Act provides that the Treasurer can rule a bank decision, but there's a somewhat convoluted process involved that includes a requirement that the bank should produce a statement and I'm quoting here a statement in relation to the matter in respect of which the
difference of opinion has arisen. So, in other words, when the Bank and the government aren't getting on, there has to be a public airing of why they're not getting on. I would suggest that's perhaps one reason why no Treasurer has ever used the power, because you know, it bring on an enormous public stout. The other reason I think that it's never been used is that Australia has not experienced a major economic crisis in which the bank and the government were seriously in conflict.
So the Greens are emphasizing in relation to this that the government could tell the Reserve Bank to lower rates. Like you said, it's never happened before and there's no signs that it will happen again, which makes it an interesting political choice by the Greens to run this line. What did you find out about why they're pushing this particular line of argument.
Well, well, I called a number of people from the Greens room because I wanted to know why they decided to take this tack. Some of them spoke on background. I think probably the most telling though, was the person who didn't speak, and that's the Senator Peter wish Wilson, who politely but firmly declined through his spokesperson to get involved. And I think this is interesting because he's a person with pretty serious economic credentials. He's one of a couple
in the Greens party. He is one. The other is Barbara Pocock. Wish Wilson has a master's degree in economics. For almost eight years until he entered Federal Parliament in twenty twelve, he taught university economics. Before that, he worked as a banker and a broker for more than a decade with Merrill Lynch on Wall Street and with Deutsche
Bank in Hong Kong. He was also the Green's finance spokesman between twenty fifteen and twenty sixteen, and then he became the party's treasury spokesman, which is a position he held until September twenty twenty, when he was reshuffled out of the role by the new leader, Adam Bann. So you know, he's a fairly serious voice on the matter, and the fact that he's choosing to stay strom on
this I think suggests that maybe he's not entirely in agreement. Nonetheless, you know, I rang him thinking that he might have some pertinent observations to make about this insistence that you know, politicians are more to be trusted on interest rates setting than the econocrats of Australia's Central Bank, which is a pretty extraordinary thing to posit I would suggest wish Wilson
isn't talking. But certainly others in the Greens party room are uneasy about the line their colleague, you know, the Treasury spokesman, Nick McKim has taken. Some of them wonder if it was necessary to pick this particular fight with the government. They worry that Anthony Alberanesi's line that the Greens and the coalition parties have formed what he calls a noalition to styre me not just this but other bits of a number of other bits of government legislation
in the Senate. They worry that line's getting a bit of traction.
After the break the political calculation behind the Greens demand. Mark, You've been speaking to a lot of Greens about the Reserve Bank into their demand that the government force interistrates down. Can you tell me about what you found out about how they landed here?
Well, how it happened was that the government ordered a review into the Reserve Bank, an independent review, and it reported back last year with fifty one recommendations, all accepted by the government. The government was planning to legislate and until very recently had been working with the coalition to implement the reforms, and things seemed to be going swimmingly.
Jim Chalmers made some amendments to take account of opposition concerns, and then quite suddenly and recently without any notice, the coalition parties just walked away from the deal that was
very close to being done. So what this means is that suddenly the government needs the Greens and the cross Bench if it's going to get its reforms through the Senate, and the Greens are concerned with a couple of provisions in the legislation, particularly with the idea that Section eleven of the Reserve Bank Act, the one that gives the Treasure a power to overrule the Bank in extraordinary circumstances,
is to be abolished. And this is of course the very part of the Act that McKim is wanting the Treasure to use right now. His Senate colleagues have gone along with him. He told me this was a party room decision arrived at through the quote normal processes unquote, and taken within the past couple of weeks. But another source tells me that in fact there had been differing views expressed in the party room. Nonetheless, it was decided that the Party would block the RBA reform legislation in
the Senate until interest rates began coming down. Then it would waive most of the changes through, but it would insist that Section eleven was retained. That was agreed. McKim went out, but he went further than a lot of his colleagues were expecting. He went out and demanded not just that sectional even be retained in case of some future crisis, but that the government should immediately use it, and that a source told me, was not how some
of us expected it to be announced. They thought the government should retain that Section eleven power, but saying it should be used immediately were quite different things.
Right, So Senator Nick mckin has gone beyond what his colleagues agreed to and beyond what basic cleaning were on the ouse, either inside or outside the party is calling for. What does he have to say about that.
Well, he's not taking a backward step. When it was put to mc kim in an interview with the online news site criche this week that he was quote pretty alone unquoted in his demands, he said, and I'm quoting. I can't help it. If the neoliberal worms have consumed the minds of other people, that's their problem, not mine. So,
you know, pretty bolshy stuff. And of course, after the interest rate decision came not on Tuesday, within minutes in Mainbox plopped a press release from mckim's office in which he's said a number of things that drove it home to the Labor Party, one of which was Labor is watching the Reserve Bank drive people to the wall and doing nothing. So there's a good measure of ideology here. But also a pretty good measure of politics as well.
Yeah, you mentioned politics. This sounds like there's a fair degree of politics and all of this mic. How is this playing out politically for the Greens?
Well, one columnist called it trumpest, suggesting that it was very like the sort of thing Donald Trump might come up with. And I might add that this particular columnist was not a notably right wing one, but you know, center left. Another headline suggested that the Greens were advocating a hostile takeover the Reserve Bank, so you know, you kind of get the tone from that. It has not been well received pretty much across the board.
So what does this tell us about the Greens overall strategy when it comes to dealing with the government. How are they are approaching working with labor and are they having a kind of impact that they want to have.
Well I spoke with the Greens leader Adam band about all this, and he said that this wasn't some knee jerk move or simplistic attack on the RBA. He pointed to quite a long list of other things that he said the government could do that might actually obviate the need to lean on the Reserve Bank to lower interest rates.
You know, he said that if the government did things like introduced to vestiture powers to break up supermarkets that were gouging, if it brought in a super profits tax, if it did something about negative gearing, it did a whole lot of things that the Greens think are fueling the Australia's current inflation and cost of living crisis, then there may be no need for the Reserve Bank to use the frankly blunt instrument of interest rate rises to
try and deal with inflation. But all of this suggests to me anyway that the Greens, maybe not including Nick McKim, but the Greens generally are not really that's serious in their demand that Jim Chalmers take control of monetary policy away from the Reserve Bank, rather than kind of using this for leverage to make a point about not monetary policy but fiscal policy and government policies more broadly, and of course to make political capital on the way.
Is there a risk that the government will just peg the Greens as being obstructionists or fringe and that sort of framing of that narrative could hurt them politically.
Well, the Government is certainly portraying them in that way there's a raft of quotes on the record of the past week or so from you charmers.
The Greens that their primary task is to make up numbers and put out press releases. We actually have to run the place, run there, Katie gallaher Bank legislation. I mean the Greens are out of control.
Anthony Albineasi.
What the Greens do is engage in populism, often in conjunction with their partners in the Nooalition, the Liberal Party in the National Party.
So certainly the government doing its best to white hand them. Whether it works or not, I don't know. I mean they have clearly been appealing to a certain part of the demographic, particularly those young people who are locked out of the housing market. And I would note that at the last election the Greens had a record result. They
did better than they ever have before. And the way the polls are looking at the moment, it could well be the case that neither of the major parties gets a majority in its own right in the Parliament, and that could place the Greens and the Teals and assorted other cross benchers in a position of great power to decide what gets up and what doesn't. As to how this will play out, Whether it does them could or not.
I don't know. Your guess is as good as mine, but I would leave it by quoting one of the party sources that I spoke to, who said, the politics of this is that people don't know what these changes are about their bloody pissed off about their interest rates. If that's the message that gets through, it's probably not a bad thing for the Greens.
Mirk, thank you so much for your time.
Thank you for yours.
Also in the news today, Australia has joined the International Corps for an immediate twenty one day ceasefire across the Lebanon Israel border to provide a safe space for diplomacy. The joint statement was negotiated on the sidelines of the UN General Assembly. It says the recent fighting is intolerable and presents an unacceptable risk of a broader regional escalation. It comes as the chief of Israel's army said the IDEF was preparing for a ground invasion into Lebanon and Quanas.
Travelers have been put on alert for flight disruptions as engineers at Melbourne Airport walked off the job from Thursday morning. Members of the quantas of engineers Alliance are pushing for a fifteen percent pay rise following more than three years of wage frees. The strikers expected to roll out across all major airports during the next two weeks. Seven Am was a daily show from Schwartz Media erran in the Saturday paper and hosted by me Daniel James and Ruby Jones.
It's produced by Shane Anderson, Zoltanfecho, and Zaia Tangral. A technical producer is Atticus Bastow. We are edited by Chris Dangate and Sarah mcvee. Eric Jensen is our editor in chief. Our mixer is Travis Evans. A theme music is by Ned Beckley and Josh Hogan of Envelope Boudier Azol for this week. Thanks for listening.