Australia names first female apex bank chief

The Reserve Bank of Australia (RBA) has announced a landmark moment as it prepares to be led by a woman for the first time in its history since its establishment in 1960. Michele Bullock, currently serving as the RBA’s deputy governor, will succeed Philip Lowe, who concludes his seven-year term as governor.

This appointment comes at a critical juncture as Australia grapples with surging prices, prompting the RBA to implement significant measures. To combat inflation, the central bank has raised interest rates to the highest level in over a decade. Meanwhile, the nation’s financial services industry remains predominantly male-dominated, contributing to one of the country’s widest gender pay gaps.

Ms Bullock, an RBA veteran who joined as an analyst nearly forty years ago, is set to commence her seven-year tenure as governor on 18 September. In her statement, she acknowledged the challenges ahead but expressed confidence in her strong executive team and boards. She pledged her commitment to ensuring that the Reserve Bank fulfils its policy and operational objectives for the benefit of the Australian people.

Widely regarded as an insider within the RBA, Ms Bullock has held various senior management roles, including assistant governor and head of the payments policy department. Her appointment received praise from Australia’s Prime Minister Anthony Albanese, who lauded her as an outstanding economist with an illustrious career at the central bank. He emphasised her experience, expertise, and fresh perspective in navigating the ongoing economic challenges faced by Australia and the world.

Finance Minister Kathy Gallagher hailed this as a historic moment for Australia, marking the first time the RBA will be led by a woman. Outgoing governor Philip Lowe expressed his confidence in the capable hands of Ms Bullock as the central bank tackles the escalating cost of living. He commended the Treasurer’s exceptional choice and extended his best wishes to Ms Bullock in her new role.

The RBA faces mounting pressure to address inflation, which strains household budgets. Having raised interest rates 12 times since May of the previous year, the central bank has elicited mixed reactions from economists. The current main interest rate stands at an 11-year high of 4.1%. The objective of raising interest rates is to curtail borrowing by making it more expensive and encourage reduced spending, thereby contributing to inflation control.

Criticism arose when Mr Lowe suggested that Australians should work more and spend less to cope with the increased borrowing costs. He argued that cutting back on spending or seeking additional work hours would restore positive cash flow for individuals. The governor defended the central bank’s decision to raise the main interest rate for the twelfth time, asserting that homeowners were faring well.

Earlier this year, the Australian government conducted the first external review of the RBA in 40 years, resulting in 51 recommendations. The review called for a clearer monetary policy framework and increased accountability for the central bank.

Notably, the financial services industry in Australia continues to exhibit one of the country’s highest gender pay gaps. According to government data from the Workplace Gender Equality Agency, there is a 28.6% disparity in remuneration between males and females in the sector, surpassing the national gender pay gap of 22.8%.