Time To Vary The Reserve Bank Board

The Sunday Age

Sunday March 16, 2008

IN SIX weeks federal Treasurer Wayne Swan will appoint a new director to the Reserve Bank board from a shortlist prepared by the bank's governor (and board chairman) Glenn Stevens and Treasury secretary Ken Henry.

So who should get the job? Swan and his advisers could begin by taking a cue from the retiring director, at least in regard to gender. Jillian Broadbent has served her 10-year term with distinction and diligence. Although knee-jerk affirmative action is not automatically an influence for the public good, it would be no bad thing if Swan saw fit to replace the Reserve Bank's only female member with another equally talented woman.

In fact, the gender issue doesn't matter as much as varying the board in other ways. Swan should consider returning to the idea of appointing someone different from the big business representatives that dominate the board. Five of the board's six discretionary appointees are blue-chip corporate directors, and none of the other four members could be described as the voice of rank-and-file Australians.

It has not always been so. The Hawke Labor government appointed union supremo Bill Kelty to the board in 1987. Kelty might now be suspected by class warriors of cuddling up to capitalism but for a decade he brought a different voice to the table. Unions and unionists are not automatically either infallible or virtuous, but they should be in touch with the views of the ordinary people whom Labor labels "working families" and Sir Robert Menzies called "the forgotten people".

There is a case for an independent voiceto speak for breadwinners rather than for shareholders on the Reserve Bank. Now the challenge is to choose the best candidate for the job. As president of the ACTU, Sharan Burrow fits the Kelty prototype, but she is only one of half-a-dozen people well qualified for the task. Not all of them men.