The National Retail Association (NRA) has urged the new Reserve Bank of Australia (RBA) governor Michele Bullock to act with sensitivity on future interest rate decisions.
Bullock was appointed by the Federal treasurer Jim Chalmers and will commence the role on September 18 for a seven-year term.
NRA CEO Greg Griffith admitted that Bullock is facing a tough economic market, but urged the new governor to consider the impact a future rate rise would have on small to medium-sized businesses.
“Since the RBA started lifting the cash rate in May last year, there have been 12 interest rate rises, totalling a combined 4 per cent,” Griffith said. “As many have said, this is a case of too much, too late.
“Our sector, the largest employer of retail workers in the country, is asking the new governor to consider the impact 12 previous successive rate rises is having on business right now, rather than months down the track when economic indicators come in.
“We would urge the governor to learn from the lessons of the past and not act too late in putting the brakes on this policy direction.’’
Griffith said rising interest rates have been putting many businesses and households with mortgages under pressure.
“The Governor needs to look at multiple indicators in the economy and make her decision carefully, but we urge her to think clearly about the impact of rate rises and weigh this against their efficacy,’’ he said.
“The true story of retail sales figures reveals a more nuanced picture where some people and major drivers of the economy are feeling the pressure, while some are not.’’
Bullock succeeds the current governor Philip Lowe, moving up from her current role as deputy governor. Lowe welcomed the decision.
“The Reserve Bank is in very good hands as it deals with the current inflation challenge and implementing the recommendations of the Review of the RBA,” Lowe said. “I wish Michele all the best.”
The role of Reserve Bank Governor comes with several responsibilities, including chair of the Reserve Bank Board, the Payments System Board and the Council of Financial Regulators.
As Governor, Bullock will also be responsible for the management of the Bank under the Reserve Bank Act 1959.
“I am deeply honoured to have been appointed to this important position,” Bullock said. “It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards.
“I am committed to ensuring that the Reserve Bank delivers on its policy and operational objectives for the benefit of the Australian people.”
Governor Lowe will continue in his position until the end of his term on September 17, 2023.