Economist Bruce Preston Joins RBA Board

Treasurer Jim Chalmers has announced the appointment of Bruce Preston to the Reserve Bank of Australia (RBA) board. This move aims to enhance the board’s expertise in economic matters, particularly in its interest rate-setting capacity.

Bruce Preston: Profile and Background

Professor Bruce Preston is a distinguished macro-economist and currently serves at the University of New South Wales. Prior to this, he held significant roles in both the Treasury and the RBA.

Appointment Details

• Joining Date: March
• Replaces: Alison Watkins
• Selection Panel: RBA Governor Michele Bullock, Treasury Secretary Jenny Wilkinson, Former Public Servant Martin Parkinson

In his statement, Mr. Chalmers expressed confidence in Preston’s capabilities, stating, “Professor Preston is one of Australia’s most highly respected and experienced macro-economists.”

Context of the Appointment

This appointment follows a 2023 independent review of the Reserve Bank, which recommended dividing the central bank into two distinct boards. One board concentrates on corporate governance, while the other focuses on setting interest rates. The review emphasized the need for more technical expertise in monetary policy on the rates board, which had been primarily composed of corporate experts.

Role of Academics in the RBA

Professor Preston’s joining marks a continuation of this shift, as he becomes the second academic appointed since the review. He follows macro-economist Renee Fry-McKibbin, who was also one of the review’s authors.

Previous Contributions and Critiques

Professor Preston is recognized for his analysis of central banks, particularly regarding managing inflation expectations. In 2020, he authored a critical paper on the RBA’s communication strategies, advocating for clearer performance benchmarks.

Engagement during COVID-19

During the COVID-19 pandemic, he actively contributed to public discourse, supporting the JobKeeper stimulus initiative introduced by the Morrison government. He co-authored several articles with Steven Hamilton, who currently serves as Chief of Staff to Shadow Treasurer Ted O’Brien.

Future Appointments

The next opportunity for Mr. Chalmers to appoint a board member will occur in August, coinciding with the expiration of economist Ian Harper’s term.