If, as Dr Jim Chalmers seems to be suggesting, the Reserve Bank review adopts a broad-brush approach and plays down the responsibility of decision makers for what is arguably the worst policy failure in RBA history, a lot of Australians are likely to be disappointed.
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That's especially true of those who have borrowed unthinkable sums of money to enter the housing market since 2020 as a result of the RBA governor Dr Philip Lowe's oft repeated assurances interest rates, slashed to a record low as a result of the pandemic, would not start to rise until late 2023 or 2024.
As well as encouraging people to borrow in the belief rates would not rise for years to come, the promise of cheap money fuelled an explosion in property prices that put the dream of home ownership even further out of the reach of millions.
That is tragic given it has long been known home ownership is fundamental to financial security in retirement. Australians, who once took the dream of owning their own home for granted, are now looking at a future where almost a third of the population may be paying rent until they die.
That's not good for them, it's not good for the government, and its certainly not good for the economy.
It's no surprise then that, at almost the same time, Dr Chalmers was announcing the review should be completed by March 2023, Dr Lowe was defending the RBA's track record in an address to a business forum in Melbourne. He issued yet another mea culpa by acknowledging the RBA may have got it wrong by providing "too much support" during the pandemic: "Household spending, in particular, recovered more quickly from the pandemic than was expected," he said.
"This reflected the success of the vaccination programs in advanced economies and the unprecedented support to household finances from fiscal and monetary policies.
"This policy support meant that, as the health situation improved, households had the confidence and the ability to spend. The result has been strong growth in aggregate demand and the emergence of tight labour markets in many countries. This has contributed to the higher inflation we are now seeing."
The RBA, it seems, was so busy asking itself what it could do if and when things went badly wrong that it forgot to ask what it should do if the economy tracked better than its gloomy prognostications were suggesting.
On a more positive note, Dr Lowe did indicate the cash rate - which is now sitting at 1.35 per cent - could level off at around 2.5 per cent or a little more if inflationary expectations are kept in check. That would keep most variable rate mortgages in the five to six percent range. That's significantly lower than they have been for much of the last two decades.
He also suggested - repeatedly - future interest rate increases would be "steady" and "modest" and that falls in the prices of commodities, including oil which has dropped from its peak of around $120 a barrel to about $100 a barrel, would help reduce inflationary pressures.
That said, the timing of the RBA deputy governor Michelle Bullock's assertion on Tuesday that most households with mortgages could cope with rising interest rates was unfortunate. Has Australia become a nation whose guiding principle is "everyone for himself and the devil take the hindmost"?
Ms Bullock, and others on the board, have a blind spot when it comes to the 26 per cent of households in private rentals. When interest rates go up, so do the rents.
Comments and oversights such as this only help make the case for the review to look closely at community representation on the RBA board. It's not just about the economy; it's about people as well.
