Borrowers have been warned that the change in central bank governor announced by the federal government is unlikely to bring immediate interest rate relief.
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Economists expect little change in the Reserve Bank's approach to tackling inflation when deputy governor Michele Bullock replaces her boss Philip Lowe on September 17.
Westpac chief economist Bill Evans said Ms Bullock had the "same clear objective to achieve the inflation target" as Dr Lowe. He predicts the cash rate will reach 4.6 per cent.
HSBC chief economist Paul Bloxham said Ms Bullock's appointment provided "some sense of continuity".
![Incoming Reserve Bank governor Michele Bullock appeared at a Senate estimates hearing with current governor Philip Lowe in February. Picture by Keegan Carroll Incoming Reserve Bank governor Michele Bullock appeared at a Senate estimates hearing with current governor Philip Lowe in February. Picture by Keegan Carroll](/images/transform/v1/crop/frm/202296158/0c14f97c-3722-4ce4-8f94-9b384995868e.jpg/r0_256_5000_3078_w1200_h678_fmax.jpg)
"In particular, it is expected to mean strong continuity in the current approach to dealing with the inflation challenge," Mr Bloxham said.
Announcing Ms Bullock's appointment, Dr Chalmers said she was a "first class economist who also has remarkable leadership attributes".
Mr Dutton shed bipartisanship on Thursday when he warned that the Coalition would object to the appointment of a senior bureaucrat as "somebody who is familiar" to the government. The government portrayed this an an attack on the public service.
Ms Bullock's competition for the top RBA job was thought to include Finance Department secretary Jenny Wilkinson, Treasury secretary Steven Kennedy and Australian Statistician David Gruen.
Asked how much the Liberal leader's views on all candidates for RBA governor had been taken into account in the government's decision, Prime Minister Anthony Albanese said, "zero. Less than zero, it must be said."
"When I heard about those comments, I just thought, 'Is there anything that this bloke won't play politics with, and won't be negative about?'" he said.
Dr Chalmers added, "We won't be taking lectures from the party of robodebt."
"To describe people of the calibre of Steven Kennedy and Jenny Wilkinson - who have advised both sides of politics in a frank and fearless and impeccable way - as somehow tainted, it's not those two that are tainted," he said.
On Friday, Ms Bullock's appointment was welcomed by Opposition treasury spokesman Angus Taylor, who described the RBA deputy as a "highly capable economist".
Ms Bullock's appointment will bring to an end Dr Lowe's seven-year term as governor, his latter years marked by scorching criticism.
But Dr Chalmers paid tribute to the outgoing governor.
"We thank Philip Lowe for more than decades of dedication and commitment and service, not just to the Reserve Bank and not just to the economy, but to our country as well," the treasurer said.
"Phil Lowe goes with our respect, he goes with our gratitude, and he goes with dignity."
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He said the governor has carried on in a way "characteristically kind and classy".
The RBA governor has released a statement saying the Treasurer has made a first-rate appointment.
"I congratulate Michele on being appointed governor," Dr Lowe said.
"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. I wish Michele all the best."
The decision to elevate Ms Bullock continues the recent convention of appointing from within the RBA. Dr Chalmers said he consulted with business, unions and the opposition in making his decision.
"I wasn't obligated to consult the Opposition on this appointment but I did it anyway," he said. "And I thank Angus Taylor for making the time on a couple of occasions, including this week, to talk about this appointment."
Ms Bullock will be the ninth governor of the RBA and is the first woman in the role in its 63-year history.
"It is an absolute honour and I'm really happy that I've got such great support from the government. So thank you very much," she said in her public first words after being confirmed for the job.
"I think a big part of my role is going to be ... leading the bank through change."
Ms Bullock is a career central banker.
She joined the RBA in 1985 and has been deputy governor since April 2022.
"Ms Bullock is eminently qualified to lead this national institution," Mr Albanese told reporters in Canberra.
"Michele's will be an important job at an important time with the challenges that we face globally. Challenges which I have of course have been discussing at the NATO summit over recent days.
Dr Chalmers said Ms Bullock's appointment was "genuinely about who is best placed to take the Reserve Bank forward into the future."
Economists expect the appointment to make little difference to the conduct of monetary policy, particularly in the short term.
Dr Chalmers and Dr Lowe are due to head to India next week for G20 meetings.
The new governor is due to start her seven-year term on September 18. Ms Bullock's appointment leaves a vacancy for the role of deputy governor, which will be filled in the coming months.