Jim Chalmers says there are ‘mountains of respect’ for Philip Lowe after ‘awkward’ rift rumors

Jim Chalmers says there are 'mountains of respect' for Philip Lowe after 'awkward' rift rumors

Treasurer Jim Chalmers has hit back at rumors of a rift between him and outgoing Reserve Bank governor Philip Lowe as the pair travel to India on Sunday.

Dr Chalmers announced on Friday that Dr Lowe would not be reappointed to his post – sealing his fate from May 2022 to more than 12 with public outrage.

Instead, when her term ends in September, she will be replaced by her current deputy, Michelle Bullock, who will become the Reserve Bank’s first female governor.

But the treasurer and Dr Low travel to India on Sunday for a meeting of global finance ministers – a trip many say will now be very tense.

But speaking on the ABC’s Insiders programme, Dr Chalmers said he had mountains of respect for Philip Lowe. I mean it. I worked closely with him… for a long time.’

Federal Treasurer Jim Chalmers (pictured with his wife Laura) has hit out at rumors of an ‘awkward’ tension between him and outgoing Reserve Bank governor Philip Lowe

The treasurer said he had no fear that the trip would now be awkward and that Dr Low’ carried himself with characteristic dignity and professionalism.

‘Also, by the way, saying that the appointment of Michelle Bullock was a first-rate appointment,’ he said.

Dr Chalmers said Dr Low expressed his respect and gratitude to the government for its work and praised the governor’s response to the news.

‘He is behaving in an impeccable, dignified way,’ he said. ‘We work very well together… we are professionals.

‘I have high regard for him and he is highly respected internationally.

‘We have chosen Michelle Bullock to lead the bank forward but this in no way diminishes Philip Lowe’s dedication.’

Insider host David Spears questioned whether Dr Chalmers respected Dr Lowe’s interest rate decisions – after he raised them 12 times in the last 13 months.

The cash rate was held at an 11-year high of 4.1 percent after the July board meeting during the school holidays.

The decision marked only the second monthly pause since April, with interest rates rising at the most aggressive pace since 1989 through May 2022.

‘People under pressure want to understand why these decisions are being made,’ said Mr Chalmers.

‘I know it’s my responsibility to explain and sometimes defend the decisions I make in terms of the government’s economic plan and the budgets I hand over.’

Reserve Bank Governor Philip Lowe (pictured) travels to India with Treasurer Jim Chalmers on Sunday for an economic summit.

The Reserve Bank has halted a rate hike for only the second time this year but the relief may be short-lived

Spears interrupted to suggest the treasurer was not defending the Reserve Bank.

‘The Reserve Bank has an important role to play in explaining the decisions they make,’ said Dr Chalmers.

‘I don’t think it’s a particularly controversial issue.’

Dr Lowy is the first RBA governor in almost 30 years whose initial seven-year term was not extended by three years.

As Reserve chief, he has faced intense scrutiny over the past year, particularly from homeowners who have been hit with 12 interest rate hikes from May 2022.

These rises came after Dr Lowe infamously promised that interest rates would not rise until at least 2024.

Both his predecessors, Glenn Stevens and Ian McFarlane, had their terms extended by 10 years.

Ms Bullock, who will be the RBA’s ninth governor, will begin her seven-year term on 18 September.

Dr Chalmers said the decision not to extend Dr Lowe’s term was more about the future than the recent past.

‘Michelle Bullock, I think, as the outgoing governor said, is a first-rate appointment.’

Prime Minister Anthony Albanese (left) pictured with incoming Reserve Bank Governor Michelle Bullock (centre) and Treasurer Jim Chalmers (right)

Annual repayments have increased despite rates on hold

$500,000: $14,628 up

$600,000: $17,556 above

$700,000: $20,472 above

$800,000: $23,412 above

$900,000: $26,340 above

$1,000,000: $29,268 above

Monthly repayments based on a Commonwealth Bank variable loan for a borrower with a 20 per cent deposit rose from 2.29 per cent to 6.44 per cent as the Reserve Bank of Australia cash rate rose from 0.1 per cent to 4.1 per cent.

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