Despite Philip Lowe only being governor of the RBA for a little over 2 months, a lot of fundamental shifts have taken place leaving the RBA exposed to significant scrutiny on its previous actions. Specifically, in the midst of irrational exuberance, tolerating too many Australian households to overstretch themselves by borrowing excessively to purchase real estate in such a low interest rate environment that the RBA created. And since Lowe’s appointment, the RBA has seemingly clamped down against the scrutiny of their fiscal approach and have even unleashed powers that don’t exist within their mandate.
As an example, within two weeks following my September op-ed for the Guardian, a denied Freedom of Information request and a Senate submission claiming the RBA has failed to warn borrowers despite being aware that banks are tampering the loan applications of some borrowers to make them look more creditworthy than what they really are, the RBA ‘coincidently’ cited that our macroeconomic research team at LF Economics (established in 2015) has asked the RBA too many questions since May 2011 and advised that it would cease to provide any communication and clarifications to any inquiries.
I of course complained to my local Member of Parliament who happens to be Treasurer Scott Morrison. After he consulted with the RBA and in response to our complaint asking if the RBA is allowed to cease communication in this way, Morrison’s agreed that LF Economics team members had asked the RBA too many questions since 2011. In a quite frankly incurious response for reasons unknown the Treasurer’s response went humorously as far to imply that LF Economics was also somehow ‘on-selling’ the RBA’s information.
From our end, you know you are pressing where it hurts when the RBA (A government funded entity) feels obliged to take the most unusual of tactics. Indeed a Treasurer responding, unfortunately, with hearsay.