Those that write up the rules don't have to adhere to them.. like the Romans did ..like our Mum & Dad ...when we over- stepped the line..

AI can very easily replace the whole RBA committee ( in fact reasonably simple program can spit out what to do in monthly meeting with interest rates based on few inputs i.e inflation, consumer confidence, PPI , etc..)

Fair points @PeregrineCapital

Although I've been critical of the RBA for years, and was against their free money policy at the time.

You're dead right too that bloat and waste is not unique to the RBA.

Anyway, always genuinely appreciate some good faith pushback. Just wanted to call out some things are think are wrong.

In the RBA's defence, I think those responsible for fiscal policy have a lot more to answer for.

@Strawman I have no issues with that salary. Lowe's position is one of the most important in the country, my view is a high salary is required to attract high-quality personnel. As an example (and to pick a random company) Endeavour Group pay their salary more than 4m. They sell alcohol and run pubs. Which position/job is more important?

1400+ employees is an absolute piss take. Even more so, the salary average....man. The make up of the board is also a significant issue. No disagreements there.

The above all said, and while I think the RBA could have performed much better, they are an easy target. I was not a big fan of the last budget and I imagine the RBA weren't either -- they are pushing shit up hill and trying to do a job with their hands tied behind their back. I do think we have much bigger problems with fiscal policy. On another note, I saw that an unnamed state government just extended the first home buyer grant, $30,000. Speechless..

Yeah, that's actually a great point @Rocket6

Wrong of me to point to Lowe's salary.

Also, I think you mean home *vendor* grant ;)

Yeah, if you want inflation, something like 2-3% is reasonable @Vandelay

It's not so much the arbitrary nature of it, but the fact that we think *some* inflation is good.

And I guess it is for a system built on debt. But i'm with the Austrians on that front. (All 3 of them haha)

I'm also a realist, so it's more an intellectual preference than anything. Given what we have, and will likely have for a long time yet, I agree it's important to have a sensible target.

It's an interesting discussion. I agree with some elements of the Overlord's take. In terms of remuneration, and particularly value for money, it's hard to argue. Just taking old mate Phil, for example, his base salary is 60% more than the PM - does that make sense?? You can take the PM's salary and ask that about a lot of people but still... The employee numbers and average employee cost - wow! They'd want to get a lot right, wouldn't they?

Going down a slightly different path I was disappointed that the recent inquiry was so narrowly focused and didn't look at the levers available to monetary policy. It's been such a long time since we did. Interest rates seem so flawed by themselves and ingrain inequality. You belt those at the beginning of their working lives trying to pay off debt (which even as a raving leftie I'm still ok with, if necessary), but reward those at the end of their working lives who are earning interest off earnings?? It feels like the opposite of Robin Hood. But what's the alternative? It's just one suggestion but what if we made superannuation (employee contribution) a lever rather than just interest rates. If you mandated putting up superannuation rates (employee contribution) instead of interest rates couldn't you have a similar impact? You're still taking money out of economy and thereby easing pressure of inflation, but instead of stealing from Peter to pay Paul's parents, you're stealing from Peter to pay Future Peter. Isn't that a better outcome?

Some cons:

• Can super rates be as dynamically adjusted as interest rates? Short answer is no, it would require a bit of work for many systems, but suck it up princess - change happens, adapt.
• Jacking up super means more money flowing into fund managers, which means buoying the share market. Arguably it's a shock absorber and would work the other way as inflation and super rates decline, just as other money comes into the market. Arguably it's a pro if you're for a more stable market, which I'm not...
• The banks would hate it. One of the big beneficiaries of a changing interest rate environment are the middle men. Some might argue that's a decent reason for change by itself.
• FX rates. I feel like this is the big unspoken truth about interest rates - we have to keep up the Jones'....even if the Jones' have predominantly fixed rate regimes. If we get too out of step we devalue the currency and all the impacts that has on us. Sux to be us.

There are other options. The point is that if you don't ask the question you won't get the answer. Which frustratingly they know - when you already know the answer, don't ask a question that might contradict it.

I think a "hard sell" is very much the understatement @PeregrineCapital - seeing as most Australian's currently make zero personal contributions to their super. For the majority, all of their super contributions come from their employer, and none of it is deducted from their wages. The public reaction to Labor's plan a few years back to change the refundability of "excess" franking credits was a big reason they lost a federal election that they should have won. A plan to introduce mandatory personal super contributions that would reduce people's take-home pay would be FAR more unpopular because it would affect far more people. If you then tell them that the amount (percentage) of their pay that would be deducted and paid into their super (thus reducing their takehome pay) could change as often as monthly, well... like I said, "hard sell" is quite the understatement.

I personally feel that using interest rates as a single lever to try to cool down an economy and lower inflation - or to stimulate an economy that is flat or slowing, or going backwards - is a flawed concept, for a number of reasons, not least of which is the time-lag between when interest rates change and when those changes most impact the economy and inflation, and the fact that the time between those events isn't always well understood by those making the changes - and because the timelag itself can vary - and because other factors can have far more of an impact than interest rates do and some of those other factors can at times overshadow interest rate movements to the point where the interest rate movements become virtually ineffectual - however I understand that central banks using interest rates is what we've ended up with, and I think that while there may well be alternatives that might work better (given time), getting such alternative measures implemented is probably going to be political suicide for any government brave enough to try.

And incumbent governments tend to be risk-averse when it comes to these sorts of things, especially in the 18 months leading into the next election, and history proves that fortune has not favoured the brave very often when it comes to opposition parties putting up "radical" new ideas or policies to try to win elections. It has more often cost them elections that they otherwise might have won. John Hewson's GST is another example of that. It lost him that election, then Johnny Howard introduced a GST later after already having been elected. But early in his term. And after not promising to introduce one during the election. He kept that plan quiet.

Changes can be made, but it's usually not easy, and you have to be brave to do it. Or crazy. Or both.

Well observed and well said @Bear77