Tim Wilson walks back suggestion Liberals would rethink RBA full employment mandate | Australian politics

New shadow treasurer Tim Wilson said he supported the Reserve Bank’s twin targets after calls for a more targeted focus on containing inflation were criticized as a strategy to raise interest rates and unemployment.

Just two days into his new position, Wilson gave the following signal to the authorities: nine articles He said the opposition would review legislation requiring the bank to focus equally on two goals: keeping inflation within the 2% to 3% target range and achieving full employment.

Wilson suggested the RBA’s “core aim” should be to reduce inflation after an unexpected rise in prices led Michele Bullock’s board to raise interest rates for the first time in two years earlier this month.

These comments were immediately taken on board by treasurer Jim Chalmers and Australian Council of Trade Unions secretary Sally McManus, who said Wilson’s approach would mean higher interest rates and unemployment.

“Dual mandate has been a key pillar of Australian economic policy since it was formalized by John Howard and Peter Costello and supported by both sides of politics and the independent Reserve Bank,” Chalmers said.

“This radical departure from bipartisanship is an early sign of Tim Wilson’s extreme ideology on the economy, which will put more people out of work if he picks up the levers.”

McManus said Wilson’s “shameful” proposal reflected the view of some sections of big business who wanted a large pool of unemployed workers to suppress wages.

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In an interview with Guardian Australia, Wilson said he “absolutely supports dual mandate”.

However, Goldstein MP argued that the bank had failed to fulfill this duty and that not enough emphasis had been placed on reducing inflation.

The monthly inflation rate was 3.8% through December, down from a low of 1.9% in June last year.

“They got it wrong, and I think they got it wrong in many of the periods where we had a situation where inflation was out of control. And you know, to be frank, Australia doesn’t have an unemployment problem at the moment,” Wilson said.

“They clearly misread inflation, so they don’t put enough emphasis on inflation. And they basically had to admit publicly that they thought inflation was under control.”

Wilson was open to some review of the RBA’s authority but does not recommend removing the employment target.

“The dual mandate is about balance and the aim is not to collapse the private economy, but that is what Australians are experiencing right now with higher inflation, lower annual wage growth and rising prices,” he said.

The unemployment rate remained steady at 4.1% in January, according to figures released by the Australian Bureau of Statistics on Thursday.

New opposition leader Angus Taylor did not respond directly when asked whether the bank’s dual mandate would be revoked, but backed Wilson’s claim that inflation was too high.

“I absolutely support Tim Wilson’s view that inflation is too high in this country and that everything reasonable should be done to reduce inflation, reduce interest rates, improve our standard of living and give Australians hope again,” Taylor said.

“That’s what Tim wants to see and he made a strong point that there needs to be a very strong focus from the Reserve Bank and, more importantly, the government who are failing Australians to reduce inflation.”

In a separate intervention on Thursday, Wilson told The Australian that the top marginal tax rate of 47%, which applies to incomes above $190,000, was “punitive” and a disincentive to work, leaving the door open to changes as part of a wider vision to cut income taxes.

Wilson called for “robust protection” on tax settings, which he said should be aimed at encouraging Australians to “take risks” such as starting small businesses.

“If you tax something, you discourage it. If you eliminate the tax, reduce the tax, or provide a tax credit, you encourage that behavior,” he said.