Steady Hands, Shaky Lives: How the RBA’s Charter Gives Way to Quiet Callousness

Have you noticed that the pundits and commentators who applaud the Reserve Bank of Australia (RBA) when they hold or increase interest rates are usually independently wealthy or Baby Boomers who have put their kids through private school and paid off their mortgages? Personal, financial pain is a long forgotten bumble weed in the rearview mirror of their European SUV.

Not all the time, but most of the time.

Just saying.

They come out and trumpet how prudent and wise the RBA Governor is and how the economy will benefit from the restriction and punishment dealt out on the people of Australia by the RBA Board.

As a disclaimer, I am a Baby Boomer who lives in the Eastern Suburbs, have a couple of cars in the security garage and have raised 3 boys into loving, independent men.

I’ve made plenty of money, then lost money and prestige (through my own doing) and won a bit of it back again.

I know what it’s like to be extremely comfortable and sit in judgement of all those who are not.

And I know how it feels to lose that wealth and comfort, and live pay check to pay check. I have felt the humiliation of rationing my petrol spend, and foregoing visits to the dentist because I haven’t had the money. I have sat in my dented old car, too embarrassed to pick up my sons from football or cricket training and cried silent tears of regret and shame.

I shared the deep disappointment the majority of Aussies felt when the RBA Governor held interest rates this week and didn’t provide her hardworking, patient society the small grace of an easier life.

You see, I don’t think the Governor and her Board were prudent and wise. I think they were mean and cruel.

The Governor had a chance to improve our society, and she chose to penalize. It seems to be the sentiment lately in our modern, Western world.

We cry out equality and fairness, but we embrace division and difference as an excuse to justify ordinary behavior, masquerading as economics.

So, before I get derided by all my boomer mates, let’s have a look at an interesting side by side comparison of purchasing a house in Sydney in 1990 (when the Boomers were young and free) compared to 2025:

Metric                                                               1990                             2025

Median Sydney House Price                 A$180k                      A$1.5–1.6 M

Average Mortgage Size                              A$140k                       A$810 K

House Price Affordability to Income  5 times                      14 times

In simple terms, our young, Sydney families have to spend 8 times more for the average home. They have to carry a debt 6 times greater on an overpriced asset but the income affordability to service that debt has dropped 3 times.

And here is the cruncher; real wages have only increased 0.4% annually over that period. This does not even cover CPI or in basic terms, the inflated price of groceries and fuel.

The reality for our young is precarious.

So, my advice to the Boomers and the RBA governor who applaud interest rate freezes is……well, I won’t say it, but you know what I mean.

Let’s take my argument a little further and have a look at the heart of the Reserve Bank of Australia’s responsibilities as set out in Section 10(2) of the Reserve Bank Act 1959.

The RBA’s core charter is to direct its monetary and banking policy to the greatest advantage of the people of Australia. Specifically, it has three key objectives:

1. Stability of the currency – keeping the value of the Australian dollar relatively stable (controlling inflation and avoiding deflation).
2. Maintenance of full employment – supporting conditions that allow as many people as possible to have work.
3. Economic prosperity and welfare of the people of Australia – promoting the overall well-being and standard of living across society.

These three points form the guiding principles for all the RBA’s decisions and are meant to ensure that monetary policy serves the broader Australian public, not just specific sectors.

There are so many delicious arguments that come from the RBA charter and the contradictory behavior of the Governor and her Board, when you accept that the RBA has no control over the stability of the Australian dollar – that is the domain of the US dollar.

Let’s look at a few morsels:

1. Maintain full employment – this is completely ignored by the Governor because one of her biggest factors in determining interest rate levels is the unemployment rate. So, if the unemployment rate is too low that is a trigger to hold rates because this means the people of Australia are not hurting enough. The RBA Board wants to see more people out of work before it drops the interest rate. But hang on, the RBA is supposed to promote full employment. Strike one Governor!
2. Promoting the overall well being and standard of living across society – how does the pain intensity barometer the Reserve Bank uses to determine interest rate levels promote the well being of Australian society?  It doesn’t. Strike two Governor!
3. Ensure that monetary policy serves the broader Australian public, not just specific sectors – unfortunately, the RBA governs in an elitist bubble, speaking in economic terms of aggregate demand and inflation expectations as though Australia were a single organism, not a patchwork of privilege and precarity. In truth, its decisions favor those who already own, while those renting or servicing high debt stagger under a burden the Board cannot imagine from its renovated bunker at the top of Martin Place. Strike three Governor – you are out and if I say so myself, a poor batting average.

As I have intimated in my writing, traditional Aussies like to believe we are self-made, but some of us are held aloft by invisible webs of privilege, timing, and luck. The RBA’s policy decision sustains those webs for the few, leaving others scrambling on frayed threads hanging on for dear life in an RBA generated gale.

This isn’t just bad economics. It’s a spiritual and social failing of a Board who is not upholding its charter. A society that tolerates such widening gaps is one where awareness has hardened into apathy, humility into hubris, kindness and tolerance into abstract talk of market forces.

The RBA’s choice to hold rates this week is to hold the vulnerable in place. To pause action is to push pause only for the wealthy, while the rest are locked in a fast-forward of ever climbing unaffordability.

Australia can do better than this. Even Keynes knew that the economy is not an abstract machine, it is us. You, me, all of us.

My recommendation to the RBA Board would be to spend a month at Miller, Green Valley or Bidwell, talking and sharing a table with Aussies doing it tough and then see how wise and prudent they think they are.

And we all know that will not happen because it takes humility and courage.