Government appoints economics professor Bruce Preston to Reserve Bank’s rate-setting board

Esteemed economics professor Bruce Preston will join the Reserve Bank board members in charge of setting interest rates a fortnight before it makes another crucial decision for the nation’s homeowners.

Treasurer Jim Chalmers announced he would appoint the UNSW economics professor for a five-year term on the central bank’s monetary policy board, starting from March 1.

A panel comprising RBA governor Michele Bullock, Treasury secretary Jenny Wilkinson and former head of Treasury and PM&C Martin Parkinson recommended the appointment after looking at a shortlist of candidates who had expressed interest in joining the board when the bank’s governance was revamped in 2024.

He’s viewed as having the best CV and being the least contentious candidate, and offers the professional expertise of a career in economics, in line with recommendations from the RBA review.

“Professor Preston is one of Australia’s most highly respected and experienced macroeconomists and he will do an excellent job on the monetary policy board,” Dr Chalmers said. “The RBA is a vital economic institution and we are making sure it has the right mix of skills and expertise to meet Australia’s economic challenges.”

Professor Preston studied at ANU and has a masters and doctorate from Princeton University.

He’s worked at the RBA, Treasury and several universities in Australia and the US, and has also mentored and educated central bank staff around the world, including in Japan.

Dr Chalmers consulted shadow treasurer Ted O’Brien about the appointment a couple of weeks ago. Cabinet signed off on it last Monday.

Professor Preston replaces experienced corporate executive Alison Watkins, although the government continues to be keen to make sure there the board still has an understanding of corporate Australia.

The Reserve Bank hiked interest rates by 0.25 per cent at the start of the month, worried about inflation climbing back above its target band.

Ms Bullock flagged there would be more rate rises to come. The board’s next decision will come on March 17.