RBA boss’ $400k pay rise in cost crisis

Australia’s new Reserve Bank governor Michelle Bullock has received a nearly $400,000 a year pay increase after stepping into the top job.

According to the RBA annual report up to June 30, the woman responsible for Australia’s monetary policy settings received $1,056,835 for the first three quarters she had been in the top job.

This was made up of $811,108 in base pay, entitlements, superannuation payments and long-service leave.

Hidden in the figures is the near $100,000 a quarter pay bump Ms Bullock receives with her promotion in September last year.

Ms Bullock now receives a $270,000 base payment per quarter, which is nearly $100,000 more than her previous base salary of $179,098 for the three months while she was deputy when Philip Lowe still held the top job.

Mr Lowe’s last year of salary included a $974,602 base with a $123,054 super contribution and a further $9210 in other benefits and $40,599 for long service leave, totalling $1,147,465. This was a 10.5 per cent pay bump from the previous year.

For comparison, the Australian Bureau of Statistics latest Wage Price Index (WPI) showed wages rose 0.8 per cent in June quarter 2024, and 4.1 per cent for the year, meaning the average Aussie got a 4.1 per cent pay bump during the same period.

The salary of the RBA governor is determined by the RBA remuneration committee, which consists of three non-executive members who make recommendations on pay for the approval of the Reserve Bank Board.

Mr Lowe was the public face for the RBA board as it raised the cash rate from 0.1 per cent in April 2022 to 4.1 per cent in June 2023, as Australia battled an inflation outburst.

While Ms Bullock was his deputy, she didn’t oversee any rate rises but hasn’t cut rates in the past eight board meetings since November last year.

In the most recent RBA board statement, it said inflation was still too high for interest rates to be cut.

“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” it said.

“But inflation is still some way above the midpoint of the 2–3 per cent target range.

RBA Board keeps interest rates at 4.35 per cent

The Reserve Bank has kept rates steady at 4.35 per cent for another six weeks, amid a dramatic spike in volatility in financial and stock markets.

“In underlying terms … inflation was 3.9 per cent over the year to the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP).