Costello acknowledged that the RBA’s decisions were made during a crisis, but said central bankers should still be held accountable for mistakes made.
“The [Reserve] Bank gave guidance, guidance turned out to be wrong. The Bank stepped in to try to produce the result, and of course the money it used to step in was wasted,” he said.
“So you have to say it wasn’t a very good chapter for the Reserve Bank.”
The Future Fund, which invests to help pay government employee pensions, has returned 6.1 percent a year for the past three years. Since its inception in 2006 it has returned 7.8 percent annually.
The RBA’s performance and structure will be put under the microscope through a central bank investigation expected to report next year, with Costello backing his goal of keeping inflation at 2-3 percent. Still, he said the investigation should look at how well the policy was executed and there should be a discussion of how to make the central bank accountable.
“They are not above criticism and they are not infallible, and they must also be held accountable,” he said.
Costello did not express his opinion on whether Lowe should be re-elected as governor, saying this was a government matter. With official rates now at 1.85 percent and expected to rise to around 3 percent, Costello argued that some people could be in “a lot of trouble” if they had relied on the RBA’s guidance that rates were unlikely to fall. officials rose above 0.1 percent. cent until 2024.
“Now we at Future Fund obviously don’t rely on that future guidance, I’m very glad we didn’t. We would be in a terrible position today,” he said.
“But there are some young homeowners who might have done it, some investors might have done it, and it didn’t do them much good.”
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