Back in April, we published how Australia’s federal politicians charged with tackling the thorny issue of soaring house prices are keen property investors themselves which obviously raised the question just how willing they are to address the current housing affordability crisis.
The property ownership ranking available here was based on the Parliament’s registers of interests that cover primary and secondary homes, investment properties, holiday homes, commercial buildings and vacant land, including those jointly owned with spouses. We also wrote about Aussie politicians who “live off” rental income without owning property.
Around that time, we were wondering if the Reserve Bank of Australia (RBA) has similar transparency of releasing information (it had never done it) about the property holdings of its board members given their participation in and pre-knowledge of monetary policies which effectively control asset prices.
In short, the Reserve Bank Board consisting of nine members regularly meets for coffee and makes monetary policy decisions, including setting the key interest rate which directly and indirectly affects a range of market, retail and institutional interest rates, including home loans and property prices.
Furthermore, among many other policy decisions, the RBA also conducts unconventional quantitative easing, or QE which is just a buzzword for printing more money to intentionally increase prices when it thinks inflation is low (well, RBA governor Philip Lowe’s outdated view and obsession of inflation is not a well-guarded secret). The QE, in fact, acts in a similar way to interest cuts without actually reducing the nominal rate.
Over years, the RBA Board, especially Governor Lowe and Deputy Governor Debelle have been accused of failure of statutory objectives, lack of monetary competence, lack of transparency, lack of external/public scrutiny, shrugging off the fastest-growing home prices in 32 years as "not our problem" with the nation's financial stability and monetary policy left running on autopilot.
Former senior research manager for the RBA, Peter Tulip, a few months ago explained in a blog article that "the Board is mainly composed of business leaders who lack expertise in monetary policy. It is unable to effectively challenge the Governor". Similar and even stronger views have been put forward by numerous economists, researchers, former prime minister Paul Keating and others...
Semitransparent Lowe
On April 15, we formally filed a Freedom of Information (FOI) (FOI 2925/RBAFOI-202133) request with the RBA to obtain “information about ... the real estate ownership by members of the Reserve Bank Board, including the Governor and Deputy Governor''.
Our FOI request also included hyperlinks to the federal parliament’s registers of interests to make our request not too frightening given the RBA had never released such information to the public. This was also a deliberate hint at the lack of transparency and accountability the RBA had enjoyed for years.
On April 16, the RBA’s FOI Officer replied acknowledging the receipt of the request and the Bank’s commitment to provide the answer “within 30 days of the commencement of processing” and “advise that processing of it commences today, 16 April 2021”.
Meanwhile, we soon understood that fuming and outraged over our FOI request and its potential to reveal the RBA’s lack of openness, top brass at Australia's central bank had scrambled to save face.
Grab the popcorn, sit back, it is funny how and what they did. And, never underestimate what lengths some would go to score some cheap political points.
Up all night working as this is not a trivial matter of monetary policy or financial stability to brush aside, the RBA hastily drafted a declaration template based on Parliament’s registers of interests called “Declaration of Material Personal Interests” and two copies, one for each, were signed personally by Governor Philip William Lowe and Deputy Governor Guy Debelle on April 30. Remember this date - April 30.
Here you go, for the next couple of days, Philip Lowe would be praised by the unsuspecting media for “the RBA this week published for the first time the financial disclosures of Dr Lowe and his deputy, Guy Debelle, in an effort to boost transparency and public accountability”.
“These declarations are made voluntarily to promote openness and accountability”, misleadingly says the RBA’s website which you can see in the screenshot here. Well done, political points are not as hard to make as monetary policy points.
It is actually good to see the RBA is transparent or at least semitransparent even though this is done in a manner which couldn't be any further from what "voluntary" denotes. Perhaps, at gunpoint?
But… let’s put aside the political points, probity and ethics to look at details where the devil is.
Yes, not only had we seen the declarations but also we had been in realisation of internal attempts and delays to circumvent the FOI process to make dirty political points, avoid embarrassment and "punish" us.
So, Dr Lowe’s becoming (semi)transparent overnight of his own volition was not what surprised us.
On the same day - Friday April 30 just after Dr Lowe blew on his signature to dry the ink, we received an email from the RBA’s FOI Officer Phil Lomas as below:
“I write to advise that your request (detailed below) has been transferred to the Treasury for processing in terms of section 16 of the FOI Act. This is because the Reserve Bank of Australia does not have the documents you seek (Board Members declarations are made to the Treasurer and not the Reserve Bank).
Yes, remarkably we were not even formally informed about the release by July 2, further on this below.
To make it absolutely clear, the information released under our FOI request was communicated to everybody but us, out of fear that we were the only party who would know the release was designed to mislead the public.
We further realised that by splitting into gradual or partial releases (first, governor and deputy, then others), the RBA simply aims to make the information both irrelevant and less significant by the time all released. In addition, this would obviously disadvantage and penalize the information seeking party by preempting the publication of any investigative work. Smart enough.
In the following weeks, in response to our frequent followup emails in May and June, the Dear FOI Officer continued to maintain that “the Treasurer’s Office… ...they said they will contact you soon regarding your request”.
Finally on July 2 just before we were ready to celebrate the 90 days mark since the request filing, we received an email from an unnamed (unless “Kind regards” is a name here) “Freedom of Information Officer The Treasury”, referring to the aforementioned “voluntary declarations” to say “as these documents are publicly available a formal FOI request is not required”... you don't say!
One would ask under which rock you have been living.
Why To Hide Board Members’ Property Ownership
Remember we mentioned above that the Board has 9 members. We understand (actually, hope) that the other seven might not have wanted to share the cheap political points the governor and deputy governor like so much.
On a serious note, we don't really understand why the RBA and Treasurer’s Office are still going to all the hassle of hiding the declarations of other board members without any explanation even in apparent contravention of the FOI Act. They haven't even asked for any extension if they really need more time (Time requirement is 30 days under the FOI Act, which can be extended for another 30 days if notified).
This is now outgrowing the perimeters of the professional and ethical misconduct in public office involving an inter-/intra- departmental/agency conspiracy to deliberately obstruct access to the information of public interest eligible for release under the FOI Act.
In the past weeks in more than one correspondence, we requested the RBA and Treasurer’s Office (FOI officers) to internally investigate this matter, provide or explain why they can't provide the declarations of the other board members, make a correction on the RBA website to set the record right (remove "voluntary" and make clear how it was released), and issue a public apology for misleading the public/taxpayers and for misrepresenting the nature and circumstances of the release by providing false information for political purposes. Days of silence now.
On the positive side, we wouldn't be too surprised if other board members also make "voluntary" declarations in the coming days.
