In short:
The RBA board has typically had split votes on monetary policy around 30 per cent of the time over the past decade, a former board member reveals.
asserted
member → split → decade
Ian Harper says none of the treasurers in power during his 10-year tenure ever contacted him to try and influence interest rate decisions
What's next?
The market is pricing in a one-in-three possibility of a follow-up rate hike on the first Tuesday in November.
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market → say → November
Another interest rate hike this year is "plausible", but not necessarily likely, according to former Reserve Bank of Australia (RBA) board member Ian Harper.
uncertain
hike → accord → Harper
A distinguished economist, Professor Harper was on the RBA board for a decade, from 2016 until after the Monetary Policy Board's (MPB) August meeting, when interest rates were left on hold.
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rates → leave → hold
The cash rate was subsequently increased at the bank's September meeting to a 15-year high of 4.6 per cent.
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rate → increase → cent
Speaking at a Centre for Independent Studies lunchtime event in Sydney on Wednesday, Professor Harper declined to offer his view on where interest rates might settle over a five- or 10-year horizon, but did make this comment on the short-term prospects for the cash rate.
"The bank moving again before the end of the year is plausible, from what I can see of the circumstances," he told the audience.
uncertain
he → speak → audience
"But, again, I don't have the [board meeting] papers in front of me."
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I → have → me
In a subsequent one-on-one interview with David Taylor for The Business, Professor Harper declined to characterise the chances of a back-to-back rate hike in November as "likely", repeating his assessment that it was "plausible".
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it → decline → assessment
This matches market pricing, which has the chances of a hike on Melbourne Cup Day at around a third.
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which → match → third
Harper offers rare insight into RBA board processes
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Harper → offer → processes
Much has changed since Professor Harper joined the RBA board in 2016, with a major governance overhaul sparked by a federal government-commissioned review of the bank resulting in a split between the MPB and a governance board, taking effect in March 2025.
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Harper → change → March
However, Professor Harper indicated that the biggest change to the interest rate decision-making process was that the meetings now run over two days.
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meetings → indicate → days
He explained that the board convenes at 1pm on the Monday and meets until about 5:30pm, hearing briefings from RBA staff with the opportunity to put questions to them.
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board → explain → them
He indicated that the governor will often take something of an informal straw poll at the end of that first day about what people are thinking in terms of what to do with rates.
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people → indicate → rates
Sometimes the board members will go out to dinner together before, "people go off and think about it overnight and come back the next day," Professor Harper explained.
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Harper → go → it
"The meeting starts at 9[am] and you run through to 11:30.
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you → start → 11:30
"And in that process, of course, there's further discussion, the decision gets made, the statement gets drafted, the draft gets considered, discussed and agreed."
That decision and the accompanying statement get published at 2:30pm AEDT, before the Reserve Bank governor now does a press conference at 3:30pm, a practice also recommended by the RBA review.
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governor → be → review
RBA board had dissent prior to votes being published
Another change instituted by the review was the publication of how many board members voted in favour of each option considered for rates.
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members → have → rates
Since the board began publishing the vote tallies from its July 2025 meeting onwards, there have been eight unanimous decisions and three split votes.
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board → begin → meeting
Professor Harper told The Business that such a level of dissent was fairly typical prior to the period in which vote tallies were published.
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tallies → tell → which
"The Reserve Bank Act has always provided that each member of the board has a deliberative vote and the governor the casting vote if there happens to be someone missing," he explained.
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he → provide → vote
"About 30 per cent of the time it was a split vote, 70 per cent of the time all the members are agreeing with whatever the [RBA staff] recommendation was."
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recommendation → agree → time
When asked whether any RBA governor over the past decade had ever been on the losing side of a contested vote, Professor Harper said, "That's never happened".
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That → ask → vote
"The reserve bank review made the point that the independent directors of the bank had never succeeded, if you like, in voting against where the bank was coming from," he continued.
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he → make → where
"What the review didn't point out is that, nonetheless, there were often contested votes amongst all of the board members about whatever matter it was that was being discussed.
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that → point → members
"
While there is constant speculation about whether the treasurer of the day is pressuring the RBA governor to make certain decisions on interest rates, Professor Harper categorically ruled out any attempt to influence him as a board member during his tenure at the bank.
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Harper → be → bank
He said he had heard directly from the treasurer on only three occasions — his appointment, his reappointment and via a thank you note upon his retirement from the board.
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he → say → board
"The notion that in some way the government directly influences, or the treasurer directly influences, the decision making is just wrong," he told The Business.
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he → influence → Business
Never happened, David."
Professor Harper said that does not mean that treasurers do not try to exert some influence in more public ways.
"
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treasurers → happen → ways
You'd expect the treasurer to have a view," he said.
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he → expect → view
"But that's very different from saying the treasurer in some way calls up and says, 'this is what I want to happen'.
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I → say → what
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