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One Nation treasury spokesman Barnaby Joyce has signalled a radical reshaping of the Reserve Bank of Australia as one of the party’s top priorities, arguing that the institution should have powers to pressure governments to reduce inflation by cutting spending and red tape.
While admitting that One Nation had not yet become a credible party on economics, Joyce told this masthead that the populist insurgents would review the RBA’s operations and scope, which could lead to a more hawkish inflation target than the current 2-3 per cent band.
He also revealed that he will publish a book before Christmas, offering an inside view of One Nation. The book will explore whether the populist explosion is “unique to One Nation” or representative of “the demise of the body politic, as it was”.
Debates about the Reserve Bank tend to centre on whether it is sufficiently focused on bringing prices down, after five years of underlying inflation sitting above 2.5 per cent.
But Joyce said the central bank “kept on missing” its inflation target because it had one hand tied behind its back and was responsible for setting rates only, which he described as a “blunt instrument”.
As a fix, the type of which has not been advocated by mainstream economists or experts, Joyce said the RBA could turn into an adviser to the government on the cost of living, publishing advice on spending and regulations that make things more expensive.
“There is a beneficiary of 2-3 per cent inflation: it’s the government because you have bracket creep, and they make a windfall gain,” Joyce said.
“The government has moved to making a Reserve Bank less independent. I believe it’s got to go in the completely opposite direction – more independent. And I think, in that discussion, the bank must clearly state: this is the target money the government should be putting into the economy, and no more.
“The Reserve Bank should be giving a critique. If not a target, at least commentary about where the government should be on the release of funds. Surely, there is a role there for the Reserve Bank to say, well, I’ve got two choices: I can put up interest rates [or] give a directive to the government, whether it takes it up or not, to reduce regulation and spending.”
Joyce said that Treasurer Jim Chalmers had turned the RBA into a bogeyman when it was public spending that was driving up inflation. Government outlays, including at state level, have been at near-record highs, though the most recent bout of inflation was driven more by private investment.
Opposition Leader Angus Taylor launched his firmest attack on One Nation in a speech last week, claiming that its spending commitments would lead to a sovereign debt crisis and several interest rate rises.
Asked if One Nation could be taken as a credible outfit on economic policy, Joyce said: “I accept that One Nation is in the process of developing it”.
The former Nationals leader could not cite any spending offsets other than those already pledged: cuts to departments and the NDIS to pay for expensive promises such as putting 5 per cent of GDP towards the military, income splitting, cutting fuel, alcohol and tobacco taxes, and raising the tax-free threshold for retirees.
He would not answer a question on whether One Nation would have to sack frontline public servants.
The former Nationals MP, who has given mixed messages on whether he will run in the Senate or lower house, backed himself against his Treasury counterparts and said that the government was deliberately starving One Nation of staff to stop the party from developing policies.
“I look forward to the debate,” he said. “I think I’m a fair chance against [the Coalition’s] Tim [Wilson] or Jim [Chalmers].”
On the RBA, Joyce argued that the body should provide advice on cutting regulation. Comparing his envisioned RBA role to that played by the Productivity Commission, Joyce said construction and planning regulations, cigarette excise, and electricity and energy market rules were all worsening inflation.
It’s not clear why Joyce would not leave such advice to the Productivity Commission rather than expanding the role of the Reserve, which was established in 1960 as a central bank and banknote issuer, not a policy advisory. Central banks around the world do not perform the functions for which Joyce argued.
“The most inflationary aspects within the economy are things that are either paid for or highly regulated by the government,” Joyce said. “The price of shoes, price of shirts have got nothing to do with government. The cost of building a house is a classic one. About 20 to 25 per cent of the cost of housing is regulation. There’s a whopper. The price of alcohol is regulated by the government.”
Joyce also said that the cost of land should be included in the consumer price index.
One Nation’s opponents may use Joyce’s intervention to fuel the argument that One Nation would hurt Australians, given that a more hawkish inflation target might require higher interest rates. But across-the-board spending cuts could put downward pressure on prices and assist family budgets.
The Kiel Institute, a European outfit that focuses on economics, looked at 365 elections since 1948 in research that found populist or extremist parties did better when inflation was high, as voters felt a sense of unfairness.
The RBA has come under fire from all sides of politics in recent years, with accusations that it has moved too slowly to combat inflation. Labor reviewed the bank last term and has implemented a series of reforms. Headline inflation is 4 per cent, and underlying inflation is 3.6 per cent, well above the target.
In a National Press Club address last month, Hanson was asked about US President Donald Trump’s undue exertion of pressure on US central bankers. She rejected his approach and said: “If you actually rein in your spending … that is going to [reduce inflation and interest rates], not reflecting on the RBA.”
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Paul Sakkal is Chief Political Correspondent. He previously covered Victorian politics and won a Walkley award and the 2025 Press Gallery Journalist of the Year. Contact him securely on Signal @paulsakkal.14.Connect via X or email.From our partners
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