The latest appointments to the Reserve Bank of Australia (RBA) strike a balance of stability and fresh thinking, Treasurer Wayne Swan says.
Cabinet approved the appointment of Philip Lowe as the bank's deputy governor and Australian Industry Group {AiG) chief executive Heather Ridout as a board member on Monday afternoon.
"I think their appointments will ensure the ongoing strength of the RBA board, which of course continues to operate at a very difficult time in the global economy," Mr Swan told reporters in Canberra.
The treasurer said it was up to Ms Ridout to decide whether she would continue working as a lobbyist with the AiG.
She had been appointed to the RBA because of her experience, talent and committed advocacy for the business community rather than any views she held on particular issues, he said.
"She's got a very deep understanding of what's going on, not only in the wider economy but most particularly in the manufacturing industry and I think she'll serve the country well on the board."
Change to the federal government's Fair Work Act is one area about which Ms Ridout has been outspoken and critical of Labor.
Mr Swan said she had been vocal on a range of issues but that was no impediment to her being appointed to the board.
"She had a range of opinions to express [recently] and not all of them were ones that were seen uncritical of the government," he said.
"There's been plenty of people who have sat on the board who have made comment from time to time."
Ms Ridout is the fourth woman to be appointed to the board. She will boost the number of women on the nine-person board to three. The others are Jillian Broadbent and Catherine Tanna.
Ms Ridout said the appointment was an honour.
"I have an abiding interest and commitment to strong and balanced economic policies, and to have the opportunity to serve Australia in this role will be a great privilege," she said in a statement.
She will replace Graham Kraehe, whose term expires in February.
Mr Kraehe had made a valuable contribution to the deliberations of the RBA, Mr Swan said.
"His experience and knowledge of business has been of considerable benefit to the board's monetary policy deliberations," Mr Swan said.
Dr Lowe has been appointed for seven years. He will succeed Ric Battellino, who retires from the RBA in February after 39 years.
Mr Swan said Mr Battellino had made an invaluable contribution to the RBA and Australia's economic stability over four decades.
"He of course has been at the bank in a period of great turmoil in the international economy in recent years," he told reporters in Canberra.
The fact that Australia, unlike most other developed economies, had avoided a recession was testament to the hard work of Mr Battellino and the RBA more generally, Mr Swan said.
On Tuesday Mr Battellino will sit in on his last RBA board meeting as it decides whether to lower the cash rate for the second consecutive month amid growing concerns about stability in the eurozone.
Dr Lowe started at the RBA in 1980, and has served as the Head of Financial Institutions and Infrastructure Division at the Bank for International Settlements between 2000 and 2002.
Between 2004 and 2009, Dr Lowe oversaw the RBA's work on issues related to financial stability and payments system policy.
He has served as the economic assistant governor since April 2009 and has been the chief economic adviser to the governor and the Reserve Bank board.
Dr Lowe holds a PhD from the Massachusetts Institute of Technology and a Bachelor of Commerce (Honours) in Economics/Econometrics from the University of NSW.
Acting opposition treasury spokesman Andrew Robb said Ms Ridout's appointment was timely given manufacturing was under enormous pressure.
Mr Robb said her contact with manufacturers in her capacity with the AiG was very valuable.
"I do think her daily contact with manufacturing is what Heather brings to the table," he said.
"If she stepped away from her current role, that would be missing.
"She has got the pulse of what's going on in the hands of thousands of manufacturing companies."
Ms Ridout was extremely experienced and capable, Mr Robb said.
"I think she will exercise a measure of independence on the Reserve Bank board."
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