New RBA assistant governor is outsider Sarah Hunter

Dr Hunter, who lives in Sydney, had been flying in and out of Canberra for the Treasury forecasting and economic modelling job.

She will now be based in Sydney at the RBA.

She fills an assistant governor gap left by the departure of Luci Ellis, who became Westpac’s chief economist.

Views on the economy

Dr Hunter will lead the bank’s economic group, which comprises economic analysis and economic research, and provides key advice and recommendations to the RBA board.

In an interview with The Australian Financial Review in February, Dr Hunter said different cohorts would be impacted very differently by interest rate rises.

“The people who are going to feel it most are recent first home buyers, who are typically in their 30s and have the longest to run on their mortgage,” she said.

“The cohorts who purchased properties more than three years ago will have a smaller mortgage and they will be well on their way to paying it back, so the interest payment impact for them will be smaller.

At KPMG, Dr Hunter led modelling published in December 2022 that estimated a cumulative increase in net overseas migration of 265,000 people over five years would boost GDP in 2030 by up to $35 billion.

During her stint at Treasury, Dr Hunter rejected claims from the left-leaning Australia Institute and union movement that profit gouging was driving inflation.

Culture shake-up

RBA insider Marion Kohler had been acting in the chief economist and assistant governor role.

Governor Michele Bullock, who selected Dr Hunter, said: “I am delighted that Sarah will be joining us. She will bring a unique and diverse perspective to the bank and the leadership team.”

Ms Bullock has outlined plans to shake up the RBA’s culture, following an independent review of the central bank, including making it easier for junior staff to challenge the views of senior colleagues.

The independent review of the RBA found the bank was at risk of groupthink because of a culture that concentrated decision-making in a handful of senior leaders and a failure to be more open to external views.

While noting extensive efforts had been made to foster a culture of debate, the reviewers said staff surveys showed that RBA employees perceived there was an incentive to express views that aligned with their managers and senior leaders.

The bank has in less than two years lost decades of experience, including former governor Philip Lowe, former deputy governor Guy Debelle and Dr Ellis.

Dr Hunter will be one of five assistant governors.

Dr Hunter’s economic modelling and expertise was highly valued by Treasury secretary Steven Kennedy, who is also a member of the RBA board.

Treasurer Jim Chalmer said she was a “terrific appointment”.

“I’ve worked closely with Sarah, I value her judgement and insights, and I know she’ll do an exceptional job at the RBA.”

Dr Hunter said: “I am honoured and privileged to be joining the RBA.

“I am very much looking forward to working with the governor, the leadership team and the RBA’s highly skilled and expert staff to serve all Australians.”

She will start at the RBA on January 29.

Dr Hunter has a PhD in economics from the University of Oxford in the UK.