When pressed by Labor’s Peta Murphy on why the bank appeared to be supporting conservative think tanks, Dr Lowe said the RBA had been providing both the CIS and Sydney Institute financial assistance since the early 2000s. Bank records showed each organisation received an annual contribution of $20,000 since 2006.
“At the time, there were not many think tanks in Australia and the bank wanted to support independent not-for-profit institutions that were contributing to public policy debates that were relevant to our mandate,” he said.
“The bank does not provide financial support to entities that have connections with political parties and seeks to be even handed with the purpose of supporting policy analysis from varying perspectives on issues important to Australia.”
The governor said the bank received reports from both the CIS and Sydney Institute plus invitations to events they hold.
Dr Lowe said the bank considered requests for support if the proposed activity furthers the RBA’s stated mandate which includes “promoting the economic prosperity and welfare of the people of Australia”.
But, he added, he had not received any request for support from independent or centre-left organisations such as the Grattan Institute, Per Capita or the Australia Institute.
The CIS has been in operation since the 1970s and produces regular research across a range of areas including finance, government expenditure, taxation, housing, population and regulation. The Sydney Institute started in 1989 and holds regular policy forums that cover issues including the economy and politics.
Grattan Institute chief executive officer Danielle Wood said she would be putting in a request to the Reserve Bank for financial assistance.
“I think we have been very much a part of the economic policy debate with a vigorous focus on data and without an ideological approach to our research,” she said.
“We also have an Australia-wide approach to what we examine and I think it fits perfectly with the Reserve Bank’s mandate.”
Ms Murphy said public confidence in the RBA could be undermined if it continued to financially support only one “side” of the policy debate.
“There is a clear problem with the RBA using taxpayer funds to ‘contribute’ to two deeply conservative think tanks and not to any independent or progressive think tank,” she said.
“The response to my questions doesn’t give any explanation as to how this largesse with taxpayers’ money continued to be given every year for at least 15 years to only the CIS and Sydney Institute, or what it was given for.”
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.