Australia is considering appointing an outsider as the new deputy governor of its central bank, as an overhaul of the institution gets underway.

Following the appointment of long-time Reserve Bank of Australia stalwart Michele Bullock as the central bank’s new governor, the government’s looking at external candidates to fill the deputy role, people close to the discussions said. Outside candidates are on the rough short list being prepared by the government, they added.

The central bank will soon have a completely overhauled leadership team, with a new assistant governor for economics and a chief operating officer to also be appointed. Bullock is expected to start her role at the top of the bank in September.

As Treasurer Jim Chalmers’ push to revamp the institution ramps up, the new dual board structure recommended by a government review into the RBA is expected to begin in July 2024, a person close to the talks said. One board will focus on setting interest rates, the other on bank governance. The RBA review was released by Chalmers in April.

Still, there’s substantial legislative work to be done before the new structure can begin, and the timing of its implementation might depend on how quickly the changes could pass through parliament.

The restructuring of the RBA comes as the Australian economy starts to show signs of the impact of a campaign of interest rates rises by outgoing Governor Philip Lowe, with consumer spending sliding and GDP growth slowing. Running alongside this, the sources familiar with the government’s thinking said China was considered one of the most significant risks to Australia’s economic growth going forward. However, the Treasury was still not expecting the Australian economy would fall into recession despite the growing risks, they said.

--With assistance from Swati Pandey.