Tanna, 49, will replace Donald McGauchie, whose term expires today, and Edwards, 63, will replace Warwick McKibbin, whose term ends July 30, Treasurer Wayne Swan said in an e-mailed statement today. McGauchie, chairman of Nufarm Ltd., and McKibbin, an economist at the Canberra-based Australian National University, began their terms in 2001.
The pair joins a central bank board that has kept its benchmark interest rate on hold since November last year, when it boosted borrowing costs by a quarter percentage point to 4.75 percent to contain inflation. Australia’s economic growth accelerated in the final three months of last year, the eighth straight quarterly expansion, before floods and cyclones ravaged the nation’s northeast earlier this year.
The new members “share an understanding of the macroeconomic implications of the strength of our resource sector and opportunities flowing from Australia’s location on the doorstep of Asia,” Swan said in the statement.
Tanna has experience in the resources industry, having worked at BHP Petroleum, a unit of BHP Billiton Ltd. (BHP), the world’s largest mining company. At Reading, U.K.-based BG Group, the U.K.’s third-largest natural-gas producer, she is executive vice president and managing director of its Australian unit, Swan said.
Edwards was an adviser to Labor Party Prime Minister Paul Keating from 1991-1994, wrote a biography about the former leader and served as chief economist for Australia and New Zealand at HSBC from 1997 to 2009. He will quit his current job as executive director of economic planning and development for the Bahrain Economic Development Board before joining the RBA, Swan said.
“Both appointments highlight the key medium-term issues for Australia: resources, terms of trade and productivity,” said Su-Lin Ong, senior economist at RBC Capital Markets in Sydney. “It’s quite telling that they’ve appointed someone from a resource -- and specifically a natural-gas -- background.”
Australia is undergoing its biggest natural-resource investment expansion since the 19th century. The RBA has boosted its benchmark interest rate seven times from October 2009 to November 2010 to contain inflation as the boom bolsters employment growth and spurs the local currency.
The treasurer on Jan. 31 said the central bank needed “new blood” when asked about the reappointment of McKibbin, who derided lawmakers’ “fetish” for avoiding budget deficits and said borrowing was a better strategy.
McGauchie this week told the Australian newspaper that government changes to fiscal policy and labor laws would make it harder to keep inflation in check.
The RBA’s nine-member board includes Governor Glenn Stevens, Deputy Governor Ric Battellino, the Treasury secretary and six members appointed by the treasurer.
The government forecast in November it would achieve a A$3.1 billion ($3.2 billion) surplus in the year ending June 30, 2013. Throughout flooding, a tropical cyclone and bushfires, Prime Minister Julia Gillard has repeated a pledge to eliminate the deficit by that time.
The RBA’s board meets on April 5 to set interest-rate policy and will keep its overnight cash rate target on hold at 4.75 percent, according to all 18 economists surveyed by Bloomberg News on March 18. The central bank aims to keep consumer-price inflation at 2 percent to 3 percent, and since 1993 it has averaged near the midpoint of that range.