Most experts and industry leaders have praised the RBA for their handling of the COVID-induced recession. Surprisingly, someone who isn’t singing their praises is former RBA Governor Ian Macfarlane.

This public critique came on a podcast, where Mr Macfarlane said that cutting interest rates to near-zero hasn’t done any good, and warned that this kind of loose monetary policy will have long-term costs for pensioners; costs that we may not see for decades to come. The entire retirement income industry has never had to operate with negligible interest rates before, and there will be growing pains, he says.

Mr Macfarlane said that he has been disappointed in every interest rate cut since 2015, as well as the recent quantitative easing measures.

The former RBA boss also said that technology and globalisation has more of an impact on inflation than interest rates, but that central bankers don’t want to accept their limitations. Weak inflation during a period of low interest rates should have made this clear, but central bankers don’t want to admit this.

However, he did concede that “once the majority do it, you really have no choice.” If the RBA refused to follow other central banks, the Australian dollar would have jumped “through the roof”.