In a bid to get the federal government’s reforms to the Reserve Bank of Australia across the line, Treasurer Jim Chalmers has told the Coalition he would allow future governments to retain the power to overrule an interest rate decision by the central bank.

As the ABC’s political reporter Isobel Roe explained to News Breakfast earlier this morning, it’s part of an ongoing negotiation between the Labor government and the Coalition off the back of the RBA review released last year.

“This power to overrule the cash decision is a power a government has never actually used, but it was recommended it was taken away … but it’s trying to negotiate this bill with the Coalition and they have asked for that power to remain,” she says.

“I understand the Treasurer Jim Chalmers has written to Angus Taylor … and has said that perhaps governments can retain limited scope.

“So the government would be able to use a public interest test to determine if it needed to overrule a cash decision under these reforms.”

However, it’s not the only concession that the treasurer has put forward — he has also made some to the proposed split of the RBA board, which would see a monetary policy board and a separate governance board.

“The reason the government wants this is for more diversity of views over the people who are making that cash rate decision, and it’s understood the Coalition wants all current board members on the RBA board to serve on the monetary policy board,” Roe says.

“Jim Chalmers is offering to allow all of those board members to move to the new board, unless they ask otherwise.

“So these are negotiations the Labor government and the Coalition are still in. The Coalition says it’s received Treasurer Jim Chalmers’s note, and it will make its decision soon.”