Philip Lowe’s new job: Former Reserve Bank governor joins Future Generation Australia’s board – and sends share price into tailspin

Former Reserve Bank of Australia governor Philip Lowe has a new job at a philanthropy-focused investment company, but shareholders were initially lukewarm.

The 62-year-old economist, who presided over 12 rate hikes in 2022 and 2023, will become chairman of Future Generation Australia, replacing former NSW Premier Mike Baird.

This is Dr. Lowe’s first board appointment since leaving the Reserve Bank in September after 43 years to make way for Michele Bullock, with Treasurer Jim Chalmers refusing to extend his term.

Founded in 2014, Future Generation Australia is Australia’s first listed investment company offering both shareholder returns and charitable investments.

Shareholders were initially unenthusiastic as Future Generation Australia shares fell 0.43 per cent to $1.16 in opening trading, while the broader S&P/ASX200 rose 0.25 per cent to 7,723.40.

But by lunchtime, Future Generation’s share price had risen 0.43 percent to $1.18, ending the session up 0.85 percent.

The announcement was made shortly before the Australian stock market opened on Tuesday.

“I think the Future Generation model is brilliant,” Dr Lowe said in a statement to the Australian Securities Exchange shortly before 10am Sydney time.

“I have always aspired to be associated with organizations that improve the wellbeing of Australians, so it is a privilege to work with Future Generation Australia’s shareholders and pro bono fund managers to support our most vulnerable young people.”

Mr Baird, who remains at Future Generation Australia as an independent director, praised Dr. Lowe for his integrity.

“Phil is one of the country’s top financial leaders and has demonstrated great integrity during his 43 years at the RBA,” he said.

“I am delighted to be working with him as a director and believe he will continue to make an enormous contribution to Australia – as chairman of Future Generation Australia and beyond.”

Under Dr Lowe’s leadership, the RBA cut cash rates to a record low of 0.1 per cent during the pandemic in November 2020 and in 2021 pledged that rates would be maintained until 2024 ‘at the earliest’.

But in May 2022, interest rates rose, marking the first of a dozen rate hikes under his watch, the most aggressive pace of monetary policy tightening since 1989, when Covid supply cuts and sanctions on Russian oil pushed up inflation .

Rates under him rose to an 11-year high of 4.1 percent in June 2023, while his successor Ms Bullock presided over another rate hike in November last year.

The 62-year-old economist, who presided over 12 rate hikes in 2022 and 2023, will become chairman of Future Generation Australia, replacing former NSW Premier Mike Baird (pictured with his wife Kerryn)

As RBA boss, he received a total compensation package of $1,037,709 and a base salary of $890,252.

Dr. Lowe, who owns a home in Randwick in Sydney’s south-east, was in charge as house prices rose by a third thanks to record low interest rates and Covid stimulus spending.

Future Generation founder and director Geoff Wilson AO said Dr. Lowe was hired for his expertise in the financial market.

“We are delighted to be working with Phil, who brings a deep understanding of the financial markets, coupled with a focus on delivering both economic and social dividends to the community,” he said.

“His leadership, experience and intellect will contribute to the board to help young Australians while delivering shareholder returns.”