There was good news on Thursday.Another solid month of jobs growth left the unemployment rate steady at 4.1% in January.The impressive resilience of Australia’s jobs market has been the positive story of the post-pandemic economy.We have come out the other side of the global health crisis and a once-in-a-generation inflationary event with a jobless rate that has tracked consistently one percentage point below where it was through the dog days of the late 2010s.

There has never been a higher share of us in the workforce.For so many households, this has been the difference between experiencing cost-of-living pressures and suffering a full-blown crisis.But is the jobs market too good?This was essentially the argument, in the crudest terms, being made by Tim Wilson within 48 hours of being appointed as the new shadow treasurer.The Liberal MP, who scraped through in the last election by the skin of his teeth, is out talking to the press and making waves.Sign up: AU Breaking News emailWhat caught many people’s attention were his remarks, reported in the Nine newspapers, that the Coalition was prepared to “review” the Reserve Bank of Australia’s 80-year-old “dual mandate” of pursuing both low and stable inflation and full employment.

Wilson reckons the RBA has been too soft on inflation.His suggestion is that the central bank should have kept rates higher for longer to make sure inflation stayed under control in 2025, even if that meant a weaker economy.Jim Chalmers was quick out of the gates on Thursday morning with a media release headlined “Tim Wilson’s plan for higher unemployment”.After welcoming the latest jobs data, the ACTU secretary, Sally McManus, also went on the attack.“It’s disgraceful that Tim Wilson’s first economic policy is to say that more Australian workers should be unemployed,” McManus said.

Wilson is not the first conservative politician to say their country’s central bank should be solely focused on getting inflation under control.For example, Donald Trump’s vice-president in his first term, Mike Pence, was campaigning on ditching the employment part of the US Federal Reserve’s dual mandate as recently as 2023.But it’s an odd line to be pursuing as the Liberals try to win back votes from the populist right wing.Mervyn King, the former head of the Bank of England, in 1997 branded as “inflation nutters” those who said monetary policy should be set regardless of the economic fallout.In an interview with Guardian Australia’s Dan Jervis-Bardy on Thursday, Wilson clarified that he “certainly supports the dual mandate”.

“But the question is, is the RBA getting that dual mandate right? They have got it wrong,” he said.“We’ve ended up in a situation where we’ve got inflation that has been led to be out of control.They’ve clearly misread inflation, so they’re clearly not putting enough emphasis on inflation.”Jonathan Kearns, the chief economist at Challenger and a former senior RBA official, says a central bank with an employment and inflation mandate is uncontroversial, and backed by history and research.“We have the dual mandate because monetary policy has an impact on employment as well as inflation.

You want to target inflation, subject to avoiding significant costs on employment.”Luci Ellis, Westpac’s chief economist and a former head of the central bank’s economics department, says “it’s long been understood that even a central bank with only an inflation mandate would care about employment”.But Kearns says there is evidence that the RBA made an error of judgment last year by cutting interest rates three times, only to have to quickly reverse course after inflation ended 2025 back above 3%.“How you weigh inflation and employment is going to influence the path of monetary policy,” he says.But he fundamentally disagrees that the RBA is now structurally too focused on jobs over price stability.

“A lot of what we might call policy errors have been more about judgment, not an inappropriate balance of inflation versus employment.”Ellis goes further.She says the change to the RBA’s agreement with the Albanese government on the conduct of monetary policy introduced a stricter interpretation of achieving the inflation goals by explicitly targeting the midpoint of the 2-3% target range.“My read on their [the RBA’s] policy decisions and rhetoric since the new statement is that, if anything, they have become even more focused on tiny deviations in the inflation trajectory.”Whether Wilson, in his heart of hearts, is an “inflation nutter” will remain an open question – and one his political opponents will be keen to ask every chance they get.

Patrick Commins is Guardian Australia’s economics editor