Philip Lowe will not be reappointed as governor of the Reserve Bank, the ABC reports, with federal cabinet to meet on Friday to consider his replacement.
After months of speculation, Treasurer Jim Chalmers is expected to make an announcement after the meeting.
The ABC said it understood Dr Chalmers held Dr Lowe “in high regard”, but cabinet was opting for change.
Likely successors include deputy Reserve Bank governor Michele Bullock, Treasury secretary Steven Kennedy and Finance Department secretary Jenny Wilkinson.
Ms Bullock is considered a leading contender.
Prime Minister Anthony Albanese would not be drawn on who would be chosen after he returned on Thursday from a NATO Summit in Lithuania.
“We have not made a decision on the governor’s position, it needs to be done before September,” he told Perth radio station 6PR.
“We obviously are giving it proper consideration … we will make that decision as a cabinet.”
Two of the leading candidates — Mr Kennedy and Ms Wilkinson — are public servants.
But Mr Dutton said the next governor should be someone from a non-political background given the importance of the position.
“We don’t believe it should be somebody who is familiar, if you like, to the government, somebody who has been working very closely with the treasurer or the finance minister or the prime minister,” he told Sydney radio station 2GB on Thursday.
“We don’t want somebody there who’s been involved in the political process at a senior level.”
Dr Lowe’s term as RBA governor expires in September. He has said repeatedly he would be prepared to stay on if asked.
Dr Chalmers said on Wednesday he expected to announce whether Dr Lowe would stay or a new governor would be appointed soon. He has also spoken to shadow treasurer Angus Taylor about the decision.
Dr Lowe has faced criticism following multiple interest rate hikes in the past year, after previous comments saying the cash rate would not increase until 2024.
Cabinet minister Chris Bowen rejected suggestions the next RBA chief should not be from the public service.
“That’s an insult to departmental people,” he said.
“Mr Dutton should respect that whoever is RBA governor at any given time will be governing themselves with all rigour and independence that other governors have.
“I think Mr Dutton should reflect on his comments.”
Mr Dutton also said bipartisan support for the appointment was critical.
“The Reserve Bank is one of the country’s most important institutions, like the High Court – we don’t want political appointments,” he said.
He said the governor needed to have independence because they made tough calls on interest rates “in our country’s interest, even if they’re unpopular calls”.
