Former Reserve Bank governors, the outgoing Future Fund chairman and prominent economists have joined a growing chorus of voices urging the treasurer to keep powers to override interest rate decisions.
A review of Australia's central bank last year called for the veto mechanism to be ditched to bolster the RBA's independence.
But resistance is building to the government's plan to scrap the never-used power spelled out in section 11 of the RBA Act.
A range of high-profile figures said the mechanism should be kept during a hearing on Thursday, including former RBA governors Ian MacFarlane and Bernie Fraser and outgoing Future Fund chairman and former coalition treasurer Peter Costello.
The Greens have been agitating for the power to stay in place, with economic justice spokesman Nick McKim vowing to move an amendment in parliament to keep it.
“As the Reserve Bank was smashing renters and mortgage holders with interest rate rises, (Treasurer) Jim Chalmers was working on a scheme to remove his own power to intervene," Senator McKim said on Thursday.
Michele Bullock, current governor of the central bank, used her appearance at the parliamentary hearing to confirm she was "agnostic" on the change.
"I'm comfortable which ever way the government decides on this," she told the hearing on Thursday.
Two of the three reviewers appeared before the committee and stepped through the case for scrapping the power.
Renee Fry-McKibbin, an economics professor at the the Australian National University, said the power had never been used, ditching it would strengthen the RBA's independence, and not a common feature internationally.
Also, under the changes, the parliament - rather than the government of the day - would still be able to step in if things were going awry.
Mr Macfarlane, governor of the RBA between 1996 and 2006, said eliminating section 11 would be a "big mistake".
"After decades of reflection, I and a number of my colleagues have come to the conclusion that section 11 would be valuable in resolving once or twice a century situations where there are irreconcilable differences between the bank and the government," he said.
Mr Fraser, who lead the central bank between 1989 to 1996, said dumping the rule could actually jeopardise the RBA's independence.
"Rather, the likelihood is that, sooner or later, the vacuum would be filled with alternative processes aimed at clipping the bank’s independence," he wrote in a submission.
The former governor said section 11 laid out a "fair and reasonable process" for treasurers to challenge the RBA and served as a "safety valve".
Mr Costello said it was a "very difficult power to execute" that could only be done in "very extreme circumstances".
"I can't see that you're going to improve things by getting rid of section 11," he said.
Economists from the Australia Institute were also in favour of keeping the government's power to step in, as was former Treasury official and now George Washington University assistant professor Steven Hamilton.
"I would be more comfortable leaving it as it is," he told the committee.
