In accord with my former critic Keating's warning

Distance lends perspective. While on several months gardening leave - prior to starting a new career in the private sector - I wrote my "Reflections on Central Banking".

This was published in Quadrant and created considerable interest in the mainstream press but its criticisms were pretty mild. Its most quoted conclusion was probably: "I am one of those who believe discretionary control over that system is necessary. I also believe that a degree of independence - certainly independence of thought and opinion - from normal political processes is desirable, perhaps essential. But control is partly exercised by central bankers who are not elected by the populace. In a democracy, the question of accountability becomes crucial."

After a year or so in the private sector, my thinking was more unshackled and my views on independence had developed. I wrote a paper headed "Inflation: its costs, its causes and its cure", published in Policy in 1990. Its main conclusions were that inflation was much more damaging than generally believed, and that an independent Reserve Bank should be given control of inflation as its primary objective.

"Trying to achieve a lot of things is often a recipe for achieving little. In particular, it is hard for a central bank to have credibility in fighting inflation if it is also supposed to concern itself with restraining unemployment.

"This point has recently been argued by William Cole, the distinguished former public servant. He asked: 'How long has the Reserve Bank gone along with things against its better judgment - not for crude political reasons but because of its own reading down of its charter?'

"I have already argued that the existing charter could be read differently. But there is a further point. It cannot be denied that, in Australia, the attempt to achieve too many objectives has meant that the primary aim of monetary policy, the elimination of inflation, has not been achieved.

"So it seems to me that policy overall would be more effective if the Reserve Bank were to be given as its main task the achievement and maintenance of price stability.

"This could be achieved by simply deleting (b) and (c) from the list of objectives in the existing act. Or it could be achieved by a more wide-ranging revision of the act, including changes to the composition of the board, such as removing the secretary of the Treasury and replacing part-time non-executive directors by full-time executive directors."

Not surprisingly, this paper was set to create a lot of interest. Then treasurer Paul Keating was asked about his views of it. With characteristic buoyancy, he simply said something like: "Ah, Dr Jonson. The principal architect of the low interest rates that have caused our problems." When asked for comment I should simply have said "That is just bullshit", but I was still inhibited by the tradition of the respect due to the treasurer by an officer of a non-independent central bank.

I called the then governor of the bank, Bernie Fraser, and asked to be allowed to review the papers I had written during the time alluded to by Keating.

Despite my point that the attack concerned my time as a loyal officer of the bank, Fraser refused this request. He advised that, as I had put my head above the parapet, I should cop the consequences. When I pressed the point he conceded that the deputy governor, John Phillips, would review my papers for the board and provide his opinion. Phillips later phoned to confirm that my memory was correct.

With no other support from my former employer, I sought legal advice from a highly regarded defamation lawyer in a leading law firm. He agreed to take my case but after a day or two he called to say that, for the first time in his career, he had been told by his partners he could not take the case because it would put at risk other matters then before the treasurer.