Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I thank the member for Riverina for his contribution. He's outlined very well why we won't support the Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023. I'm pleased that we've come to the position that we have in relation to not supporting this bill, because I didn't support it from the outset. What is proposed to be done in this bill—the government and all of us elected members of this parliament handing over absolute power to an unelected body—is, I think, a danger to our democracy. What I find interesting is that this isn't the only piece of legislation to go through this House that allows for this sort of thing to occur, where ministers take a hands-off approach and go: 'It's up to the bureaucrats—it's up to the Public Service or whatever other body we have set up.' I think that is a very grave danger to the foundation and stability of our democracy.

It's interesting that there has been much debate and discussion over the years—as Deputy Speaker Wilkie and the member for Melbourne would know, having joined me in this place in 2010—about the conduct of our banks et cetera. It finished up in a royal commission. What a lot of people probably don't realise is that there was actually a royal commission well before that. Back in 1935 there was a royal commission that was appointed to inquire into the monetary and banking systems that were then in operation in Australia. The reason it was appointed was that there was concern that the banks weren't doing their job and were actually making the Great Depression worse.

It's interesting to read some of the comments in that royal commission report. I want to thank a good friend of mine, Professor Bill Mitchell, for the work he's done on some of this. I'll quote his work. He's pulled these paragraphs out of the royal commission report so that I didn't have to go back and read through it again. In paragraph 143 of that report, it says:

It is essential for a central bank that its relations with the Government responsible for monetary policy should be close and cordial in order that there should be consistency between Government financial operations and those of the Bank.

Well, what have we heard in the past week or so? The complete opposite of that. We've heard the Treasurer say that the Reserve Bank is 'smashing our economy', and we've heard a former Treasurer say that they've been hitting themselves in the face. That, to me, doesn't speak of a 'close and cordial' relationship between the government and the Reserve Bank to ensure consistency between the government's financial operations and those of the bank—far from it. We've also heard the comments by the Reserve Bank governor on her concerns about government spending, both federally and across the states.

Why would we go down the track proposed in this bill, then, of removing the accountability of the Reserve Bank through the government, under section 11? I fully believe that section should be retained and never done away with, because the drafters of the legislation, back in 1957 or 1958—it was enacted, finally, in 1959—understood the necessity of the elected representatives in this parliament maintaining watch and power over our non-elected bodies.

To go back to that 1935 report, it goes on further to say:

In our view, proper relations between the two authorities are these. The Federal Parliament is ultimately responsible for monetary policy, and the Government of the day is the executive of the Parliament. The Commonwealth Bank—

it's the 'Reserve Bank' in modern parlance—

has certain powers delegated to it by statute, and the Board's duty to the community is to exercise those powers to the best of its ability. Where there is a conflict between the Government's view of what is best in the national interest, and the Board's view … the Government should give the Bank an assurance that it will accept full responsibility for the proposed policy, and is in a position to take, and will take, any necessary action to implement it. It is then the duty of the Bank to accept this assurance and carry out the policy of the Government.

Well, that has been done through the statement of principles that the Treasurer signed and provided to the Reserve Bank. The Reserve Bank's remit is twofold. It's to deal with inflation and to ensure full employment. So the Reserve Bank are doing their job only for the Treasurer to then turn around and say, 'I don't like what the Reserve Bank is doing.' Well, have that discussion but have it in a cordial way. I am sure the Treasurer and the Reserve Bank governor speak all the time. But to go out publicly and demonise the Reserve Bank and the governor and the rest of her team for doing the job that is actually mandated for them to do, which is tackle the inflation challenge as well as full employment, is an attempt, in my view, by the Treasurer to offload the responsibility for his part of the equation. It is about time the Treasurer accepted responsibility for what they've failed to do to deal with the inflationary pressures.

Hence I fully support the position that we as a coalition have now taken to oppose this bill, because I believe that the structure of the Reserve Bank should be retained, along with section 11. While I accept it has never been used, I believe fundamentally, for the protection of our democracy, that that provision should be retained because we never can say categorically in the future that we know that at some point that won't need to be used, heaven forbid. I hope it never has to be used. I hope that the cordial working relationship between the government of the day and the Reserve Bank is maintained and strengthened for the benefit of our country as a whole. I think the words from the 1935 royal commission report remain as valid and prescient today as they were then. I oppose the bill, and I am pleased that as a coalition we have taken the position that we have.

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