Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

Finally, I get to speak on the Reserve Bank Amendment (Enhanced Independence) Bill 2008 after the interruptions that we have had to our business. I note that this whole bill is really just a stunt to try to show this government as being economically conservative. In fact, the then Leader of the Opposition for many months continued to state ad nauseam, ‘I’m an economic conservative and I’m proud of that fact.’ That was Kevin Rudd’s mantra for virtually the last 12 months. He had to repeat that mantra when his advertising agency told him to because when Labor were last in office the budget was $10 billion in deficit. This was after that whole period leading up to the election when the Labor finance minister at the time, Kim Beazley, continued to assert that the budget was in surplus, as they had predicted in their budget before that. Not only was it more than $10 billion in deficit at that time; they had run up $96 billion of debt in their time in government.

If you look at the history of this great country, it is very interesting to note that, in the 90 years from Federation—when we had to build a parliament, a city and all the infrastructure that we needed and when we had world wars and other skirmishes all around the globe—we accumulated as a country a total of $16 billion of debt. So it took us 90 years to accumulate $16 billion of debt. Over the next five years that $16 billion, which took 90 years to accumulate, was repeated every year. So in five years we went from $16 billion in debt to $96 billion in debt. As a result of the good management of the Howard coalition government, we got rid of that $96 billion of debt. The present government now finds itself in such a magnificent position financially due to the Howard and Costello budgets over that period of government.

At the same time that we were reducing this country’s debt of about $96 billion—in fact, we were in surplus to the tune of about $60 billion by the time we left government—the state Labor governments were increasing their debt. If Labor do not do it federally they certainly do it at the state level. In fact they have now increased government debt in Australia almost to the same level as federal Labor had when they were in government from 1983 to 1996. So the states are still increasing their debt—and that is despite the fact that they have had a windfall revenue flow from the GST, and from land taxes because of the value of land. They have continued to increase their debts even with those extra flows.

It is very interesting to look at the example of what happened in South Australia. Despite them probably getting about $500 million extra in revenue than they would have under the old system they frittered it all away. One of the ways they did that was very easy to pick when you look at their employment record. They predicted that they would increase employment in the public service by about 222 people a year—one per cent. You would say that that was pretty reasonable, and after five years you would expect about 1,100 extra people in the public service in South Australia. In fact the increase was 11,000, not 1,100. That is where most of the extra revenue has gone—not through the building of better infrastructure, because we all know that in South Australia they have done very little. In fact, they have been very much a do-nothing government.

This economic conservatism is a mantra; it is a catchphrase; it is political rhetoric; it is a label. And it is about as convincing as a leopard changing its spots. But the now Prime Minister continues to draw upon that sort of mantra to try to convince people he is a conservative. For the first time we have seen a leader doing an advertisement in this country to try to convince people he is an economic conservative, despite the fact that Labor failed to support virtually all the measures that the Howard government took to put this country in the good position that we now enjoy. At every turn Mr Rudd tried to frustrate those efforts by the previous government to enhance its strong economic record.

It follows that, as long as times are good, pretty much anyone can cast themselves as an economic conservative, because the Labor government have the money to spend, whereas when we came into government—as I said previously—we were $96 billion in debt and were facing, in one year alone, a $10 billion black hole. Those opposite are faced with being perceived in such a way because of their appalling record of inability to manage the economy. All of a sudden perceptions count a lot for Labor.

The Prime Minister had to do some pretty slick branding that would address perceptions about previous Labor governments’ inability to manage the economy. That branding has to be full-on and repeated ad nauseum, because the Australian public is pretty much aware that Prime Minister Rudd and his union mates will ruin this economy with their heavy-handed inflationary wage policies.

Perceptions are also what the Reserve Bank Amendment (Enhanced Independence) Bill 2008 is all about. It is a stunt. It is yet another public relations exercise—a bit like calling yourself an economic conservative. This time, however, the perception, notwithstanding its title, does nothing to enhance the independence of the Reserve Bank. The bill makes the Governor-General rather than the Treasurer responsible for the appointments of the Governor and the Deputy Governor of the Reserve Bank of Australia. Their appointments will be made by the Governor-General in Council and can be terminated only with the approval of both houses of parliament in the same session of parliament, and they can no longer be dismissed by ministerial fiat.

I suspect that this is to be used as a further template for appointing a Governor-General in a minimalist republic. Do not be surprised if this template for appointment of the Governor and the Deputy Governor of the Reserve Bank is used in the future to bring on a republic. Some people will agree with a republic and some people will not, but I believe that this is being used as a template for the future.

In practice, however, there is not a serious threat under the existing arrangements to the independence of the Reserve Bank of Australia. Senior officers have always enjoyed a high degree of effective independence, despite former Prime Minister Keating suggesting he had the Reserve Bank governor in his pocket, which treated the position with contempt. Despite that, governments other than that one have recognised that the Reserve Bank governor and deputy governor enjoy a strong reputation.

International capital markets would have reacted severely, by marking down Australian dollar denominated assets, in response to any attempt to compromise the Reserve Bank of Australia’s independence. Section 11 of the Reserve Bank Act 1959 already provides a procedure for resolving policy differences between the RBA board and the government of the day. In fact, the Treasurer can override a decision of the RBA board but the procedures are so politically demanding that their nature reinforces the Reserve Bank’s independence in the conduct of monetary policy.

That no treasurer has invoked these procedures strongly suggests that the existing arrangements already afford the RBA a high degree of effective independence. In fact, the RBA’s willingness to raise interest rates in the middle of the 2007 campaign clearly shows that they are not politically intimidated by any government—and so it should be. The new arrangements proposed in this bill may instead err in the direction of affording the Reserve Bank’s senior officers too much protection. Under this bill, the Treasurer would surrender the right to fire the central bank boss, even if the governor was irresponsible or incompetent. The only grounds for dismissal would be insanity, insolvency, or if the office holder took a second job—which is highly unlikely at the pay that they get. Central bank independence needs to be balanced with accountability for performance, especially in relation to inflation outcomes. Under the new arrangements, it will be even more difficult to remove an RBA governor for poor performance, and I can imagine an opposition using any opportunity they could to make it difficult for a parliament to actually dismiss a Reserve Bank governor. I am sure it would become very political, whereas under the present arrangements, whilst there may be some sort of criticism, the action would be over pretty quickly.

The proposed laws on the termination of office are part of a package which the government hopes will give the Reserve Bank greater independence from ministerial interference. This is at odds with the statement by the then Leader of the Opposition, Kim Beasley, on 11 December 1996 when he said about the Reserve Bank:

The Reserve Bank is overly concerned about the wages position; it has been for some considerable time.

And later he said:

The inflation rate under us—and it will be so under you too—is less than anticipated and therefore, there is room for far more movement in interest rates than immediately meets the eye. I hope the new Governor of the Reserve Bank will bear that in mind.

This is the attitude of the Labor Party, whether in government or in opposition. This unsubtle interference sits well with Paul Keating’s quote that when he was Labor treasurer he had the Reserve Bank in his pocket.

This bill is nothing but a stunt. The timing of the bill is quite ironic. We know the Reserve Bank directors are prepared to use interest rate rises to fight any threat of rising inflation. I wonder how the Reserve Bank directors are feeling about Tuesday’s inflationary budget that actually manages to increase spending by 1.1 per cent in real terms. That is 1.1 per cent above the inflation rate—4.5 per cent in reality. So we have increased spending in the coming year, and by twice that further down the track, and increased taxation and unemployment despite hundreds of spending cuts which most unfairly target rural and regional Australians. There is no doubt that this budget was a kick in the guts for people who live in rural and regional areas.

But not only that, this bill is sloppily drafted and reflects the poor handiwork of those who would call themselves economic conservatives committed to an independent central bank, while at the same time being clueless enough to submit a bill that would allow a corrupt, misbehaving Reserve Bank governor to remain in office because one house of parliament chose not to vote him or her out. The Reserve Bank is a respected, independent organisation. This bill adds nothing to the value of the organisation; rather it is all about perception. The new arrangements in relation to the RBA^’s senior officers reinforce its independence on paper, but in practice the new government has addressed a non-existent problem by taking measures that may actually detract from central bank accountability rather than enhance central bank independence.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

I rise to speak on the Reserve Bank Amendment (Enhanced Independence) Bill 2008. I welcome the opportunity to make a contribution to the debate on this bill. The independence of the Reserve Bank of Australia is critical to the process of settling monetary policy in Australia. Transparent deliberation by the Reserve Bank of Australia gives the public and business confidence in the Reserve Bank. This bill strengthens the independence of the Reserve Bank of Australia, the RBA, while it and other measures support transparency. With the important role the RBA plays and the impact its decisions, warnings and commentary have on business and everyday working families, this bill improves the bank’s operation and allows investors, business and the general public to have even greater confidence in the Reserve Bank.

Having a central bank that is not independent and free from political interference creates a dangerous situation in which monetary policy decisions are potentially tainted rather than suiting the needs of the economy. It is argued—and this is an argument that I agree with—that an independent central bank provides better advice, insights and warnings to government and business. An independent central bank operates a more credible monetary policy because it is expected to stay the course despite short-term political winds. It is also critical that, from time to time, the Reserve Bank gives advice to the government, and of course it is assumed that the government considers the advice.

In their last term, the RBA gave no fewer than 20 warnings to the previous government on the need to combat capacity constraints by investing in infrastructure, workforce skills and innovation. There were 20 occasions when the Reserve Bank’s warnings were ignored: in August 2007, Reserve Bank Governor Glenn Stevens to the House Standing Committee on Economics, Finance and Public Administration; in August 2007 in their statement on monetary policy; again in June 2007 and prior to that in May 2007 in their statement on monetary policy; twice in February 2007; also in November 2006, and so on and so on. There were 20 warnings over a period of three years. They were simply ignored.

From these warnings we see the growth of the very taproot of inflation. Inflation is real and, no matter how imaginary, fanciful or fairytale-like members opposite claim it to be, Australian working families know that prices keep going up. Families in Rockingham, Kwinana and Mandurah have seen vegetable prices going up by more than 10 per cent; bread by nearly 20 per cent; and milk, eggs and fresh fruit all by double digits over just the past few years. In the south of my electorate, in the city of Mandurah, we see much media coverage on the incredible growth and associated rise in house prices and property values. According to Real Estate Institute of Western Australia data for September of 2007, Mandurah’s median house price is $424,000. My constituents living in the new suburbs of Mandurah live the daily impact of the inflation and rate rises and expect all of us in this place to do all we can to take the pressure off inflation, which takes the pressure off interest rates.

This amendment bill brings Australia up to speed with the rest of the world’s developed economies that already have fully embraced independent monetary policy as best practice. This bill raises the statutory independence of the governor and deputy governor to the same level as the Commissioner of Taxation and the Australian Statistician. Their appointments will be made by the Governor-General in Council and can only be terminated with the approval of the parliament.

The calls for more open and transparent operations have been gathering momentum over the years. In December 2000, an editorial in the Australian Financial Review stated:

... private-sector decision making is helped by regular information ... Whether it is monthly statements, the release of minutes or more public hearings, it is a legitimate and important subject for debate.

It has taken eight years but we are finally having the debate and putting things into place to make the operations of the RBA more transparent, with better information created by the RBA and better information about RBA views, warnings and insights.

In a statement on the conduct of monetary policy released by the RBA governor on 6 December 2007, the RBA committed to measures aimed at increasing the transparency and enhancing public understanding of the conduct of monetary policy. Now a statement will be replaced on the afternoon after each board meeting explaining board decisions on monetary policy, irrespective of whether or not there is a change in the cash rate target. As in the US, the minutes of meetings will be released publicly as soon as possible after the meeting.

The governor has said that the Reserve Bank will continue to extend the scope of the economic forecasts in its quarterly statement on monetary policy. Integral to best practice monetary policy is the importance of having high standards in the selection of members of the RBA board. This bill establishes a register of eminent candidates—to quote the Treasurer—‘of the highest integrity’. This register, maintained by the Secretary of the Treasury and the Governor of the Reserve Bank, will provide a much needed safeguard in the process of selection of members of the Reserve Bank board. It is, however, incumbent on the secretary and the governor to ensure that candidates for the board have the knowledge, the analytical skills and determination to govern our nation’s monetary policy. As such, I believe that a merit based system of selection of candidates for the RBA board is good practice and adds to the already significant measures introduced by this government.

It is disappointing that the members opposite, when in government, demonstrated why this bill is so important. In a crude example of ‘jobs for donors’, Mr Robert Gerard was appointed to the RBA board on 20 March 2003 until he resigned in disgrace on 2 December 2005. What were Mr Gerard’s qualifications for his role on the board of the RBA? An article published in the Australian on 3 December 2005 states:

Robert Gerard’s political ties run deep in the Liberal Party.

Frankly, I do not think there is anything wrong with that. The article states:

He comes from Adelaide establishment stock..

I do not really see a problem with that either. It continues:

His father Geoff was a state Liberal Party president—

I certainly do not see anything wrong with that—

and through the years the electrical goods tycoon has poured up to $2 million into the party’s coffers.

On the face of it, there is no problem in making political donations in an open democracy and declaring those donations but, for some, such close ties to the party in government might be reason enough for Mr Gerard to not have a place on the board. If I have not made it clear, I do not agree with that. But it was not that that forced him out; it was tax evasion—tax evasion through a sham tax haven insurance scheme. The dodgy business dealings did not emerge subsequent to his appointment; almost unbelievably, the allegations were being aired as the former Treasurer appointed Robert Gerard to the board.

According to an article published in the Australian on 30 November 2005, Mr Gerard, the single-largest Liberal donor in South Australia, was battling the ATO in the Federal Court over the tax evasion allegations when the former Treasurer, Peter Costello, appointed him to the Reserve Bank board. So here is a bloke who was paying more in Liberal Party donations than he was in tax. What does that tell us about the previous government’s system of appointing people to boards—boards, I would like to add, that are crucial to the effective governance of our country? In this case, it is a board which makes decisions about interest rates; in this case, it is a board which makes forecasts, insights and observations about the state of our economy and the challenges and threats that we face.

Is this a case of high-quality members being selected for their skills and integrity, or was it the case that a more important selection criterion was the capacity to run a tax sham and the amount of money being donated to a political party? The appointment of Robert Gerard was an outrage and a travesty committed against one of the most important institutions in this country—the Reserve Bank—and against homebuyers and businesses, who have to pay the interest rates that are determined by the Reserve Bank. It was a travesty in so many different ways. Mr Gerard voted to raise interest rates—something that has an impact on hundreds of thousands of people’s lives—at the same time as he was in dispute with the ATO over his tax bill. In an article in the Age on 1 December 2005 it was revealed that the tax commissioner had:

… lodged a charge with the Australian Securities and Investments Commission in September 2003 with a maximum liability of $250 million, effectively preventing—

Gerard—

from selling any assets without settling his liability to the ATO.

And still he was appointed, and still he stayed there. The article continued:

The claim was not lifted until February 2004.

An out-of-court settlement of … $150 million in late 2003 ended a 14-year Tax Office investigation into Mr Gerard’s involvement in a Caribbean tax haven … its investigators labelled a “sham”.

I do not think the point can be overemphasised. Mr Gerard was a member of a board making decisions that affected the budgets of hundreds of thousands of hard-working taxpaying families in our country. Between September 2003 and February 2004, while the claim against Mr Gerard was still in place, the RBA raised interest rates twice. I note that the member for Wentworth is concerned about the sacking of incompetent and ineffective Reserve Bank governors. Well, I did not see the former government jumping to hang their hand-picked member. He was not pushed; he jumped, while the government sat claiming ignorance as their only defence.

It is fortunate that not all members of the board were appointed in such controversial circumstances. The RBA has presided over unprecedented economic growth under the stewardship of Bernie Fraser, Ian Macfarlane and the current governor, Glenn Stevens. Mr Stevens and the other ex-officio members, Deputy Governor Ric Battellino and Secretary to the Treasury Ken Henry AC, are not just well qualified but brilliantly qualified to steer Australia through the current time of global uncertainty. All of those governors—all of those members of the board—have been appointed by two or three different governments. All three of them have exemplary qualifications, including high levels of academic achievement, as well as extensive experience working with and for governments of all political persuasions. It would take me 20 minutes just to list the qualifications of the current RBA board members. This bill puts a structure in place to ensure the independence of the RBA. It ensures high-quality members of the board, and I believe it ensures that the RBA board’s decisions reflect the often complex needs of our economy.

Over the past decade, the former government often unfairly placed the RBA at the focal point of economic policy. This was because of sloppy fiscal policy—out-of-control spending and pork-barrelling. One thing has been made clear on numerous occasions: the pork-barrelling approach to government spending driven by short-term political interests does not create a stable and prosperous nation. The former government’s spending on programs was often determined and prioritised according to the margin in a particular electorate. We cannot afford to have pork-barrelling distorting decisions that should be made in the long-term national interest.

I believe that this bill not only provides greater independence and supports transparency for the Reserve Bank but also signifies the belief held by this government that the donors—sorry, that the doors—of government need to be opened—

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Dutton interjecting

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

You were not here when I referred to donors to the former government.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It was a freudian slip!

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

Robert Gerard made $2 million in donations to the Liberal Party and had a tax liability of hundreds of millions of dollars that he argued about while your government had him appointed to the board. It was simply disgraceful, and you know it.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Keenan interjecting

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The parliamentary secretary should direct his comments through the chair, and the honourable member for Stirling will remain silent—

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

You should go to the New South Wales ALP!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

as will the honourable member for Dickson.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

It is necessary to understand where principle and probity lie. With regard to the appointment and maintenance of Robert Gerard as a member of the Reserve Bank board, he resigned of his own volition. He resigned because, in his view, it had got too hot in the kitchen, not because, in the view of the government, his appointment was inappropriate.

This bill is about openness, it is about integrity, it is about transparency and it is about ensuring that we all have confidence in the RBA. I commend the bill to the chamber.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I think the Reserve Bank Amendment (Enhanced Independence) Bill 2008 is another great example of this government doing what it does best—that is, posing and pretending to care about something and then following up with this sort of nonsense that it can then point to and say, ‘Look, we’ve had a look at this issue and this how we’ve addressed it.’ Unfortunately, what it does when it does that is often, when it comes to address the issue, to do so in a very inadequate and very poor way. It is clear that it does not always understand the consequences of what it is proposing, and I think this bill is an extraordinarily good example of that.

We have in this country, I think, an excellent system of an independent Reserve Bank—a system that was established by the previous coalition government. The Australian public has been very well served by its central bank throughout the whole history of that bank, which has existed since 1911, when the central bank function was within the Commonwealth Bank, and since 1960, when that function was continued within the Reserve Bank of Australia. Australia is held in very high international regard for our well-functioning institutions, our democratic principles and our upholding of the rule of law. I think we disturb all this at our great peril. The Reserve Bank is one of this country’s key economic institutions and, as other speakers have noted, plays a very strategic role in shaping the performance of our economy. It thus plays a very important role in impacting on the wellbeing of all Australians.

We have not heard much about the history of the independence of the Reserve Bank from the government today because their record on supporting the independence of the Reserve Bank is extremely poor. The Reserve Bank was officially made independent by the member for Higgins in 1996, when the new coalition government came to office and he was Treasurer. The then Treasurer jointly released a statement with the Governor of the Reserve Bank that clarified the role of the bank. It was a landmark document and was criticised heavily by the Labor Party at the time. A new and more formal framework for the conduct of monetary policy was agreed to between the government and the Reserve Bank, setting out the inflation objective and enhancing the independence of the bank to make monetary policy settings. Monetary policy would be conducted by the Reserve Bank, with the objective of maintaining the underlying inflation rate of between two and three per cent on average over the course of the cycle. This was substantially less than what the inflation rate had run at through the years of the Hawke and Keating governments.

The independence of the Reserve Bank was further enhanced by the previous government in 2002, when the then Treasurer introduced legislation that gave power to the Treasurer to appoint the Governor and the Deputy Governor of the Reserve Bank. At the time, Labor supported that legislation, which is in marked contrast to their record in this place prior to that. Indeed, I think it is fair for us to ask: where does the Labor Party really stand on the independence of the Reserve Bank?

The legislation that we are debating today reverses the policy that the Labor Party supported in 2002 and was enacted by the then Treasurer. This bill purports to strengthen the independence of the Reserve Bank and enhance the effectiveness of monetary policy. That is what the Treasurer said in this second reading speech. The reality is that you always have to look under what Labor are saying and look at their actions, because their actions very rarely match up to their rhetoric. This bill will create a greater number of uncertainties and problems within the functioning of monetary policy and the Reserve Bank.

We know, from what the Prime Minister and the Treasurer have said on the public record, that they do not really believe that the Reserve Bank is insufficiently independent. On no occasion have they publicly said that our central bank is less independent than any of the other central banks around the world. Indeed, the Prime Minister, as recently as 4 March this year, in answer to a question about what should happen with interest rates, said:

Well you accept an independent Reserve Bank or you don’t.

As I said earlier, Labor heavily criticised the coalition’s reforms in 1996 that acted to enhance the Reserve Bank’s independence. They were so outraged about that legislation at the time that the then opposition leader, Kim Beazley, threatened to sue the Treasurer over this matter. That is how much they believe in the independence of the Reserve Bank.

But they are economic conservatives now because Hawker Britton told them that that is what they would need to pretend to be to win an election, so they say, ‘We now believe in the independence of the Reserve Bank, and we’re going to enhance that independence.’ Sadly, when they came to implement this, they had no idea about what they would do. They came up with this sort of nonsense that will create great uncertainty.

We might recall, if we go back to the years of the Hawke-Keating government—and this is a great example of where Labor has stood on the independence of the Reserve Bank in the past—that the then Treasurer, Paul Keating, used to brag to the Canberra press gallery:

I have Treasury in my pocket, the Reserve Bank in my pocket, wages policy in my pocket, the financial community both here and overseas in my pocket.

Recall also that he made these comments in December of 1990, when the CPI rate in this country was 6.9 per cent and the unemployment rate was 7.7 per cent. That is when the Treasurer was bragging about how he was the one who was in control of monetary policy in Australia. Today we have just another PR exercise from a government that always wants to strike a pose but never really wants to do anything to achieve any actual results.

On 30 October last year, the member for Lilley said:

A Rudd Labor Government will improve the transparency of future Reserve Bank Board appointments and remove political considerations from the selection of candidates. It will also improve procedures to ensure only the best qualified candidates are appointed.

Let us have a look at the track record of the Labor Party in appointing these best quality candidates; let us look at some of the people they have appointed to the board in the past, notable paragons of economic virtue and independent appointment. People such as Bob Hawke and Bill Keelty, that noted independent thinker, were appointed by the Labor Party to the Reserve Bank board. But now the member for Lilley says that Labor would ask the Reserve Bank governor and the Treasury secretary to advise on new procedures to safeguard against candidates with partisan political commitments being short-listed for consideration by the Treasurer. Of course, no-one would have considered Bob Hawke or Bill Keelty to have had partisan political commitments!

There we have Labor’s election commitment on board appointments. There was not a word about any of this, of course, in this bill. Appointments to the Reserve Bank board will follow exactly the same status quo, so maybe we will see future board appointments of such leading lights as Sharan Burrow or Jeff Lawrence. There would be some good condidates in my home state of Western Australia who would make fabulously independent members of the RBA board with no partisan ties; I am sure that Kevin Reynolds or Joe Macdonald will be considered.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Brian Burke.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Brian Burke would be a tremendous appointment—the man who has previously controlled the West Australian Labor Party and continues to pull its strings. I am sure the New South Wales Labor government would be able to come up with some of their mates to appoint to the RBA board. I digress and will now return to the substance of this bill. The bill amends the Reserve Bank Act by conferring the power of appointment of the bank’s governor and deputy governor—not the members of the board—to the Governor-General instead of the Treasurer. This returns to the position that existed prior to 2002. The appointment of the governor and deputy governor of the bank would be the responsibility of the Governor-General. But appointments to the two boards within the Reserve Bank—namely, the Reserve Bank board and the Payments System Board—would still be made by the Treasurer. Further, the bill is completely and utterly silent about the composition of the Reserve Bank board—for example, the desirability of including the Secretary to the Treasury on that board. It does not say anything about that.

It is the process of termination of these appointments that raises the gravest considerations about this ill-considered bill. The process the bill proposes for the termination of appointment of the governor—and this applies equally to the deputy governor—is for the Governor-General to terminate the appointment where both houses of parliament, in the same session of parliament, present an address to the Governor-General praying for the termination of the appointment on a ground specified in subsection (8). I will get to that in just one minute. Alternatively, the Governor-General could suspend the appointment. The relevant minister, assumedly the Treasurer, must then table a statement in each house that identifies the grounds for suspension. Parliament then has 15 sitting days in which to decide whether to terminate the appointment.

Imagine the effect and the chaos that would result during that time. The motion to terminate must be passed by each house in the same session of parliament; otherwise, the suspension will end. Under proposed section 25(8), there are only three grounds for the termination of appointment: permanent incapacity, engaging in outside employment or becoming bankrupt. These are the only three grounds on which the appointment of the governor or the deputy governor can be terminated. Under the existing legislation, the Treasurer must terminate the appointment in the event of permanent incapacity, engaging in outside employment or bankruptcy. You really have to wonder what this bill is seeking to advance. The bill would make this an optional decision of the parliament. At this point, I would like to note that section 24 of the Reserve Bank Act will be amended to provide as follows:

(1)

The Governor and the Deputy Governor:

(a)

are to be appointed by the Governor-General; and

(b)

shall be appointed for such period, not exceeding 7 years, as the Governor-General determines but are eligible for re-appointment; and

(c)

hold office subject to good behaviour.

Parliament appears not to have the power to remove a governor for not being of good behaviour. Subject to what follows later, that power will reside within the Governor-General. I think this prompts a number of questions that really undermine the credibility of this legislation. Could the Governor-General remove the Governor of the Reserve Bank on the ground of failing to be of good behaviour without parliament having to agree to that removal? The legislation is not clear on that. Does proposed section 24(1)(c) give any power to the Governor-General to terminate an appointment given proposed section 25(9) states that an appointment must not be terminated except on a ground identified in subsection (8)—the three grounds that I mentioned earlier? I note that the Bills Digest of the Parliamentary Library has had a look at this issue. This is what it says:

New subsection 25(9) provides that the termination of the Governor or the Deputy Governor can only be terminated on a specified ground and by the means specified by new section 25. This limits termination to the grounds specified and in the manner specified by the section. As noted earlier, the Governor and the Deputy Governor hold office ‘subject to good behaviour’ which is an on-going requirement and a prerequisite for holding office ... Under the changes proposed by the Bill, in the event the position holder is not of good behaviour there is no mechanism for termination as this requirement is not specified as a ground under new subsection 25(8). If a Governor or Deputy Governor did not offer a resignation to the Governor-General under amended section 24B there is no power to remove the Governor or Deputy. This can be contrasted to the present position in that although the grounds of removal from office are the same, there is no strict limitation on the Treasurer’s current power to terminate an appointment as will be the case under the proposed amendments.

This bill is obviously a rush job. It is a rush job for the government to say that they have done something to enhance the independence of the Reserve Bank when, when they said that they were going to do it, they had absolutely no idea what they would actually do to implement that promise. It is a bill that will lead to completely perverse outcomes if the parliament were not disposed to terminating the appointment of a governor who had become bankrupt or incapacitated. Imagine what would happen then if this House were divided on whether a governor or deputy governor should be terminated. Imagine the chaos that would ensue and imagine what that means for Australians who rely on the Reserve Bank to administer sound monetary policy in Australia. This bill does not clearly provide for the termination of the governor who does not continue to be of good behaviour. So, clearly, the opposition cannot support these ill-thought-out amendments.

What we will do is move our own amendment to this bill, and I think it is a very sensible amendment. We will seek to improve the independence of the governor and we will seek to improve the RBA’s accountability to the Australian people through this parliament. Accountability and independence would be achieved by requiring the governor to testify before the Standing Committee on Economics. This is an approach that is taken in similar jurisdictions, such as the United Kingdom and the United States. It is also required by the European parliament. We believe that it is sensible for the bank to appear before the parliament on a more regular basis. Through that, they are more accountable to the Australian people. Currently it happens twice a year; we believe that it is sensible for these hearings to happen four times a year. I think that is a sensible amendment and it is one that has my wholehearted support.

This bill is a clear example of how this government operates. After six months I think we are getting a pretty good view about what is important to this government. What is always important to it are style and spin—it is never the substance. You always need to look at what this government does and not at what it says. The Treasurer and the Prime Minister wanted to appear to be economic conservatives. They do not understand what that term actually means. Their public relations company told them it was one they should use.

So they have tried to come out and pretend they are economic conservatives and now they have had a ‘road to Damascus’ style conversion to believe in the independence of the Reserve Bank, which is something the Labor Party has always opposed and never believed in. They said that they would enhance the independence of the Reserve Bank; they have no idea how to go about doing that so they came up with this ridiculous bill that will cause confusion and has the serious potential to adversely impact on the creation of monetary policy in Australia. It is a bill that cannot be supported by the opposition and I urge all members to take a good look at it and join us in opposing these ill thought out measures.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Reserve Bank Amendment (Enhanced Independence) Bill 2008, which continues a Labor tradition of economic reform that has modernised and strengthened the Australian economy. The Reserve Bank of Australia plays a crucial role in managing the economy through monetary policy. The Reserve Bank board’s obligations with respect to the formulation and implementation of monetary policy are laid out in the Reserve Bank Act.

In this bill we are making some changes to the operations of the Reserve Bank. But broadly speaking it is about managing the economy in the best interests of the Australian community and Australian working families. Over time, policymakers have come to conclude that the best way to achieve the bank’s charter is to target inflation within a given band. This objective was first outlined publicly in 1993 by the then governor, Mr Bernie Fraser, as being a rate of inflation that was held to an average of two to three per cent over a period of years.

This policy, which stands to this day, was developed by the RBA during the Hawke and Keating governments’ years of major economic reform. The reforms included the floating of the Australian dollar, deregulation of the financial system, decentralisation of the industrial relations system, major reductions in tariffs, privatisation of the Commonwealth Bank and other government enterprises, and national competition policy. Many of these reforms caused great divisions and arguments in the community and within political parties. They are, however, the major reasons we have experienced 17 years of sustained economic growth in this country.

It is a fact that the Howard government inherited an economy growing strongly in 1996; an economy built on 13 years of sustained economic reform under the stewardship of first the Hawke government and then the Keating government. Inflation was under control and productivity was on the rise.

The Rudd government continues that proud tradition of economic reform by delivering a responsible budget this week, and we see it also in this legislation, which delivers on an election commitment to increase the independence of the Reserve Bank of Australia and increase the transparency of monetary policy in Australia. The Treasurer worked with the RBA, following the election win by the Rudd government, to finalise a policy and, with the RBA governor, release a new statement on the conduct of monetary policy on 6 December 2007. This legislation enables that statement to be implemented.

It will strengthen the independence of the RBA and establish its governance as world’s best practice. It will raise the position of the governor and the deputy governor to the same level of statutory independence as the Commissioner of Taxation and the Australian Statistician.

The Rudd government is committed to an independent Reserve Bank. As part of this new policy the government is also moving to improve the transparency of future Reserve Bank board appointments and to remove political considerations in these appointments. Accordingly, the Secretary to the Treasury and the Governor of the Reserve Bank will maintain a register of eminent candidates from which the Treasurer will make appointments to the Reserve Bank board.

The statement on the conduct of monetary policy also incorporates transparency measures including the publication of board minutes and a statement of reasons for their decisions following each monthly meeting, irrespective of whether there is an adjustment in the cash rate. Increased transparency helps businesspeople and working families understand the reasons behind monetary policy decisions, which have such a real impact on their lives.

So these measures not only increase the independence of the Reserve Bank but also, through our changes to monetary policy, enable a more transparent and open board. Their deliberations will now be made public so that working families and business can understand better the decisions that they make.

These reforms, which the governor and the government agreed to last year, herald in a new era of independence and transparency in monetary policy in Australia. They will mean the RBA’s governance conforms to world’s best practice. Sadly the opposition’s failure to support this legislation demonstrates that they have lost any appetite they may have had for economic reform. They clearly do not want an independent Reserve Bank and do not understand the importance of its role in keeping inflation within the target band of two to three per cent over the economic cycle. This is demonstrated by the Howard government’s failure to act following more than 20 warnings by the RBA on interest rates.

Unlike the Howard government, which in 1996 inherited a growing economy with inflation under control and productivity on the increase, the Rudd government was left with difficult economic circumstances in which to craft its first budget. Inflation is now at a 16-year high and productivity, which has been in decline for a number of years, is now approaching one per cent after rising to three per cent following the reforms of the Hawke-Keating years. We are facing difficult international conditions, with the subprime mortgage crisis in the United States pushing that economy towards recession. Our terms of trade, built on the back of growing economies in India and China, continue at record levels but these too are putting upward pressure on inflation and interest rates.

It was therefore particularly irresponsible of the Howard government to embark on the spending spree that it did in its last term. I note the previous speaker and other members of the opposition have talked about looking at ‘what we do, not what we say’. Well, the Howard government talked a lot about responsible economic management, but you only have to look at their last term of government and see what they did to understand there was nothing responsible about the reckless spending spree that they went on. And it was a reckless spending spree.

The Howard government embarked on a huge wave of unsustainable spending following the 2004 election. Who can forget then Prime Minister Howard’s $6 billion spending spree in just 10 minutes at the 2004 Liberal Party election campaign launch? Six billion dollars in 10 minutes is very irresponsible. Sadly, families and businesses have had to experience eight interest rate rises in a row since Mr Howard cruelly claimed, during the election campaign, that he would keep interest rates at record lows. Look at what they were doing: they were claiming to be responsible economic managers while at the same time going on a reckless spending spree and loosening fiscal policy while the RBA was trying to tighten monetary policy. And what do we get? Eight interest rate rises in a row—eight interest rate rises in a row since Mr Howard promised to keep interest rates at record lows. No wonder working families were angry at the last election and sent the former government a message.

Economists know that governments, through fiscal policy, can aid the work of the Reserve Bank by reining in government spending to reduce demand and take action to ease capacity constraints on the supply side of the economy. Economic commentators understand that, when the government is going out there and spending recklessly while the Reserve Bank continues to put up interest rates, you are getting the government crowding out the private sector and putting upward pressure on inflation and interest rates, which hurts working families and businesspeople.

The Howard government failed to act on warning after warning by the Reserve Bank to rein in spending or to invest in the supply-side constraints in skills and infrastructure. In stark contrast, look at what the Rudd government is doing. We are committed to tackling the 16-year high in inflation left to the nation by the Howard government and doing all we can to support the Reserve Bank and end this succession of interest rate rises that the economy is currently experiencing.

From day one, we moved to tackle the inflation legacy left to us. Following the new statement on monetary policy, in January the Prime Minister announced a five-point plan to tackle inflation. The first point of the five-point plan is fiscal restraint, requiring spending cuts in the budget. The second is private demand and saving for the future, so we need to also encourage the private sector to save, and we announced and are delivering first home saver accounts as one of those measures. We recognise—and you only have to get out and talk to business to know—that there is a skills crisis in this country, so the third point in our five-point plan is to tackle the chronic skills shortages; and we are delivering on the education revolution that we announced during the election campaign. We know that we need national leadership in tackling infrastructure bottlenecks, which are also providing supply-side constraints on the Australian economy and putting upward pressure on inflation and interest rates.

Finally, as part of our five-point plan, we recognised that we needed to lift workforce participation, and that is what the tax cuts and the childcare rebate are about. They are about giving low-income earners in particular a tax cut to encourage them back into the workforce and changing the taxation system at the bottom end in particular to encourage people back into the workforce. Increasing the childcare rebate from 30 to 50 per cent and paying it quarterly puts some money into working families and ensures that working mothers can participate effectively in the workforce. The government is delivering against this five-point plan; you only have to look at the budget we announced this week.

The budget delivered a $21.7 billion surplus, including $7 billion in savings this coming financial year and $33 billion over the four-year forward estimates. That stands in stark contrast to the budget following the 2004 election, when spending by the former government was way out of control and fiscal policy was not reined in even though interest rates were on the rise and the former Prime Minister claimed he would keep them at record lows. Within this budget, growth in real spending will be at 1.1 per cent in this coming financial year, its lowest rate for nine years, and spending as a proportion of GDP has been cut to levels not seen in 20 years.

We recognise and understand that we cannot leave all the heavy lifting to the Reserve Bank when it comes to tackling inflation. That is why we have cut spending, tightening fiscal policy. Don’t take my word for it, though; here is what independent commentators Goldman Sachs had to say in their review of our budget, published this week:

After 2 years of notable conflict, finally we have fiscal policy that is pushing in the same direction as monetary policy.

So, finally, we have a government that is working, through fiscal policy, with the Reserve Bank’s monetary policy to drive down inflation and start the work to drive down interest rates. Unlike the former government, which received warning after warning from the Reserve Bank but refused to act to rein in government spending, the Rudd government has brought in a responsible budget that will support the efforts of the Reserve Bank to put downward pressure on inflation and interest rates.

We cut spending, while the former government let it grow to unsustainable levels, reaching five per cent in real terms in the financial year that is about to end. The Howard government’s reckless spending fed into consumption, putting upward pressure on inflation and interest rates. As I have said, there have been eight interest rate rises since the former Prime Minister, Mr Howard, promised to keep interest rates at record lows. The former government left all the heavy lifting to the Reserve Bank. It is critical that we maintain an independent Reserve Bank, and this legislation is all about supporting and strengthening that.

The member for Higgins and former Treasurer’s legacy to the Australian business community and working families struggling with mortgage repayments has been inflation at 16-year highs and rising interest rates. Sadly, the current opposition leader and the shadow Treasurer, the member for Wentworth, continue to deny that inflation is a problem, and this is a really sad point. Over the past few months they have made comment after comment denying that there is an inflation problem facing Australia. The opposition Treasurer and member for Wentworth has even suggested that inflation is a fairytale while he and the opposition leader have argued against spending cuts in the budget. So we see a continuation of the failed approach of the Howard government to rein in spending while we are seeing inflation on the increase and interest rates continuing to rise. How can the opposition leader or the shadow Treasurer claim to be credible on economic management while they continue to deny there is an inflation problem in Australia?

The facts are that inflation has risen to 4.2 per cent over the past year, well outside the Reserve Bank target of two to three per cent, yet the shadow Treasurer has continued to argue that inflation is not a problem in Australia. He continues to deny that the Howard government legacy to working families is 16-year-high inflation and rising interest rates. Sadly, the Howard government squandered years of strong economic growth, a result of a once-in-a-generation resources boom and the reforms of the Hawke-Keating years. They failed to invest in nation-building infrastructure and skills that would have eased capacity constraints within the Australia economy and eased inflationary pressures. Instead they were fiscally irresponsible, wasting billions on government advertising, consultants and pork-barrelling. Sadly, it is working families and small business that have been left to pay through rising inflation and interest rates. The Rudd government is determined to tackle inflation and invest in infrastructure and skills that drive productivity and put downward pressure on inflation.

I have already outlined some of the savings measures in the budget to reduce demand, but we are also working on the supply side to ease capacity constraints in the economy. Investments in trades training centres and new training places deliver on our election commitments, while the new $11 billion Education Investment Fund will ensure we have the resources to continue to invest in vocational education and universities into the future.

Similarly, the $20 billion Building Australia Fund sets aside moneys to tackle the infrastructure bottlenecks that have built up across the nation following years of neglect by the former government. Infrastructure Australia, established under the Rudd government, will ensure that this investment is particularly planned and coordinated. The exciting thing about this budget is that it not only tackles inflation that is currently gripping the economy but also sets itself for the long term by putting in place an education fund, an infrastructure fund and a health fund to ensure that we can make the serious investments that we need into the future to tackle these supply side constraints and make sure that the economy continues to prosper into the future and delivers for the community, for business and for working families.

The government’s budget has been framed in difficult economic times and is firmly focused on steering the nation through this period of high inflation and low productivity left to us by the Howard government. We recognise and understand that tackling inflation is the key to lowering interest rates. We agree with the Reserve Bank governor when it comes to the seriousness of the threat of inflation to the Australian economy. Listen to what the Reserve Bank governor had to say at the economics committee hearing on the 4 April when asked by the chair—and I see him in the House today—about ignoring inflation. The chair asked:

What would be the impact on the economy if we just ignored inflation? Would this lead to higher or lower interest rates in your view?

The governor replied:

That is a good question. I think it is quite clear from any study of history, either ours or any other country, that if you do not control inflation then ultimately you end up with higher interest rates.

So while we see the opposition talking about there being no inflation problem in this country, I do not know whether they are reading the Reserve Bank statements, but if they are hearing the Reserve Bank governor there is clearly an inflation problem. The Reserve Bank governor clearly stated in our last hearing that if we do not tackle inflation we are going to see a continuation of rising interest rates. If we do not tackle it over the longer term, we will end up with interest rates stuck at high levels. That is what the RBA governor said very clearly at our last hearing. If we do not control inflation, we ultimately end up with higher interest rates. It cannot be put any simpler than by the Reserve Bank, yet the opposition continues to deny that inflation is a problem in the Australian economy. They cling to the myth that John Winston Howard was some kind of economic conservative. You only have to look at what he did and what the current opposition is doing. History shows him to be no economic reformer or fiscal conservative but a Prime Minister focused solely on short-term political expediency.

The Rudd government is again embarking on a period of economic reform to tackle the inflation problem gripping Australia, and making the nation-building investments that will drive productivity and secure our long-term economic prosperity. We are determined to do what is right in the longer term interest of the nation. We are doing our bit by tightening fiscal policy and taking pressure off the Reserve Bank. That is why in these difficult economic times we have delivered a budget that gets the balance right on the demand side by reining in government spending while investing in supply side capacity constraints in infrastructure and skills.

Maintaining the independence of the Reserve Bank, that manages monetary policy, is also a critical part of this effort. When you have an opposition that does not understand and agree with the Reserve Bank, we can see why we need to strengthen its independence, why we need to ensure that the RBA can do the important work that they do in monetary policy. The stance of the current opposition, who are taking a completely different position from the Reserve Bank governor on interest rates, highlights again the need for strengthening this independence, and I cannot make that point any more strongly.

The Rudd Government recognises this and that is why we are committed to tackling inflation in the Australian economy in the short term and putting downward pressure on interest rates and the cost of living. We will also not shirk our responsibilities to longer term reform of the Australia economy and this bill is another example of our commitment to that reform. I strongly urge the House to support the bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I take this opportunity to welcome the delegates from the Centre for Democratic Institutions who are in the gallery today and wish them well with their Political Party Development Course. I call the member for Aston.

Chris Pearce (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise today to comment on the Reserve Bank Amendment (Enhanced Independence) Bill 2008, but before I begin my remarks on the bill I have to say something about the speech we have just listened to from the member for Leichhardt. He talked about the Labor Party now being economic conservatives—they have joined us as economic conservatives—and he talked about how the Labor Party wanted to enhance the independence of the Reserve Bank. He was not here when the coalition attempted to enhance the independence of the Reserve Bank and the then leader of the Labor Party, Kim Beazley, threatened to sue us, to take legal action, because of what we wanted to do. The member for Leichhardt also talked about the hearing of the House of Representatives Standing Committee on Economics in Sydney on 4 April, giving many quotes from the Reserve Bank governor, and he said in his speech that the previous government had ignored warning after warning from the governor. But what he failed to tell the parliament today is that at that committee hearing on 4 April I asked the Reserve Bank governor directly whether he had issued any warnings to the previous government. The governor said that he had not issued any warnings to the previous government, yet we have the member for Leichhardt saying that there was warning after warning. Other questions I asked of the Reserve Bank governor were: ‘Do you think inflation is out of control? Do you think the inflation genie is out of the bottle?’ Of course, that is what we have been hearing from the good old-fashioned rooster, Mr Swan, who is now the Treasurer. And what the Reserve Bank governor said at that hearing on 4 April was that inflation was not out of control. So it is always interesting how new members in particular like to just quote aspects that suit their pitch of the day.

This bill adds nothing positive to the functioning or the performance of the Reserve Bank or its officers. The bill purports to provide the same dismissal mechanisms as for the Commissioner of Taxation and the Australian Statistician. But in making this attempt, the bill fails to achieve its desired goal, that being to implement a clear and consistent procedure for the removal of the governor or the deputy governor. It also fails to provide the people of Australia with the certainty they currently enjoy under section 25 of the Reserve Bank Act. This is an important section because it provides for clear mandated action by the Treasurer for the removal of the governor or the deputy governor in three particular events. They are: if either officer becomes permanently incapable of performing their duties or if they engage in paid employment outside the office of the Reserve Bank or if they become bankrupt. The circumstances are clearly spelt out and the action to be taken is mandated. There is no need for debate in this place or the other place and no need to form consensus on the course of action to pursue because there is no choice by the incumbent Treasurer on how to act—it is mandated. This provides both the Reserve Bank officer and the Australian people with confidence and clarity in the dismissal mechanism.

As a former parliamentary secretary to the Treasurer, I know that Australia’s Reserve Bank is one of the finest institutions of its kind in existence. One of the reasons for the bank’s high esteem within Australia and globally is the transparent, objectively verifiable conditions under which it functions in our marketplace. This bill seeks to do damage to that transparent process, in my view, by adding the requirement for a parliamentary debate and, indeed, a vote to achieve what is currently required by law.

Under this proposal there must be a meeting of both houses of parliament, both must agree the governor or deputy governor should be dismissed, based on one of the three conditions I outlined earlier, and then request that the Governor-General dismiss the governor or the deputy governor. What would previously have been an automatic and somewhat efficient action mandated by the current legislation would be turned into a time-consuming and faintly ridiculous bureaucratic nightmare. In the unfortunate circumstances that a governor or deputy governor fell into any one of the three categories, we would have to proceed with this meandering journey through both houses of parliament to achieve what is currently a brisk and very effective method.

The unfortunate, and possibly unintended, consequence of this bill would be that the three circumstances I have outlined would be the only circumstances under which the governor or the deputy governor could be removed from office. Let us consider that matter for a second. Currently, the governor and the deputy governor hold office ‘subject of good behaviour’. But according to the Bills Digest, that requirement—that the governor or the deputy governor continue their respective ‘good behaviour’—is lost as a means of dismissal, if either the governor or the deputy governor breaches that requirement of so-called ‘good behaviour’. So if either party were to behave in a mendacious manner, that would no longer be grounds for a sacking—regardless of what this parliament believed was in the best interests of this nation. I think this is the thin end of the wedge. If it can be possible for a governor or a deputy governor of the Reserve Bank to be lying or deceptive or otherwise injurious in conduct and yet still remain in the role, the loss of confidence in the market could be absolutely devastating. The parliament would be divested of the opportunity to consider proved misbehaviour or mental incapacity as grounds for termination from the role.

This is a shoddy bill that the Treasurer has rushed into the chamber. It beggars belief. You have to ask yourself: what could be the motivation for such a bill? Of course, the motivation is, pure and simple, political ‘spin’. This bill reverses the law that was supported by Labor. The bill is nothing more than a crass example of political expediency so that the Treasurer and the Prime Minister can mistakenly claim to be economic conservatives.

The shadow Treasurer has foreshadowed an amendment which I support. It is all about increasing the number of occasions that the Reserve Bank governor appears before the Standing Committee on Economics, from twice a year to four times a year. This is an excellent amendment. These appearances could take place after the publication of each of the quarterly statements. This is in the interests of the Australian people and of the Australian market. Mr Speaker, I am heartened, as no doubt you are, that with Labor now being the self-professed home of economic conservatives we will see eye to eye in this place on matters of economic conservativism such as this. That being the case, I am confident that the remarks of the opposition today, together with this amendment, will be supported by the Australian Labor Party, as they should be. The amendment that is proposed will provide for greater transparency and greater accountability and bring the Reserve Bank governor before the parliament of Australia not on two occasions a year but on four occasions. That can only be a positive thing for the Australian people and the Australian markets. The Australian Labor Party should not oppose the Reserve Bank governor talking with the parliament of Australia on an increased number of occasions. I support the amendment, but I do not support the bill as proposed by the government.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for Aston will have leave to continue speaking, if he wishes, when the debate is resumed.