Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong. I refer to revelations on ABC TV's 7.30 last night and in Fairfax newspapers today regarding the Reserve Bank of Australia's knowledge of serious allegations of corruption and malfeasance in its subsidiaries well before such allegations became public in 2009. Documents revealed that, among other things, in 2007 Assistant Governor Frank Campbell was aware that Securency International had hidden a $492,000 payment to a corrupt Malaysian arms dealer. They also showed that the arms dealer's company wrote to Mr Campbell demanding further payments and stating that it had convinced the Malaysian Prime Minister and cabinet to hand out contracts. Can the minister advise what course of action the government will be taking to investigate these serious claims?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank Senator Xenophon for the question and making sure I did not have a question time without a question at all today. I am aware of the reports on the ABC's 7.30 Report last night. As the senator would know, there are a number of these matters which are currently before the courts, so obviously in this answer and I assume also in response to subsequent questions in the supplementary, I am obviously going to be reasonably constrained, because I am not going to be canvassing matters which are currently before the courts.

I would make a couple of points, though. It is obviously in the community's interest to ensure that public institutions meet the highest standards. That is the view of the government and that is clearly also the view of the Governor of the Reserve Bank if you look to his public statements. The Reserve Bank has responded to the matters raised, I am advised, on the 7.30 Report. I am advised that they have reaffirmed that it has cooperated fully with the legal authorities and that the bank's executives acted in good faith and with integrity. I understand the RBA stated last night, as follows:

The Reserve Bank is committed to transparency on these matters with the community and the Parliament through the House of Representatives Economics Committee. In his Statement to the Committee on 24 August,—

and the senator would be aware of this—

the Governor said that the Bank was taking steps to seek the permission of the Court to allow the Bank to table a broad range of relevant documents. This work is progressing. It is important that the legal process is respected and that the release of any documents is done in a way that does not jeopardise the right of the accused to a fair trial.

The Bank has sought to deal appropriately with all the issues that have arisen. It has cooperated fully with the legal authorities, notifying them of the existence of relevant documents— (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I am happy for the minister to elaborate on the earlier answer, but does the minister concede that these fresh internal documents appear, on the face of it, to contradict the parliamentary committee testimony given by the Governor of the Reserve Bank, and does the government express full confidence in the way that the Reserve Bank has dealt with these serious allegations over the years?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

In relation to the last issue, the Treasurer has been asked that question and he has made very clear that the government does have faith in the Governor of the Reserve Bank. He is a first-class public servant and he has made a comprehensive statement about all these matters. The RBA is a very important independent institution in Australia, in terms, obviously, of macroeconomic policy and also as a very important institution more generally.

If I could just return to the quote that I was reading. It ended:

The Bank has sought to deal appropriately with all the issues that have arisen. It has cooperated fully with the legal authorities, notifying them of the existence of relevant documents and providing documents when requested.

I am also advised with regard to the first part of your question that the RBA stands by previous statements made to the House committee in respect of both NPA and Securency.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I am grateful to the minister. Can the minister advise whether the government has sought to ask the Australian Federal Police to investigate whether the RBA failed to alert police in a timely manner to critical documents, including the Hood report and the Freehills report?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

First, as the senator would know, the AFP is an independent body and is not directed by the government in matters such as the one he has referred to. I would also make this point: the RBA has taken steps over the past few years to tighten controls and strengthen governance to avoid any recurrence of alleged behaviour. The bank has publicly announced, for example, that the use of sales agents has ceased and procedures at both companies have been overhauled. I am also advised that the RBA is fully cooperating with the Commonwealth Director of Public Prosecutions as part of these proceedings.

The Treasurer has previously said—and I would endorse his comments—that obviously these are serious matters which do deserve to be thoroughly investigated. That is what the Reserve Bank has been doing, and the accountability mechanism through the committee is entirely the appropriate course of action.