Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

) ( ): My question is to the Minister representing the Treasurer, Senator Wong. Why did the Treasurer think ripping a $500 million dividend from the Reserve Bank to improve the look of the government's budget bottom line was more important than the Reserve Bank governor's formal advice to the government and his express wish to direct all of the bank's earnings to replenish the Reserve Bank Reserve Fund and the bank's balance sheet?

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

I thank the senator for the question. I have been looking forward to a question—it has taken until Wednesday. I realise it is because Senator Cormann is at home!

John Hogg (President) Share this | Link to this | Hansard source

Can we keep other people out of this? Please just addressed the question.

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

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The approach that the government takes will always ensure that the Reserve Bank is in a position to continue to play its vital role in supporting the Australian economy. I trust that, despite some of the strange economics on the other side of the chamber, at least on the issue of the institution of the Reserve Bank there could be a modicum of appropriate consideration by the opposition.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I ask a supplementary question. In evidence to the House economics committee last Friday, Governor Stevens said:

My preference was—and this was expressed, that—I would like to retain the whole 1,096…to build up the Reserve Bank Reserve Fund. But he did not agree with that…

Why should the Australian people put greater faith in the judgement of a Treasurer who never has and never will deliver a budget surplus rather than the independent governor of the Reserve Bank of Australia?

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

If the opposition care so much about what the independent governor of the Reserve Bank says, why do they continue to promulgate economically incoherent positions? Perhaps if they think Mr Stevens—

Opposition Senators:

Opposition senators interjecting—

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

I was asked about the position of the governor of the Reserve Bank and I am happy to respond, Senator Abetz. If those opposite have such respect for Governor Stevens, as we on this side do, maybe they could have a look at what he says about the Australian economy, maybe they could have a look at what he says about the Australian labour market, maybe they could have a look at what he says about the relative position of the Australian economy vis-a-vis other economies around the globe and maybe they could tell Mr Truss that we are not like Greece.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I rise on a point of order on relevance. The question is very specifically about why the formal advice to government of the governor of the Reserve Bank was rejected. His advice was that all earnings of the bank be put into the reserve fund. That was the question.

John Hogg (President) Share this | Link to this | Hansard source

I draw the minister's attention to the question.

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

I refer to my first answer. The decision was taken after consultation with the board. The Treasurer made the decision after consultation, and this government will always ensure that the RBA is in a position to continue its vital role. I again point out to the other side that they are very happy to listen to Mr Stevens but only on some matters. (Time expired)

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I ask a further supplementary question. In the foreword to the Reserve Bank's 2011 annual report, Governor Stevens wrote:

…the prudent course will be to apply future earnings to rebuilding the RBRF before the resumption of dividend payments.

As the government failed to take what the governor described as 'the prudent course', which antonym of prudent best describes the Treasurer's decision? Was it rash, foolhardy, irresponsible, unwise or just plain reckless?

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

I think that was, dare I say it, a somewhat political question. Surprise, surprise for question time! I again make a couple of points. The first is: if those opposite want to be taken seriously on prudent economic decisions then perhaps they should tell the person who wants to be deputy prime minister—apart from Senator Joyce—that likening Australia's economic position to that of Greece is not a prudent economic decision. Perhaps they should also tell Mr Hockey that using an accounting firm that was found to have acted unprofessionally is not a prudent economic decision, and perhaps they should remind themselves that using a catering company to do their costings is also not a prudent economic decision.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I rise on a point of order on relevance. My question was seeking the minister's guidance as to how she would describe the decision of the Treasurer? Given, by the governor's own definition, what the Treasurer did was not prudent, how would the minister described the Treasurer's decision?

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order.

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

I think in that point of order, Senator Fifield probably misquoted the Reserve Bank governor. He ought to be very careful about what he says in that regard. The point I would make is that the government always makes decisions that it believes are in the best interests of the Australian economy. (Time expired)

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Mr President, I seek leave to table the governor's foreword from the Reserve Bank of Australia's 2011 annual report, which does put in context the governor's use of the word 'prudent'.

John Hogg (President) Share this | Link to this | Hansard source

Is leave granted?

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

Let's have a look at it.

John Hogg (President) Share this | Link to this | Hansard source

Leave will be granted, I have been told, subject to the usual courtesy of the document that is being tabled being shown—

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I know it is embarrassing, but—

John Hogg (President) Share this | Link to this | Hansard source

That is not the issue. I cannot make judgements on that. I am just saying that that is what has been said.