Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's report, incorporating dissenting reports, entitled Review of theReserve Bank of Australia Annual Report 2011, together with the minutes of proceedings.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—Australia's national economy continues to achieve sustainable growth with low inflation and low unemployment. This is despite global economic uncertainty, particularly in the eurozone. The RBA noted that the economic and financial problems in the euro area remain the most significant downside risk to the forecasts for global economic growth.

The fundamentals of the Australian economy remain strong. Public debt is low and underlying inflation is at the midpoint of the inflation target range. While resource investment is expected to decline gradually, the RBA noted that the effect of this on GDP growth is expected to be roughly offset by faster growth in resource exports and, in time, a gradual recovery in non-resource investment.

The outlook for Australia remains substantially the same as it has throughout the current calendar year. Real GDP growth is expected to slow over the second half of 2012, as growth in domestic demand in the first half of the year moderates. A surge in growth in the first half of 2012 has lifted the forecasted GDP growth over 2012 to 3½ per cent. This is expected to moderate a little in 2012, and the economy is expected to grow at around three per cent over 2013 and 2014.

Since the committee's previous public hearing in February 2012, global conditions have varied, with a general tendency towards weaker growth. The problems of the European economy remain unresolved, so growth throughout the eurozone has been constrained, while the economy of the United States has grown at a modest pace. Growth in China also eased to a more sustainable rate.

In relation to Note Printing Australia and Securency International the committee has at six consecutive public hearings examined the RBA about the bank's knowledge of and response to allegations of corrupt activity. On 8 October 2012 the committee's examination of these matters continued for almost seven hours. It is expected that once the criminal proceedings are finalised the RBA will be able to release relevant documents which are currently subject to court orders. This will then provide further opportunity for scrutiny by this committee.

Finally, on behalf of the committee I would like to thank the Governor of the Reserve Bank, Mr Glenn Stevens, and other representatives of the RBA for appearing at the hearings on 24 August 2012 and 8 October 2012.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

by leave—I am pleased to rise to associate myself with the remarks made by the Chair of the Standing Committee on Economics with respect to the most recent inquiry that the committee undertook, on monetary policy settings, with the Governor of the Reserve Bank and others. Can I say at the outset how much committee members appreciate the support of the secretariat of the Economics Committee. They have, on numerous instances now, proven to be of great value and assistance to the committee and I am very grateful to them for that.

Specifically with regard to monetary policy settings, it is clear to coalition members of the committee that we continue to be well served by the Reserve Bank, although the same cannot be said with respect to the fiscal policy settings of the current government. That notwithstanding, it does provide an important opportunity for coalition members to investigate and scrutinise decisions taken when it comes to monetary policy settings. Certainly, the level of angst in the community over monetary policy settings and, in particular, the desire for there to be a decrease or a loosening of monetary policy are ever pervasive, especially in light of the fact that Australia seems to be, in terms of economic growth, trending downward at a time when many Australians are feeling sharply increasing cost-of-living pressures.

Of course, one of the major areas of focus that is also touched upon in this report had to do with the Reserve Bank subsidiaries Note Printing Australia and Securency. I am very mindful that my good friend the member for Casey has made supplementary comments to the report of the committee, and those supplementary comments outline in great detail the chronology with respect to both events that took place within Securency and with Note Printing Australia, especially in regard to the use of agents, and decisions that were taken by RBA management—and, in particular, former deputy governor Mr Ric Battellino—with respect to Securency and Note Printing Australia.

The committee report as a whole reflects the views of coalition members. As I said, there are supplementary comments which I would like to acknowledge as well.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned, and the resumption of the debate made an order of the day for the next sitting.