Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

in reply—I would like to thank all members who have taken part in the debate on the Reserve Bank Amendment (Enhanced Independence) Bill 2008. The measures contained in this bill implement the government’s election commitment to enhance the independence and transparency of the conduct of monetary policy by the Reserve Bank. Under this legislation the positions of governor and deputy governor will have their level of statutory independence raised to that of the Commissioner of Taxation and the Australian Statistician. As such, their appointments will be made by the Governor-General acting in council. At the moment they are simply appointed by the Treasurer. In addition—and more importantly—the termination of the governor and the deputy governor may now only occur if each house of the parliament in the same session of the parliament requests the Governor-General to do so. Presently the Treasurer is able to carry out the termination of either of these positions without reference to the parliament. The present situation could leave the governor and deputy governor in a potentially vulnerable position. Put simply, this bill vests with the Governor-General the existing powers to appoint and terminate the governor and deputy governor that currently rests with the Treasurer.

It has been suggested during the debate that under this bill the governor and deputy governor would no longer hold office subject to good behaviour, through the operation of paragraph 24(1)(c). This is not the view of the Office of the Australian Government Solicitor. Paragraph 24(1)(c) has always pertained to the removal of the governor and deputy governor from office by a court should they no longer be of good behaviour. This bill in no way changes the clause or its intended effect.

There has also been an amendment put forward to require the governor to appear before the House of Representatives Economics Committee four times a year. The governor and his predecessor have regularly appeared before the committee, and at only his last appearance Governor Stevens indicated, ‘It is really in the hands of the committee how often you want me to come.’ This amendment is unnecessary and, I think, an unfortunate effort to score a political point right when the very intent of this bill is to put the positions of governor and deputy governor above partisan politics.

The increased independence of the RBA delivered by this bill is an important component of the government’s strategy to tackle the inflation challenge and to help reduce the financial pressures on working families. From day one the government has taken responsibility for tackling the inflation challenge. This bill supports the efforts I outlined in the budget to meet the inflation challenge head on. In doing so, the government will continue to honour its commitment to help reduce financial pressure on working families, who have made the Australian economy strong. I commend this bill to the House.

Question agreed to.

Bill read a second time.

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