Ed Husic (Chifley, Australian Labor Party) Share this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's report entitled Review of the Reserve Bank of Australia annual report 2024, together with the minutes of the proceedings.

The Standing Committee on Economics' biannual hearings with the Reserve Bank of Australia have been an important mechanism to provide parliamentary scrutiny of the functions and decisions of Australia's central bank for nearly 30 years.

The hearings offer an opportunity for the parliament, and for Australians more broadly, to better understand the conduct of monetary policy and the Reserve Bank's assessment of current economic conditions and the outlook ahead.

Importantly, the committee had a chance to explore the progress implementing the most significant reforms to the RBA in more than three decades—more about that later.

Today, I'd like to focus on monetary policy over the period covered by the report.

At the time of the hearing on 22 September 2025, inflation had fallen from its 2022 peak of 7.8 per cent and sat between two and three per cent, while unemployment remained low at 4.2 per cent. Additionally, the RBA had eased monetary policy over the course of the year, reducing the cash rate by 75 basis points to 3.6 per cent. The unemployment rate of 4.2 per cent was low by historical standards, and 1.1 million more Australians were in employment than in mid-2022. Gross domestic product per capita had superseded pre-COVID levels.

Beyond monetary policy, the committee examined a wide range of issues relating to Australia's current economic position. For instance, the Reserve Bank reiterated to the committee that Australia is not immune from the global trend of subdued productivity growth.

A range of factors influencing changes to the productivity rate were discussed, including COVID, growth in non-market sectors, business dynamism and productivity in the mining sector. The committee heard that opportunities for productivity growth in Australia exist in areas such as renewables and artificial intelligence.

Global developments were also covered. The committee was told by the governor we had witnessed a marked step-change in the world trading system, but explained that, as also emphasised in the August statement on monetary policy, the predicted impact of trade instability on the global economy had not materialised fully.

However, these dynamics warrant vigilance given potential spillovers to Australian demand, inflation and financial conditions, and the RBA continues to monitor risks to Australian economic growth.

The governor also provided an overview of inflation overseas, commenting that some countries, such as the United Kingdom, continue to face price pressures while other countries such as Canada were observing low inflation but with rising unemployment rates.

It was also the RBA's first appearance since the amended Reserve Bank Act 1959 came into force on 1 March 2025, creating a new monetary policy board and a separate governance board in line with the recommendations of the government's review of the RBA.

The reforms undertaken to the RBA have strengthened transparency, enhanced the quality of public communication and improved the governance structure of the institution. The establishment of separate boards has enabled a clearer focus on monetary policy and institutional oversight.

The RBA spoke to its commitment to strengthening its modelling, scenario analysis and forecasting capabilities, designed to support more robust policy formulation and ensure the bank remains responsive to emerging developments.

Other significant themes canvassed through the hearing included the RBA's work to improve the efficiency and competitiveness of the payment system through its review of retail payments regulation. Given the wide interest in this space, the committee will examine related matters in its inquiry into schemes, digital wallets and innovation in the payments sector, with public hearings set for 24 and 25 February.

Reflecting a widespread contemporary focus on the growing impact of artificial intelligence, the committee discussed potential benefits and effects on businesses and on the economy more broadly.

The committee also explored how technological innovation continues to transform the landscape within which the RBA performs its functions, from how the bank operates to its approach to research. These issues will continue to shape the RBA's work and the committee's future oversight.

The House Standing Committee on Economics continues to monitor the conduct of monetary policy, given its impact on members of the community and the important role that the RBA and its monetary policy conduct plays in broader economic management.

Finally, I thank the secretariat for their diligent preparation and ongoing support to committee members through this review, and I extend my thanks to the entire committee membership. All their work is deeply appreciated.

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