Kevin Rudd (Griffith, Australian Labor Party, Shadow Minister for Foreign Affairs and Trade and International Security) Share this | Link to this | Hansard source

My question is to the Prime Minister. It refers to the Treasurer’s last answer on the question of the independence of the Reserve Bank. Is the Prime Minister aware of the following comments made by former Reserve Bank Governor Ian Macfarlane on the independence of the RBA, who said:

... if you wind the clock back not that far, for example to the Fraser government, under the Fraser government, all the decisions on monetary policy were made by the monetary policy cabinet.       

…            …            …

With the governor sitting outside, most of the time, to hear the news. So the change from that state of affairs to the state of affairs under Paul Keating as treasurer and Bernie as governor, was a very big move in the direction of independence, compared to what had proceeded it.

Prime Minister, is it not a fact that you were the Treasurer of Australia at that time, when the Reserve Bank had no independence whatsoever, and you presided over interest rates of 22 per cent?

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! Before I call the Prime Minister, I remind the Leader of the Opposition that he should direct his questions through the chair and not use the word ‘you’.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

It is true that under the Fraser government the Reserve Bank did not have the independence it has now. That is right, and I think that was a bad policy. That is why when the present government came to power we changed it. But the Leader of the Opposition has forgotten about the Treasurer and later Prime Minister who was interspersed between the Fraser government and the Howard government, and that was a bloke called Paul John Keating. When he was asked about the independence of the Reserve Bank he said: ‘Oh, don’t worry. I’ve got the Reserve Bank in my pocket.’

Opposition Members:

Opposition members interjecting—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! Members are holding up their own question time.