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 entitled Review of the Reserve Bank of Australia Annual Report 2011 (First Report), together with the minutes of proceedings.

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

by leave—Australia continues to enjoy near ideal conditions by every relevant measure of international comparison. Despite the disturbing persistence of uncertainty throughout much of the global economy, especially the eurozone, the fundamentals of the Australian economy remain strong.

Our public debt and unemployment rate are low by international standards. Our underlying inflation is at the midpoint of the inflation target range. We remain an attractive location for a wide range of both foreign and domestic investors. We are well placed to benefit still further from the current historic surge in business investment, particularly in the resources sector. This surge assures Australians of more growth in output and national wealth.

As this report demonstrates, the RBA's central expectation for the next two years is for growth to closely follow the trend and for inflation to be close to the target. But there is evidence of a fundamental realignment within the national economy.

As the bank has testified, the drivers of growth in our economy have changed quite recently. The long-term, structural effects of the export oriented resources boom are now working their way through the nation, across region after region. The resulting investment boom continues to grow in strength. This is expected to last for the foreseeable future, although it has already taken the share of business investment in GDP to its highest level in at least 50 years.

It is now clear that the household behaviour has changed, with Australian households taking advantage of the current conditions to save more and spend less than they have done in the recent past. This will provide Australian families with an enhanced degree of financial resilience.

On behalf of the committee, I would like to express our best wishes to Mr Ric Battellino on the occasion of his retirement as deputy governor and our congratulations to Dr Philip Lowe on his appointment as deputy governor.

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 hearing on 24 February 2012. The committee will conduct the next public hearing with the RBA on 24 August 2012 in Canberra. Further details will be circulated in the weeks prior to the hearing.

I commend the report to the House.

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

by leave—Mr Acting Deputy Speaker Leigh, how apt that you should be in the chair. I rise to second, in many respects, the comments that were made by the chair of the House of Representatives Standing Committee on Economics. Of course, the committee did undertake its most recent review of the annual report of the Reserve Bank, and it was interesting to hear the Reserve Bank governor's testimony in a range of areas.

Unlike the Labor Party, members of the coalition take the view that Australia's good fortune is not a consequence of brilliant economic stewardship by the Labor Party nor a consequence of the fiscal policy settings that the Labor Party has put in place. Rather, it was—in the view of the coalition members, and we sought to verify views on this with respect to economic stewardship—a legacy issue of the former coalition government. That is not to say it has all been bad, but the evidence, very clearly, from the Reserve Bank is that much of Australia's ongoing economic success, much of the resilience of the Australian economy, much of the strength of the Australian economy, flows from the fact of our geographic location more than it does from any brilliance by the current Treasurer.

In that respect, the testimony from the Reserve Bank governor was clear: Australia will continue to have economic challenges in the future as we undertake a very significant period of structural reform across the Australian economy. An inflated Australian dollar, in comparison to the situation historically, will continue for some time. We will continue to see pressures being placed on banks with respect to their funding costs and, in addition, there will need to be continual revisions of interest rates and the official cash rate by the Reserve Bank with respect to trying to get the balance right for Australia going forward and balancing the issue of inflation with, of course, economic growth.

Taking all those matters into account, there was also some questioning by the member for Casey of the Reserve Bank on a couple of outstanding issues with respect to Securency, and it was good to clarify those matters as other members of the committee have previously.

All in all, the committee members from the coalition side were grateful to the Reserve Bank governor for his continued cooperation with the House of Representatives Standing Committee on Economics. We were grateful, too, to the committee secretariat for all of their assistance and hard work. And like the chairman of the committee, we are certainly pleased to congratulate Dr Philip Lowe on his ascension to the position of deputy governor and to thank Mr Ric Battellino for his contribution over a number of years as he steps down and retires as deputy governor.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I call the member for Parramatta to move that the House take note of the report.

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

I move:

That the House take note of the report.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

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