Ms GAMBARO (12:41 PM) —I too am delighted to have the opportunity to speak on the House of Representatives Standing Committee on Economics, Finance and Public Administration report on the Reserve Bank. I would also like to congratulate Russell Chafer and the committee on their fine work. I was absolutely delighted that on this occasion the committee came to my home city of Brisbane. One of the good things about these hearings has been that the Reserve Bank governor has now visited a number of areas around Australia. The hearings in Brisbane were very well attended by a large number of members of the community, as well as schoolchildren. Many members of the community who came along commented to me that it was a wonderful opportunity and it was not every day that one could go to a hearing and hear the Governor of the Reserve Bank of Australia speak about his economic forecasts and a variety of topics.

At those hearings I was very pleased to see that a number of issues were raised, including the economic forecasts. The world has seen terribly uncertain times in terms of SARS outbreaks and economic weaknesses in the first half of the year. In the June quarter most countries saw a decline in their GDP. That caused many central banks, including those in the USA, Canada and Europe, to reduce interest rates. The governor was very optimistic, however, about our domestic situation, and our forecasts for GDP are predicted to be higher in the second half of the year. When he spoke to us at a public hearing in Melbourne in 2003 he forecast that GDP would grow by three per cent in real terms. However, GDP in this country is now expected to grow by four per cent over the course of 2004. It is growing much more strongly than the Reserve Bank had anticipated.

Overall, inflation targeting and monetary policy were areas that were raised by the Reserve Bank governor. He was very happy to keep his objective of two to three per cent inflation in the consumer price index and to ensure that it was maintained within those manageable levels. A number of topics came up. From the viewpoint of many of my constituents who came along, interest rates clearly were an area of interest, particularly in the housing market. In the state of Queensland we have probably had one of the largest increases in housing prices. Where other states have tended to even out over long periods of time and have had gradual increases, we have had increases of between 30 and 40 per cent over the past year. This has particularly been the case in South-East Queensland, where we have had a large economic boom and a large number of people have moved up from southern states. It is an area that is causing quite a bit of contention.

The real estate industry itself and some of the practices that are occurring in that industry are currently under investigation by the ACCC. The member for Chisholm mentioned investors and property speculators such as Henry Kaye. I think that greater controls do need to be put on people like Henry Kaye, and the ACCC has clearly taken a very strong stance against the Henry Kayes of this world.

With regard to monetary policy, I want to quote the Reserve Bank governor. He said that the Reserve Bank had increased interest rates—and there were two interest rate rises that occurred over this period, taking the rate to 5.25 per cent. On the subject of why he had done that, he said that the Australian economy had been `growing better than comparative countries around the world' and that that was something to be very pleased about. He continued:

That really says it all. We are in good shape, even though there a few problem areas such as household credit. Credit debts have risen over a period of time, but our economy is going along very nicely. Our GDP is growing at a healthy rate and the Reserve Bank governor certainly did not indicate to the committee or the hearing that he was alarmed about any aspect of that. He indicated that we were tracking well. As I said earlier, I was particularly pleased that the hearing was held in Brisbane. I look forward to the next hearing, which will be held in Sydney, and I thank the secretariat once again. (Time expired)