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Monday, 21 November 2011
Page: 12875

Ms OWENS (Parramatta) (10:42): On behalf of the Standing Committee on Economics, I present the committee's report entitled Review of the Reserve Bank of Australia annual report 2010 (third report), together with the minutes of proceedings. Australia continues to experience favourable conditions for future growth, economic stability and monetary policy. As the committee has heard from the Reserve Bank, Australia enjoys extraordinarily good economic conditions across a range of key areas.

The Australian economy demonstrated resilience through its swift recovery from the effects of various natural disasters early in the year, such as Cyclone Yasi and the Queensland floods. Though production recovered more slowly than first expected, the Reserve Bank's expectations about the limited and temporary effects of the disasters on domestic prices have been vindicated. Our terms of trade remain at an all-time high and unemployment remains low by historical standards. Inflation remains within the parameters of the long-established policy of inflation targeting and looks set to remain under control for the foreseeable future. In contrast to many leading economies, our banking sector is sound and does not pose the concerns about liquidity, solvency and the reliability of the credit system that plague some international markets. The soundness and strength of our national situation is evident from the international recognition it receives. Our sovereign credit position is in the topmost tier of the international market. However, the retail sector is under pressure, in part because of increased caution by Australian consumers. This caution underpins the financial resilience of household balance sheets and marks a return to higher rates of savings.

While there are concerns about the broader global economic outlook, the Australian economy is in a strong condition to meet the challenges ahead. 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 26 August 2011. The next public hearing will be held on 24 February 2012 in Sydney. I commend the report to the House.

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