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Monday, 18 March 2013
Page: 2304


Mr CIOBO (Moncrieff) (12:00): by leave—On behalf of the coalition I am pleased to rise to speak to the review of the Reserve Bank of Australia annual report 2012. Like the chair of the committee, coalition members are exceedingly grateful to the committee secretariat for their support but, most importantly, to the governor of the Reserve Bank and his senior executives for making themselves available twice annually to appear before the House of Representatives Standing Committee on Economics.

This committee represents in many respects the interface between the parliament and, through the parliament, the Australian people when it comes to monetary policy. There is no doubt considerable concern—not only in Australia, but we of course are most focused on Australia—about what is happening with respect to monetary policy and, generally, the fiscal and monetary outlook globally. The committee had the opportunity to touch upon a number of these aspects in the testimony provided by the Reserve Bank governor. In particular, questions were put to the governor about a range of matters. For coalition members, our concern about the acute levels of debt and deficit that the federal Labor government has accrued in a short period of time remains central to our questioning. We remain concerned about whether or not fiscal policy is sustainable. We remain concerned about the context in which that is happening and, therefore, the forecasts and projections put forward by the Reserve Bank with respect to the global economy.

Of particular concern to me is forecasts, and this formed part of my questioning to the Reserve Bank governor, because we have seen such significant swings in forecasting. For example, we had this year the Treasurer of Australia, the member for Lilley, indicate that he would deliver a $1.2 billion budget surplus, which we now understand is on track to be yet another $15 billion or $16 billion deficit. In addition to that, last year the Treasurer announced that there would be a $22 billion deficit, which ended up in fact being a $44 billion deficit—a 100 per cent blow-out in the size of the debt that the Labor government accrued. Our concern as members of the coalition was the extent to which these projections on the fiscal policy impacted on the development of monetary policy. We know that the federal government is crowding out the private sector when it is borrowing over $110 million every single day to feed its reckless spending.

I would highlight that the member for Higgins made some very important inroads with respect to the Reserve Bank's reserve fund and questioned the appropriateness of the Treasurer calling in a $500 million dividend from the Reserve Bank at a time when the Reserve Bank governor indicated that it was his preference to retain these funds within the Reserve Bank to make sure it had an adequate arsenal for any future challenges it would face. One concern that was very deftly put forward by the member for Higgins was the impact of the Treasurer reaching into the Reserve Bank's pocket and ripping out $500 million that this government clearly needs to help backstop its largesse when it comes to the amount of money it is spending.

So, these were two particular points that the coalition members questioned the Reserve Bank governor on. We are grateful that he once again proved himself to be a man of deft talent when it came to answering or not answering questions. That notwithstanding, we are always exceptionally grateful for his support of the role and the accountability of the Reserve Bank back to the parliament, and in that respect I certainly commend the report.