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Monday, 23 June 2008
Page: 3016

Senator BUSHBY (4:11 PM) —Prior to the intervention of question time, I was speaking about how the Reserve Bank Amendment (Enhanced Independence) Bill 2008 will produce the result of two dismissal procedures with absurd results, the first being as to parliament, for the factual determination of incapacity, paid employment or bankruptcy, and the second as to the Governor-General, for the more controversial determination of misbehaviour. I was also comparing this with the Reserve Bank Act as it currently stands, which reads that a Treasurer must terminate the appointment of a governor or a deputy governor on three factual grounds. The bill takes this and makes it an optional decision for the parliament. As I mentioned prior to the intervention of question time, this means that the parliament might decide to let a bankrupt governor continue in office or it might decide to let a governor who was permanently incapacitated continue in office or it might even decide to let a governor who was working on the side continue in office. This could very well be the result of the present bill, a bill that has been rushed forward without due consideration and is designed to meet a political need, a bill that could produce a number of perverse outcomes, such as allowing a bankrupt to continue in office as governor of the Reserve Bank, and a bill that would leave unclear the method of dismissing a misbehaving governor.

Australians deserve better from their government. This bill is a symbolic sham. Accordingly, I indicate that I will be supporting the amendments to the bill to be moved by Senator Coonan. One of the results of these opposition amendments would be to require that the governor testify before the particular House of Representatives committee four times a year. This is an important reform. Transparency, accountability and independence are closely allied. At present the governor meets informally with the parliamentary committee twice a year, but he could choose not to. The coalition’s amendments would mandate the governor’s appearance four times a year, for the Reserve Bank is accountable to parliament and, through it, to the people of Australia for the administration of its monetary policy role. This frequency would be closer to world practice. For example, the Chairman of the US Federal Reserve testified to Congress seven times last year. The Governor of the Bank of England typically testifies before parliament three or four times a year, and the President of the European Central Bank appears five times a year before the European Parliament. So the coalition’s amendments are an important advance in the accountability and independence of the Reserve Bank. The amendments would reverse the very perverse outcomes that could possibly arise out of the bill in terms of the potential need to terminate the appointment of a member of the Reserve Bank board and would work to add to the already substantial independence of the board. The bill as it stands serves only to highlight a government in disarray, a government that is prepared to rush ill thought out legislation into parliament and to stand by it despite its obvious deficiencies, all to avoid exposing the fact that the whole thing is a public relations stunt.