House of Representatives Committees

Standing Committee on Economics, Finance and Public Administration

Review of the Reserve Bank of Australia annual report 1997-98

Media release: 9 December 1998

RESERVE GOVERNOR TO FRONT PARLIAMENTARY COMMITTEE NEXT WEEK

The new House of Representatives Committee on Economics, Finance and Public Administration met for the first time today electing Mr David Hawker MP (member for Wannon, Vic) as its Chairman and Mr Greg Wilton MP (member for Isaacs, Vic) as Deputy Chairman. Details of the other members of the Committee are attached.

Mr Hawker said 'The Committee is off to a flying start again and will hold its first hearing with the Governor of the Reserve Bank, Ian MacFarlane, at Parliament House in Canberra next Tuesday 15 December 1998 to report on the conduct of monetary policy.'

'With the economic situation considerably better than the Governor had previously expected, and last weeks' small interest rate cut, there are many up to the minute matters to discuss with the Governor ' Mr Hawker said.

'Unlike previous hearings when the Bank released it semi-annual statement on monetary policy at the public hearing, the Committee has had the opportunity to consider the November statement in more detail since it was released three weeks ago.'

Mr Hawker said 'Some other matters which the Committee will be particularly pursuing with the Governor and his associates will be:

the global financial crisis and the potential effect on Australia's balance of payments;
the Bank's defence of the Australian dollar;
recent strong statements made by the Governor on hedge funds and bank mergers;
interest rate spreads and bank margins;
implications of the Australian Bureau of Statistics changes to the method for measuring the CPI;
effectiveness of the new division of financial responsibilities between the RBA and the financial regulatory agencies;
the blowout in estimates to $1 billion for the banking sector to deal with the Year 2000 problem; and
the breaking of the RBA's monopoly on Government banking.'

'Given that prudential issues are no longer a major responsibility of the Reserve Bank, the Committee also plans to hold regular hearings with the Australian Prudential Regulatory Authority to maintain close public scrutiny of those matters.'

At its first meeting the Committee also considered other elements of its new work program. Mr Hawker said 'He has now written to the Treasurer seeking the re-referral of the previous committee's incomplete inquiry into alternative means of providing banking and like services in regional and remote Australia. A considerable amount of work has been done on this inquiry and the Committee now expects to table its report in early 1999.'

'The Committee noted that the Australian Competition and Consumer Commission had tabled its annual report in Parliament this week' Mr Hawker said. 'We will also continue to hold hearings with the ACCC and the other major competition watchdog - the National Competition Council, as the Committee remains concerned about the effects of national competition policy on the community, particularly its impact in regional Australia. Other details of the Committee's work program will be announced in the new year.'

Mr Hawker concluded 'Like its predecessor, the Economics Committee's success requires the support and input from the public, financial sector, government agencies, industry associations and academics etc. An immediate priority for the new Committee in early 1999 will be a program of meetings and briefings with major organisations involved in, and affected by, financial issues.'

Ends
9 December 1998
Further information:
David Hawker MP (Chairman) 02 6277 4100
Christopher Paterson (Secretary) 02 6277 4587
Details of hearing and Committee membership follow

Committee Membership 39th Parliament

Chairman: Mr David Hawker MP
Deputy Chairman: Mr Gregory Wilton MP
Members:
Mr Anthony Albanese MP
Ms Anna Burke MP
Ms Teresa Gambaro MP
Mrs Kay Hull MP
Mr Mark Latham MP
Mr Christopher Pyne MP
Hon Alex Somlyay MP
Dr Andrew Southcott MP

Public Hearing Program: Reserve Bank of Australia

Date: Tuesday 15 December 1998
Time: 10.30am to 2.00pm
Location:
House of Representatives Committee Room 2R1
Parliament House
CANBERRA

Witnesses:
Mr Ian Macfarlane, Governor
Dr Stephen Grenville, Deputy Governor
Mr Glenn Stevens, Assistant Governor

Note: Media access to the public hearing room will be available from 9.00am.

Email: EFPA.Reps@aph.gov.au