Media Releases

Media release: 28 November 2000

Reserve Bank Questioned in Regional Australia

This Friday, the House of Representatives Economics Committee will question the Reserve Bank of Australia over its performance throughout the past six months and in particular the House Economics Committee will examine the regional impact of monetary policy changes. This is the first time a Reserve Bank hearing has been held in a regional centre.

Public Event: Reserve Bank of Australia Public Hearing
Where: Wagga Wagga Council Chambers, Wagga Civic Centre, Morrow St
When: Friday 1 December, 11am-2.30pm
Witnesses: Mr Ian Macfarlane, Governor
Dr John Laker, Assistant Governor (Financial System)
Mr Glenn Stevens, Assistant Governor (Economic)

"There is a strong sense in regional areas that the Reserve Bank is too capital city-centric, and that regional economies are not sufficiently considered when the RBA sets monetary policy," David Hawker MP, Chair of the House Economics Committee, said.

"Regional areas often have different needs to the capital cities. Growth in agriculture is lower than in most other industries, and there are also environmental factors such as the current floods that need to be considered. It is also important for the Reserve Bank to emphasise the opportunities presented to regional Australia by changes in monetary policy, such as the competitive advantage the low Australian dollar offers agricultural exporters."

In addition to regional monetary policy issues, the House Economics Committee will question the Reserve Bank on:

• the impact of global growth on the Australian economy;
• the current state of the Australian dollar and the Reserve Bank's intervention in the foreign exchange market;
• the future direction of interest rates;
• the impacts of the recently introduced tax reform package;
• the impact of higher global oil prices on the Australian economy;
• the Reserve Banks forecasts for growth, including its projections on the levels of household debt and wealth;
• the findings of the recent RBA/ACCC report on debit and credit card interchange fees and access.

The basis for the House Economic Committee's discussion with the Reserve Bank will be the RBA's November 2000 Statement on Monetary Policy and the 1999-00 annual reports of the RBA and the Payments System Board.

Many of the general economic issues that will be raised by the House Economic Committee at this Friday's Reserve Bank hearing in Wagga were recently discussed by Mr Hawker and leading British financial representatives. This month Mr Hawker had the opportunity to review the impact of regional economies within a global setting during a parliamentary study tour to the United Kingdom. Mr Hawker met with the Governor of the Bank of England, the Chief Executive Office of the United Kingdom Financial Services Authority and the senior manager of Enterprise Ireland. The aim of the study tour was to gain insights into the relationships of the British Parliaments with the Bank of England and the impacts of the European Community on the UK economy.

"The study tour to Britain was timely as there are many parallels with the UK system and how the House Economics Committee monitors the Reserve Bank of Australia," Mr Hawker explained. "The Bank of England is accountable to the British Parliament. Yet, due to the creation of the European Union, the Bank has had to manage monetary policy within a diverse regional setting in the United Kingdom, as well as its impact within the European Community.

"From a regional perspective, Enterprise Ireland has played an integral role in transforming the Irish economy, particularly in generating new business and jobs within the region. There are a number of concepts developed by Enterprise Ireland that we could consider and transfer to our own regional centres."

For all media inquiries contact David Hawker MP, Committee Chairman, on (02) 6277 4837 (Parliament House).

For Media enquiries contact Sally Webster, House of Representatives Media Adviser, on 02 6277 2063 or 0401 143 724.

For background information contact Kevin Bodel, Senior Research Officer, on (02) 6277 4587, 0413 021 420 or visit http://www.aph.gov.au/house/committee/efpa/rba9900/rbaindex.htm

The December RBA hearing will be audio webcast on the Parliament's Internet site: http://webcast.aph.gov.au/livewebcast3.asp and broadcast live in Canberra on the Parliament House Monitoring System.

Note: Media access to the public hearing room will be available from 9.30am.

Copy of the Reserve Bank's November 2000 Statement on Monetary Policy: http://www.rba.gov.au/bulletin/bu_nov00/bu_1100_1.pdf

Committee Membership 39th Parliament

Chairman: Mr David Hawker MP
Deputy Chair: Ms A Burke MP
Members:
Mr Anthony Albanese MP
Ms Teresa Gambaro MP
Mrs Kay Hull MP
Mr Mark Latham MP
Ms Tanya Plibersek MP
Mr Christopher Pyne MP
Hon Alex Somlyay MP
Dr Andrew Southcott MP

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