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 has been
Our terms of trade remain at an all high 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 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 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
While there are concerns about the
broader global economic outlook, it is undeniable that 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.
Julie Owens MP
Terms of reference
The House of Representatives Standing Committee on Economics
is empowered to inquire into, and report on the annual reports of government
departments and authorities tabled in the House that stand referred to the
committee for any inquiry the committee may wish to make. The reports stand
referred in accordance with the schedule tabled by the Speaker to record the
areas of responsibility of the committee.