Review of the Reserve Bank of Australia annual report 1998-99

Media release: 16 May 2000

RESERVE TO FACE INTEREST RATE PROBE

Next Monday, the House Economics Committee will again question the Governor of the Reserve Bank of Australia (RBA) over his handling of monetary policy. The hearing will be in Melbourne at the Dallas Brooks Centre at 10.00am.

Committee Chairman, David Hawker MP, said 'The past two years, with low interest rates, an expansionary monetary policy and the Australian economy doing so well in the face of the Asian crisis, the Governor has rightly received much praise for his policy decisions. With interest rates now rising and the Bank judging that '...the fairly expansionary policy is no longer warranted...' there is pressure from the community and government for more detail from the central bank.'

The role of the House Economics Committee in this process is crucial, as it is the major public arena in which the Governor is called upon to explain his policies.

To this end, Mr Hawker said 'the main issues likely to be canvassed at the hearing include:

• more detail on the reasons for the Bank's recent increases in interest rates;
• inflation risks and inflation expectations;
• the Bank's intervention in the foreign exchange market;
• impact of the Federal Budget on monetary policy;
• influences from the US;
• levels of household debt and wealth;
• current expectations on the impact of tax reform;
• the Bank's transparency of its decisions;
• updates on the Reserve Bank's investigation on bank fees and charges and its response to the recent CANNEX report showing rising bank fees; and
• progress made by the Payment Systems Board in its study on credit card loyalty schemes and interchange fees, particularly given the recent criticism of the UK banks' credit cards business by the Cruikshank report'.

The basis for the Committee's discussion with the Bank will be the RBA's May 2000 semi-annual statement on monetary policy.

At this hearing the Committee has invited some local university and senior secondary economics students and staff, to attend the hearing. The committee is pleased with the response to this opportunity for students to see the Parliament at work.

For the first time there will be a live audio broadcast of the hearing on the Parliament House Monitoring System in Canberra and an audio webcast on the Parliament's Internet site: http://webcast.aph.gov.au/livewebcast3.asp

Members of the public are welcome to attend the hearing or to tune in to the audio Internet webcast.

Ends
16 May 2000

Further information:
David Hawker MP (Chairman) (03) 5572 1100 (Electorate)
Tas Luttrell (Principal Research Officer) 02 6277 4587
Email: EFPA.Reps@aph.gov.au
For Media enquiries:
Sally Webster (Media Adviser) (02) 6277 2063 Mobile: 0401 143 724
Email: Sally.Webster.Reps@aph.gov.au

Other information on committee's inquiry: http://www.aph.gov.au/house/committee/efpa/rba9899/rbaindex.htm

Copy of the Reserve Bank's May 2000 semi-annual statement on monetary policy: http://www.rba.gov.au/PublicationsAndResearch/Bulletin/bu_may00/bu_0500_1.pdf

Public Hearing Program

Date: Monday 22 May 2000
Time: 10:00am to 2:00pm
Location: Gardenview/Parkview Rooms
Dallas Brooks Convention and Function Centre
300 Albert Street, East Melbourne

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

Note: Media access to the public hearing room will be available from 8:30am

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

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