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

Media release: 24 November 1999

RESERVE BANK TO ACCOUNT FOR ITS POLICIES

This month's interest rate increase will feature at an important public hearing next week.

On Monday 29 November 1999, the House Economics Committee will again hold the Reserve Bank of Australia (RBA) to account for its handling of monetary policy, at a public hearing in Sydney.

The Committee Chairman, Mr David Hawker MP, said that: "At the hearing the Committee will again question the Governor about the current economic situation in Australia and the operations of the Bank".

The Governor's biannual appearance before the Committee provides an important avenue for the Bank to demonstrate its accountability to the community for the way in which it conducts its operations, especially in relation to monetary policy. This is a valuable opportunity for the Governor to be publicly questioned on these issues. The process is strongly supported by both the Parliament and the Bank.

Mr Hawker said that the main issues which are likely to be canvassed at the forthcoming hearing include:

• the RBA's recent announcement of an interest rate increase of 0.25% and the implications of that decision for people such as home owners
• the related question of increased inflation - has the Bank read the trends correctly?
• a discussion of the RBA's new research paper on business bank fees, prepared at the request of the Committee
• whether all bank customers are subsidising credit cards whether they benefit or not
• final preparations by financial institutions for Y2K and their plans to educate staff and customers on the issues
• the twin problems of low household savings and a high level of household debt compared to disposable income
• whether monetary policy is a suitable instrument for attempts to reduce unemployment
• current expectations on the impact of tax reform and the effect of the newly announced levy to cover the cost of East Timor.

Mr Hawker said that the papers forming the basis for discussion at this hearing, would be the RBA Annual Report for 1998/99, the Bank's November 1999 Semi-Annual Statement on Monetary Policy and the first Annual Report of the RBA's Payments System Board.

The Committee will table its report on this inquiry in the early part of next year.

Members of the public are welcome to attend the hearing, which will be held in the Jubilee Room at Parliament House, Sydney from 10am to 2pm on 29 November. Alternatively, the transcript from the hearing will be available on Wednesday after the hearing on the Committee's web site at: www.aph.gov.au/house/committee/efpa.

Mr Hawker said that: "Given the strength of the Australian economy, the emergence of inflation as a possible problem and the Bank's recent announcement of an interest rate increase, the hearing will be very timely and important".

Ends
24 November 1999

Further information:
David Hawker MP (Chairman) 02 6277 4100
Beverley Forbes (Secretary) 02 6277 4582
Email: EFPA.Reps@aph.gov.au

Public Hearing Program: Reserve Bank of Australia

Date: Monday 29 November 1999
Time: 10:00am to 2:00pm
Location: Jubilee Room, Parliament House, Sydney

Witnesses:
Mr Ian Macfarlane, Governor
Dr John F. Laker, Assistant Governor
Mr Glenn Stevens, Assistant Governor

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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