Chapter 1 Introduction
The House of Representatives Standing Committee on Economics
(the committee) is responsible for scrutinising the Reserve Bank of Australia (RBA) and for ensuring its transparency and accountability to the Parliament, the community,
and the financial sector.
The appearance by the Governor of the RBA at biannual public hearings of the committee is an important element of the RBA’s accountability
framework. The details of this framework are set out in the Statement on the
Conduct of Monetary Policy, agreed between the Treasurer, the Hon Wayne
Swan, MP, and the RBA Governor, Mr Glenn Stevens. The statement formalises the biannu al appearance before the committee. The statement, which is reproduced at
Appendix B, states:
The Governor has also indicated that he plans to continue the
practice of making himself available to report on the conduct of monetary
policy twice a year to the House of Representatives Standing Committee on
The Treasurer expresses support for the continuation of these
arrangements, through which the transparency and accountability of the Reserve
Bank's conduct of monetary policy are in line with international best practice.
These arrangements enhance the public's confidence in the independence and integrity
of the monetary policy process.
A second procedural mechanism for achieving this accountability is set
out in the Standing Orders of the House of Representatives, which provide for
the referral of annual reports within a committee’s area of portfolio
responsibility for any inquiry the committee may wish to make. Accordingly, the
committee may inquire into aspects of the annual report of the RBA.
Scope and conduct of the review
The fourth public hearing of the committee with the RBA during the 43rd Parliament was held in Sydney on 24 February 2012.
The audio proceedings of the hearing were webcast over the internet,
through the Parliament’s website, allowing interested parties to listen to the
proceedings as they occurred. The transcript of the hearing is available on the
Before the hearing, the committee received a private briefing from
Ms Su‑Lin Ong, Managing Director, Head of AU/NZ Economics &
Fixed Income Strategy, RBC Capital Markets. This briefing provided valuable background information for the committee and perspectives on issues for discussion at
the public hearing. The committee appreciates Ms Ong’s cooperation and
Public hearings with the RBA continue to bring issues of monetary policy
into the public arena, and have assisted in providing a public face to
parliamentary committees and the RBA. The committee welcomes the Governor’s
frank and open comments at the hearings. In addition, the hearings are an
important means whereby financial markets can be better informed on the current
thinking of the RBA.
The report focuses on matters raised at the public hearing, and also draws on issues raised in the RBA’s Statement on Monetary Policy. The Statement
on Monetary Policy may be viewed through the RBA’s website.
Next public hearing with the Reserve Bank of Australia
The committee will conduct the next public hearing with the RBA on 24 August
2012 in Canberra. More details will be circulated in the weeks leading up to