Australia continues to enjoy near-ideal conditions by every
relevant measure of international comparison. Despite the disturbing
persistence of uncertainty throughout much of the global economy, especially
the Eurozone, the fundamentals of the Australian economy remain strong. Our
public debt and unemployment rate are low by international standards. Our
underlying inflation is at the midpoint of the inflation target range. We
remain an attractive location for a wide range of both foreign and domestic
investors. We are well-placed to benefit still further from the current
historic surge in business investment, particularly in the resources sector.
This surge assures Australians of still more growth in output and national wealth.
As this report demonstrates, the RBA’s central expectation
for the next two years is for growth to closely follow the trend and for
inflation to be close to the target. This is no mere extension of previous
growth, but evidence of a fundamental realignment within the national economy.
As the bank has testified, the drivers of growth in our economy have changed
quite recently. The long-term, structural, effects of the export oriented
resources boom are now working their way through the nation, across region
after region. The resulting investment boom continues to grow in strength. This
is expected to last for the foreseeable future, though it has already taken the
share of business investment in GDP to its highest level in at least 50 years.
It is now clear that household behaviour has changed, with
Australian households taking advantage of the current condition to save more
and spend less than they have done in the recent past. This will provide
Australian families with an enhanced degree of financial resilience.
At the last hearing in February the committee expressed its
very best wishes to Mr Ric Battellino on the occasion of his retirement as
Deputy Governor and our congratulations to Dr Philip Lowe on his new position
as Deputy Governor. I would like to reiterate those sentiments here.
Finally, 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
24 February 2012. The committee will conduct the next public hearing with the
RBA on 24 August 2012 in Canberra. Further details will be circulated in the
weeks prior to the hearing.
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.