Background
1.1
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.
1.2
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 Seventh Statement on the Conduct of Monetary Policy, agreed between the Treasurer, the Hon Scott Morrison, MP, and the RBA Governor, Dr Philip Lowe. The statement formalises the biannual appearance before the committee. The statement, which is reproduced at Appendix B, states:
…the Governor will continue to be available to report twice a year to the House of Representatives Standing Committee on Economics, and to other Parliamentary committees as appropriate.
The Treasurer expresses support for the continuation of these arrangements, which reflect international best practice and enhance the public’s confidence in the independence and integrity of the monetary policy process.
1.3
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 reports of the RBA.
Scope and conduct of the review
1.4
The first public hearing of the committee with the RBA during the 45th Parliament was held in Sydney on 22 September 2016.
1.5
The 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 committee’s website.
1.6
Before the hearing, the committee received a private briefing from Mr Adam Boyton, Chief Economist, Deutsche Bank Australia.
1.7
This briefing provided valuable background information for the committee and perspectives on issues for discussion at the public hearing. The committee appreciates Mr Boyton’s cooperation and assistance.
1.8
The committee also appreciates the provision of additional briefing material from the Parliamentary Library Research Service.
1.9
The hearing was well attended by members of the public and was broadcast live through the Parliament’s website.
1.10
The 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. These hearings are also an important means whereby financial markets can be better informed on the current thinking of the RBA.
1.11
This report focuses on matters raised at the public hearing, and also draws on issues raised in the RBA’s August 2016 Statement on Monetary Policy. The Statement on Monetary Policy may be viewed through the RBA’s website.