Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023

Summing Up Speech

Firstly, I would like to thank all the members who have contributed to this debate about a key economic institution.

And for the opportunity to sum up the debate for the Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023.

This Bill will strengthen the Reserve Bank’s independence, clarify its mandate, and modernise its structures.

It will deliver the biggest set of reforms undertaken at the Reserve Bank in over three decades.

And it will implement the Government’s response to the independent Review of the Reserve Bank of Australia.

That review received input from current and former RBA board members and staff and others, it considered international best practice, and it canvassed views from across the community.

I would like to thank the Review Panel, some wonderful people – Professor Carolyn Wilkins, Professor Renée Fry‑McKibbin, and Dr Gordon de Brouwer PSM – for their work and the more than 1,500 stakeholders who contributed to the Review process.

I released the Review and its recommendations almost eighteen months ago.

And I welcome the discussion and debate that has occurred since then.

We have already made progress on implementation.

I would like to acknowledge the efforts of the Reserve Bank, led by Governor Bullock, in following through on many of the recommendations that go to its internal operations.

As part of our response, I agreed an updated Statement on Conduct of Monetary Policy with the RBA Board, which was released in December last year, and I thank the Board members for their engagement.

This legislation is the next step in implementing the Review.

The RBA Governor has said she is 100 per cent behind the changes and has publicly called for them to be legislated. That means the Opponents of this legislation are at odds with the Reserve Bank Governor.

Speaker,

Our response to this extensive piece of work is in keeping with its recommendations.

To strengthen the RBA's independence.

To clarify its role.

And to modernise its structure.

The Bill amends the Reserve Bank Act 1959 and the Banking Act 1959 to:

• Reinforce the Reserve Bank’s independence in the operation of monetary policy.
• Renew the Bank’s statutory objectives.
• Improve accountability and transparency in the Bank’s monetary policy decision making.
• Enhance the Bank’s governance arrangements to bring them into line with best practice.
• And clarify the RBA’s responsibility to contribute to financial system stability.

We welcome the discussion and debate that has occurred in the House and in the broader community since my second reading speech in November last year.

Many MPs have highlighted, as I do, the critical role the Reserve Bank has played in our economic success for well over six decades.

They’ve recognised how important it is that we equip the bank to continue serving all Australians in an increasingly complex and challenging economic environment.

And they’ve accepted the Review and the Government’s response to it, as the best way forward.

And as a reminder of my bona fides, at every stage I’ve tried to reach bipartisan consensus in the hope this Bill is widely supported in the House because we believe the independent Reserve Bank should be above and beyond partisan politics.

The Coalition and the Member for Hume have raised six issues with the Bill over the past year and we have responded in good faith.

Whenever there’s been a line ball call, whenever there’s been a view put to me by the Opposition, we’ve accommodated that view.

They wanted the Chair of the Governance Board to be the Governor, and we facilitated that.

They wanted flexibility in term limits, and we’ve facilitated that as well.

They wanted senior RBA executives to have oversight of the operation of the Bank. The Bill makes the Deputy Governor a member of the governance board.

They wanted to ensure that the dual mandate should exclude references to equal weight, and so the legislation and the Statement of Conduct on Monetary Policy I agreed with the RBA Board late last year don’t mention equal weight for the dual mandate.

They asked that Section 11 be retained. We proposed an amendment that would have retained section 11 but focus it more appropriately.

They asked that all current members of the RBA Board should move to the monetary policy board, and we proposed an amendment that would transfer all current board members to the monetary policy board unless that was not their preference.

But instead of being able to garner enough support for these changes – that responded to his concerns and suggestions –

the Member for Hume was rolled once again.

I dealt with him in good faith.

I engaged extensively with him, including having three meetings with him and organising multiple briefings for him with my Department.

For the best part of two years, I put a premium on bipartisanship – but there’s only so much you can do when you are dealing with someone who doesn’t have the necessary authority with his own colleagues.

The Coalition have had every opportunity to support this important economic reform and it is more than disappointing that at the last moment they have not.

Speaker,

Our preference has always been and continues to be for bipartisanship between the two major governing parties.

That’s because I think that these changes should endure beyond any future changes of government.

And we will continue to do our best to ensure a bipartisan outcome.

I was planning to move our amendments in the House today as they directly address concerns raised by the Coalition.

But unfortunately in light of their position that they announced yesterday, we will not be moving the amendments in the House today.

Instead, we are considering our options and considering next steps.

We are still willing to work across the Parliament to help these important reforms get through.

We anticipate that we will have to move amendments in the Senate to secure further support.

It is not our preference to accommodate the Greens but the Coalition may force our hand.

The Government is committed to strengthening the independent Reserve Bank in an increasingly complex and changing world.

Our reforms are timely, measured, and they should be enduring.

Because to support sustainable growth in our economy, and to support a better future we need an RBA that is transparent, strong and independent.

An RBA that draws on more expertise to make its important decisions.

An RBA that is at the forefront of international best practice.

An RBA that remains world class.

That’s what these reforms are all about.

And that’s why I commend the Bill to the House.