CHANGES the Rudd Government says will make the Reserve Bank of Australia more open and accountable have passed the House of Representatives.
The changes take the power to appoint and dismiss the central bank`s two top executives from the treasurer.
The bank`s governor and deputy governor will be appointed by the governor-general in council, meaning the Federal Government.
They can be suspended or dismissed only with the approval of both houses of parliament.
Treasurer Wayne Swan said the two executives would have the same statutory independence as the taxation commissioner and the Australian statistician.
The changes honoured an election commitment to enhance the bank`s transparency and independence, he said.
The bank chiefs were in potentially vulnerable positions when they could be sacked by a treasurer without reference to parliament.
Opposition treasury spokesman Malcolm Turnbull said it was an ill-considered move that did nothing for the central bank`s independence.
The "absurd" situation could arise where a governor who`d been declared bankrupt or had taken outside work with a commercial bank couldn`t be sacked until both houses of parliament had voted.
There was also considerable doubt over whether the new laws enabled a governor to be sacked for misbehaviour, he said.
Mr Turnbull moved a series of amendments, including requiring the governor to double his appearances before the house`s economics committee from two to four times a year.
Mr Swan said the amendments were "shallow grandstanding".
The Government used its numbers to defeat the amendments and pass the Reserve Bank Amendment (Enhanced Independence) Bill, which now goes to the Senate.
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