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Australian Reserve Bank may face banknote inquiry over alleged corruption

A POWERFUL parliamentary committee will consider holding hearings into alleged corruption by a Reserve Bank of Australia subsidiary.

Labor MP Sharon Grierson, chairwoman of the Joint Committee of Public Accounts and Audit, told The Age her committee would meet next week to discuss an inquiry into alleged overseas bribery by Securency International, a polymer banknote supplier half-owned and supervised by the RBA.

''When there are allegations of corruption in the management of government contracts it would be a matter for the committee to discuss,'' she said.

Ms Grierson said any inquiry would examine Securency's management of contracts and the RBA's administration of its activities.

She would also raise the matter with the Commonwealth Auditor-General.

The joint committee of public accounts and audit is one of the Parliament's oldest and most powerful committees. Its role is to hold Commonwealth agencies to account for the way they use public money.

Ms Grierson's comments follow those of Labor backbencher Kelvin Thomson, who yesterday broke the federal government's year-long silence on Securency, suggesting a public inquiry may be necessary and comparing the situation to the Austra- lian Wheat Board scandal.

Greens leader Bob Brown has pledged to again move for a Senate inquiry. Independent senator Nick Xenophon also supports a public inquiry with the power to examine the roles played by the RBA, Australian Federal Police and Austrade.

Mr Rudd yesterday refused to answer questions from The Age on Securency, with his office referring them to Treasurer Wayne Swan.

Mr Swan also refused to answer the questions, with his spokesman saying: ''As this matter is under investigation from the Australian Federal Police, it would not be appropriate for the Treasurer to comment.''

Mr Rudd and other senior Labor MPs regularly made corruption accusations against the former Howard government during the Cole royal commission on the AWB board scandal in 2006.

Meanwhile, Indonesia's central bank and Corruption Eradication Commission have announced investigations into whether bank officials took huge bribes from the RBA companies, as reported by The Age this week.

The AFP has been investigating Securency for a year for alleged bribery of foreign officials.