Reserve Bank of Australia Annual Report – 1990 Note Printing Australia

At the beginning of 1989, the Bank, with the assistance of private consultants, undertook a wide-ranging review of its Note Printing Branch (NPB) at Craigieburn, Victoria.

Capacity utilisation at NPB had fallen in recent years, partly reflecting improvements in production technology and partly the replacement of the $1 and $2 notes with coins. At the same time, staffing levels had fallen only slightly and the unit cost of printing Australian currency notes had risen to a level well above international benchmarks.

In addition, there appeared to be a potential for increased production in Australia of currency notes for overseas countries or for the export of the fruits of technology developed in Australia.

Following the review the Bank undertook a three-phased program:

  1. To restructure the branch virtually as a stand-alone business unit with clear objectives and performance criteria and with management answerable to a separate Board;
  2. To reorganise the operations of the branch so as to increase efficiency and productivity; to reduce the costs of producing Australian bank notes;
  3. To develop markets in Australia and overseas for currency notes and security products incorporating technology developed at Craigieburn.

Detail of the program was developed in full consultation with the staff at Craigieburn and the unions representing them.

On 6 February 1990, the Bank announced the establishment of Note Printing Australia (NPA) as a separate Division of the Bank, with its own Board. Members are the Deputy Governor, Mr M.J. Phillips (Chairman), Mr J.N. Davenport and Mr F.M. Bethwaite. Mr Davenport is a member of the Board of the Bank; Mr Bethwaite is Deputy Managing Director of Consolidated Gold Fields Australia. Operationally and financially, NPA is guided by commercial principles.

At the end of 1989/90, operations at NPA were in the final stages of reorganisation. Staff numbers had been rationalised with the help of voluntary redundancy programs; at end June 1990 there were 278 staff at NPA compared with 487 at the end of 1989.

Negotiations designed to achieve more flexible work patterns and operating arrangements for plant and equipment, consistent with commercial manufacturing practices, are nearly completed. These changes will permit NPA to respond quickly and cost effectively to new business opportunities and will support initiatives to develop new markets for NPA's products.

The Board of NPA has approved the first budget of the ‘new’ organisation, which involves a significant shift in emphasis from NPA being a cost centre to that of a profit centre. Major objectives are an increase in sales volume of currency notes (in Australia and overseas), as well as significant increases in sales of other products, reflecting increased market development efforts. The budget includes provision for an intensive training program aimed primarily at improving operating skills; spending on training is projected to be around 3 per cent of salaries.

NPA is pursuing opportunities to exploit the lead it has established for Australia in plastic banknote technology. It was successful during 1989/90 in winning a contract to produce a plastic commemorative $50 note for Singapore incorporating an optically variable device (OVD) similar to that in Australia's 1988 commemorative note. Interest has also been expressed in the technology by a number of other issuers. Adoption of the technology by Australia for its general issue notes can be expected to encourage greater awareness and interest overseas.

In addition to on-going work to fine-tune the new plastic technology, NPA has continued an active program of research and development designed to maintain its worldwide reputation for innovation and quality products.

The Exhibition and Display Gallery at NPA's Craigieburn plant continues to be very popular with visitors. Some 28,000 people visited the Gallery during 1989/90, more than double the number in 1988/89.