Reserve Bank of Australia Annual Report – 2008 Management of the Reserve Bank

Operating Costs

The Reserve Bank's operating costs in 2007/08 were $196.3 million, an increase of 6.2 per cent from the previous year. More than half of these costs arise from the conduct of the Bank's responsibilities for monetary and payments system policies, including its operations in financial markets. About a quarter are associated with providing banking and settlement services, including the real-time interbank settlement system and provision of transactional banking services on behalf of the Australian Government. About 15 per cent of costs arise from issuing banknotes.

Operating costs in 2007/08 were boosted by a number of factors. These include the start of operations at the Reserve Bank's business resumption site (BRS) in Sydney's north-west, which added $6.9 million to the Bank's running costs; an appreciation in the value of the Bank's buildings, leading to higher depreciation charges; and strengthened risk management and assurance activities, partly associated with containing financial risks related to managing a balance sheet of around $100 billion and operating key parts of Australia's financial infrastructure. These controls must be reliable and resilient, as the Reserve Bank operates in financial markets in Australia and overseas, more or less continuously, as well as providing key financial services to the Australian financial system and the Australian Government. Contemporary risk controls are highly ‘IT intensive’, with related costs rising accordingly. At the same time, during 2007/08 the Bank took steps to contain costs in banknote-handling activities and in providing overseas banking services to the Government.

Expenditure on staff continues to represent the Reserve Bank's largest cost, accounting for around 60 per cent of total operating costs in 2007/08, including remuneration, on-costs and other related costs for training, recruitment and the like.

Operating Costs(a)
$ million
Staff costs 68.7 67.7 73.9 77.8 85.5 91.4 101.0 110.2 119.1
Other costs 56.1 54.1 58.4 62.7 58.6 68.8 73.1 74.7 77.2
Underlying operating costs 124.8 121.8 132.3 140.5 144.1 160.2 174.1 184.9 196.3
Cost of redundancies 9.3 2.6 3.4 2.6 0.2 0.2 0.2 0.2 0.2
(a) Costs associated with the ongoing operation of the Reserve Bank, excluding NPA.

Our People

Over the year to June 2008, the total number of employees at the Reserve Bank increased by 30 to 926, a rise of 3.3 per cent; the rise was similar in full-time equivalent terms. This continues a trend of small increases over the past few years.

The Reserve Bank strives to create a stimulating work environment and offer remuneration packages that attract and engage the best employees to meet its goal of promoting Australia's economic wellbeing. Integral to this is the development of staff and the creation of opportunities for them to achieve their potential. As a research and knowledge-based organisation, this takes a number of forms, including:

  • on-the-job and structured training designed to promote functional expertise, innovation, leadership and improved productivity;
  • financial support for employees undertaking part-time study in disciplines related to their work and, in a limited number of cases, for full-time post-graduate study at universities in Australia and overseas; and
  • secondments to other organisations that extend our employees' breadth of knowledge and experience. Over the past year, for example, the Reserve Bank has had staff on secondment with APRA, ASIC, the IMF, the Bank of England and the BIS. At the same time, the Reserve Bank has hosted secondees from the Bank of England and the Reserve Bank of India. The Bank has also participated in a long-term staff exchange program with the Bank of France.

The Reserve Bank seeks to provide its employees with competitive remuneration. The majority of staff are employed on individual contracts, which provide flexibility in remuneration based on performance and market relativities. Independent consultants are engaged to ensure that remuneration is broadly consistent with market practice. Some staff are covered by the Reserve Bank's enterprise agreement. Staff, on average, received a salary increase of 4 per cent in 2007/08, with scope for a modest additional payment in recognition of good performance. The Bank keeps under review its arrangements for consulting staff on matters affecting their interests and maintains a dialogue – both formal and informal – with staff and their nominated representatives.

Staff turnover in 2007/08, at just under 13 per cent, was slightly higher than in previous years, though it remains low by industry standards. The Reserve Bank recruited 147 people over the past financial year. Over 50 new graduates and post-graduates joined the Graduate Development Program, with these recruits drawn mainly from the economics and finance fields. Increasingly, however, the Bank is sourcing graduates from areas such as law, accounting and IT. A range of methods were used to recruit other staff, including internships, traineeships and targeting experienced professionals in the fields of IT, facilities management and business services. Over the same period, 117 people left the organisation, mainly owing to voluntary resignation.

The BRS became fully operational in July 2007. In staffing this facility, the Reserve Bank sought to accommodate staff needs – primarily by asking for volunteers to be based permanently at the site – while simultaneously seeking to ensure that the required mix of skills and qualifications would be represented. There are currently 56 employees based permanently at the BRS, mainly from the banking, payments settlements and IT areas. Staff at Head Office that are deemed to be critical to the Reserve Bank's operations also regularly spend time at the BRS to ensure that work can be undertaken seamlessly from this location.

Around 6 per cent of the Reserve Bank's staff are located outside Sydney. Within Australia, the Bank employs people in Melbourne, Brisbane, Perth and Adelaide to gather economic intelligence and, in the case of Canberra, to undertake transactional banking services. Overseas, the Reserve Bank has representative offices in London and New York, whose role is to manage Australia's foreign exchange reserves and monitor developments in global financial markets across all time zones.

The Reserve Bank is committed to, and benefits from, diversity in its workplace. The Bank's diversity program aims to ensure that all staff are treated with respect in the workplace and are afforded equal opportunity throughout their careers at the Bank.


The Reserve Bank owns or leases premises in locations in which there is a business need to do so. It owns office premises in Sydney, Melbourne, Canberra, the note printing facility at Craigieburn (north of Melbourne) and the BRS, in north-west Sydney. The building in Melbourne's CBD houses the State Office for Victoria and Tasmania and is also a holding point for banknotes, while staff in the Canberra Branch provide banking services to the Reserve Bank's government customers. Surplus accommodation in the buildings that the Bank owns is leased to external tenants; gross income from these leases amounted to $6.9 million in 2007/08. The Reserve Bank's buildings are revalued annually by external valuers; they increased in value by $38 million over the past year, to $378 million as at 30 June 2008. The Bank leases office space in Adelaide, Brisbane and Perth for the Bank's other State Offices.

During the year, the Reserve Bank continued to strengthen the resilience of its facilities. With the BRS becoming fully operational, maintenance and testing arrangements have been established to ensure that critical building services at the BRS continue in the event of power or other services being lost, either temporarily or for an extended period. In addition, a project was completed at Head Office to upgrade the electrical infrastructure, which included increasing the redundancy and reliability of the main electrical switchboard.

Environmental Management

The Reserve Bank continues to develop environmental policies and initiatives to promote sustainable practices in its business operations. As a ‘greenfields’ project, the design of the BRS incorporated a number of ‘best practice’ standards, such as storm-water harvesting and grey-water recycling; the building is designed to achieve a four-and-a-half star Australian Building Greenhouse Rating. In addition, water management plans and co-mingled waste recycling programs were established at several sites and gas-fired boilers in two locations were upgraded to improve energy efficiency.


The Reserve Bank employs external contractors or professional service providers to carry out specific tasks where necessary, and also, from time to time, uses consultants. In 2007/08, the following five consultancies were undertaken in Australia.

Consultant Project Cost
($, excl. GST)
Deloitte Touche Tohmatsu Note printing process reviews 52,405 Assessment of production and security arrangements
Hay Group Pty Ltd Job evaluation 73,491 Market testing of staff remuneration
KPMG Review of risk management function 33,600 External assessment of the effectiveness of arrangements for risk management in the RBA
KPMG Review of trading operations 65,000 External assessment of the effectiveness of controls over the RBA's trading system
PricewaterhouseCoopers RBA personnel 35,000 Remuneration benchmarking review
(a) Costing $10,000 or more.