Reserve Bank of Australia Annual Report – 2010 Financial Statements Note 3 – Distribution Payable to Australian Government

Section 30 of the Reserve Bank Act 1959 requires that the net profits of the Reserve Bank of Australia, less amounts set aside for contingencies or placed in the RBRF as determined by the Treasurer after consultation with the Board, shall be paid to the Australian Government (see Note 1(f)). Also under section 30, unrealised profits are not available for distribution and are transferred to the Unrealised Profits Reserve where they remain available to absorb future valuation losses or are realised when relevant assets are sold. Unrealised losses are, in the first instance, absorbed within the Unrealised Profits Reserve; if such losses exceed the balance in this reserve, the amount by which the losses exceed this balance is initially charged against other sources of income and then taken to the RBRF.

In 2009/10, the Bank's accounting loss exceeded the sum available to absorb losses in the Unrealised Profits Reserve. As a result, the Board transferred an amount of $680 million from the RBRF to offset the loss as measured on this basis. No dividend will be payable from 2009/10 earnings.

An amount of $5,227 million from earnings in 2008/09 was paid to the Australian Government in August 2009. The balance of $750 million from 2008/09 earnings was deferred and will be distributed to the Australian Government in August 2010.

2010 $M 2009 $M
Opening balance 5,977 1,403
Distribution to Australian Government (5,227) (1,403)
Transfer from Statement of Distribution 5,977
As at 30 June 750 5,977