Reserve Bank of Australia Annual Report – 2015 Financial Statements Note 3 – Distribution Payable to the Commonwealth

Section 30 of the Reserve Bank Act requires that the net profits of the RBA, less amounts set aside for contingencies or placed to the credit of the RBRF as determined by the Treasurer after consulting the Reserve Bank Board, shall be paid to the Commonwealth (see Note 1(g)). Also under section 30, unrealised profits from foreign exchange, foreign securities and Australian dollar securities are not available for distribution. Instead they are transferred to the unrealised profits reserve, where they remain available to absorb future valuation losses or are realised when relevant assets are sold or mature. Unrealised losses are, in the first instance, absorbed within the unrealised profits reserve and are offset against unrealised profits accumulated from previous years. For purposes of distribution, if such losses exceed the balance in this reserve, the amount by which they do so is initially charged against other components of income, with any remaining loss absorbed by the RBRF.

In 2014/15, the RBA recorded a net profit of $6,888 million. Unrealised gains of $3,434 million were transferred to the unrealised profits reserve. Earnings available for distribution therefore amounted to $3,454 million in 2014/15.

After consulting the Board, the Treasurer determined that a sum of $1,570 million was to be placed from distributable earnings in 2014/15 to the credit of the RBRF. Accordingly, a sum of $1,884 million is payable as a dividend to the Commonwealth from earnings available for distribution. The Treasurer has determined that an amount of $1,560 million be paid to the Commonwealth in September 2015, consisting of $942 million from 2014/15 earnings and a sum of $618 million deferred from 2013/14 earnings. The balance of 2014/15 earnings of $942 million will be paid early in 2016/17. A dividend of $618 million was distributed in August 2014 from earnings in 2013/14.

Note 2015 $M 2014 $M
Opening balance   1,235
Distribution to the Commonwealth   (618)
Transfer from Statement of Distribution   1,884 1,235
As at 30 June   2,501 1,235