Reserve Bank of Australia Annual Report – 2016 Financial Statements Note 3 – Distribution Payable to the Commonwealth

Opening balance 2,501 1,235
Distribution to the Commonwealth (2,501) (618)
Transfer from Statement of Distribution 3,222 1,884
As at 30 June 3,222 2,501

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, shall be paid to the Commonwealth (see Note 1(h)). 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 of the Unrealised profits reserve, the amount by which they do so is initially charged against other components of net profit, and any remaining loss is absorbed by the RBRF.

In 2015/16, the RBA recorded a net profit of $2,883 million. Unrealised profits recorded in previous years were also realised during 2015/16, resulting in a net transfer of $1,729 million from the Unrealised profits reserve which became available for distribution. Earnings available for distribution therefore totalled $4,612 million in 2015/16.

The Treasurer, after consulting the Board, determined that a sum of $1,390 million was to be placed from earnings to the credit of the RBRF. Accordingly, a sum of $3,222 million is payable as a dividend to the Commonwealth. This sum will be paid to the Commonwealth in August 2016. In 2015/16, the Bank made payments totalling $2,501 million, comprising the dividend from 2014/15 profits of $1,884 million, paid in two equal instalments in August and May, and a sum of $618 million deferred from the dividend payable the previous year.