Reserve Bank of Australia Annual Report – 2019 Financial Statements Note 3 – Distribution Payable to the Commonwealth

Net profits of the RBA, less amounts transferred to the RBRF, are paid to the Commonwealth as required by section 30 of the Reserve Bank Act (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 where they 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 2018/19, the RBA recorded a net profit of $4,549 million. Unrealised valuation gains of $2,970 million were transferred to the unrealised profits reserve, with the balance of net profit transferred to the Statement of Distribution. In addition, a sum of $106 million was transferred from the asset revaluation reserve to the Statement of Distribution following the sale of the RBA's office building in Melbourne (see Note 7). Earnings available for distribution therefore amounted to $1,685 million in 2018/19.

As the Board regarded the balance of the RBRF as appropriate for the risks held on the balance sheet, it recommended that no transfer to this reserve be made from net profit in 2018/19. Accordingly, the Treasurer, after consulting the Board, determined that the full sum of earnings available for distribution be paid as a dividend to the Commonwealth. An amount of $889 million was paid to the Commonwealth in 2018/19, consisting of $220 million from 2016/17 earnings and $669 million from 2017/18 earnings.

Opening balance 889 1,286
Distribution to the Commonwealth (889) (1,066)
Transfer from Statement of Distribution 1,685 669
As at 30 June 1,685 889