RBA pays dividend of $1.3bn to govt

THE Reserve Bank of Australia will pay the federal government a dividend of $1.3 billion for 2016/17, a substantial reduction on the previous year after a rising Aussie dollar hurt the value of foreign asset holdings.

Australia’s central bank recorded a $900 million operating loss last financial year, according to the RBA annual report released yesterday.

Governor Philip Lowe said exchange rate losses and low interest rates affected the performance, while underlying earnings were $1 billion and $300 million was realised in capital gains.

The RBA paid a $3.2 billion dividend to the Commonwealth in 2015/16.

Dr Lowe, who has just completed his first year as head of the bank, received a total remuneration package of $1.02 million with a base salary of $744,600 – slightly less than his predecessor Glenn Stevens, who in September, 2016 was awarded a package of $1.03 million with base salary of $878,549.

RBA deputy governor Guy Debelle received a total package of $765,000 with base salary of $558,450.

Salaries for the heads of Australia’s big four banks – Commonwealth, National Australia Bank, ANZ and Westpac – are substantially higher, with Commonwealth Bank CEO Ian Narev, for example, paid $5.5 million for 2016/17, down from $12.3 million in 2015/16.