The top two executives at the Reserve Bank each saw an increase in their annual compensation of more than 10%, which is very close to being equal to or even exceeding the rate of inflation during the past year.
Philip Lowe brought home a total of $1,147,465 in base pay, bonuses, superannuation, and other incentives during his final year in office as Governor of Virginia. According to the annual report of the bank, which was made public on Thursday, the total was approximately 10.5% larger than it had been a year earlier.
Before being elevated to the position of governor one month ago, Michele Bullock served as the state’s deputy governor, during which time she amassed a total compensation of $828,313. When compared to the prior year, in which Bullock served as an assistant governor for a portion of the same period, this total was about 12% higher.
According to the article, neither the governor nor the deputy participate in the decision-making process on the payment for the two posts, which is overseen by the remuneration committee of the RBA. In addition, the report included a list of 171 “highly paid” employees who earned an annual salary of at least $240,000.
The official interest rate was raised ten times out of a total of twelve times during the fiscal year 2022-2023. Since May 2022, there has been a 400-point increase in the cash rate, which has resulted in an increase of the proportion of disposable family income that is allocated to debt repayments to an all-time high of approximately 10%.
The Reserve Bank of Australia has fixed the interest rates unchanged for the past four months in a row, but a thirteenth rate hike in the current series is likely to be implemented if the inflation data for the September quarter – which are scheduled to get released on October 25 – come in higher than expected.
Another $6 billion in losses were placed on the RBA’s own balance sheet, bringing the total amount of the central bank’s negative equity position to $17.7 billion. The majority of the company’s losses were due to the fall in market value of its bond holdings, which occurred as a direct result of rates rising during the course of the previous year.
The negative equity “does not affect the bank’s operations or its ability to perform its policy functions,” Lowe said in the foreword to the report.
“However, the board will seek to restore the bank’s capital over time through the retention of future profits,” he said, rather than paying these as dividends to the government. “However, the board will seek to restore the bank’s capital over time through the retention of future profits.”
It was noted that a decision is made on the retention of earnings on an annual basis, and the treasurer, Jim Chalmers, has stated that he will continue to support this strategy.
The Reserve Bank of Australia has generated a profit on its market activities in the majority of years, resulting in the transfer of billions of dollars to the Treasury.