The Reserve Bank’s top two executives clocked up remuneration gains of more than 10% in the past year, or not far shy of twice the inflation rate.
During his final year as governor, Philip Lowe took home $1,147,465 in base pay, bonuses, superannuation and other payments. That sum was about 10.5% higher than a year earlier, according to the bank’s annual report, which released on Thursday.
Michele Bullock, who was deputy governor prior to her promotion to the top role last month, earned remuneration totalling $828,313. That sum was almost 12% more than in the previous year when Bullock was an assistant governor for part of the period.
Payment for the two positions are recommended by the RBA’s remuneration committee and neither the governor nor the deputy take part in the decisions, the report said. In addition, the report listed 171 “highly paid” staff who were paid at least $240,000.
The 2022-23 fiscal year included 10 of the 12 increases in the official interest rate. Since May 2022, the cash rate has increased by 400 basis points, lifting the share of disposable household income going to debt repayments to a record of almost 10%.
The RBA has left rates on hold for four months in a row, but a 13th increase in the current series is on the cards if September quarter inflation figures – due out on 25 October – surprise on the high side.
The RBA’s own balance sheet posted another $6bn in losses, extending the central bank’s negative equity position to $17.7bn. The losses resulted mostly from the lower market value of its bonds holdings, which fell as yields increased in the past year.
The negative equity “does not affect the bank’s operations or its ability to perform its policy functions,” Lowe said in a foreword to the report.
“Nonetheless, the board will seek to restore the bank’s capital over time through the retention of future profits, rather than paying these as dividends to the government,” he said.
“The treasurer [Jim Chalmers] has indicated his continued support for this approach, noting that a decision about retention of earnings is made each year.”
The RBA has historically made a profit in most years on its market operations, turning over billions of dollars to treasury.
The RBA said governor Lowe received a 2.75% increase from 1 July 2022 after two years when the award set by the Remuneration Tribunal had been flat.
Lowe’s increase for the year was also made larger by accounting tweaks, including changes in accrued leave entitlements, the bank said.
• This story was updated on 24 October to add further details
