2 weeks Ago By Thomas Coughlan
Finance Minister Nicola Willis proudly proclaimed on Thursday that the Reserve Bank’s new funding deal with the Government would see its average annual spend cut by 25% from its 2025 budget. “The new agreement allocates the bank operating expenses of $750 million and capital expenditure of $25.6 million for the period.
“That equates to average operating expenditure of $150 million a year, 25 per cent less than the bank’s $200 million operating expenses budget for the current financial year,” Willis said. The statement precipitated the scratching of some of the pointier heads around town. To preserve its independence, the bank negotiates five-year funding agreements with the finance minister, rather than coming back each year for the annual budget cycle.
The bank’s last agreement, inked in 2020, was amended in 2023 to reflect the bank’s increased responsibilities. The amended agreement had the bank spending $149m in 2024/25 – not $200m. If the true sum of spending in 2025 was $149m, then the bank’s next five-year agreement would see the bank’s annual funding roughly stand still, rather than being increased or decreased.
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