Reserve Bank gets budget boost

The Reserve Bank has welcomed a significant funding boost that will see its budget increase from $80 million in 2019/20 to $111.7 million next year.

Finance Minister Grant Robertson said the increase recognises that the number of full-time employees at the central bank will increase from 296 in 2018/19 to 468 by 2024/25.

The increase means by July 1, 2024 the budget will be $118.3 million, an annual average of $115 million for the next five years.

The bank funds itself through its own investments but its budget does require agreement with the Finance Minister. It pays a dividend to the government when revenue exceeds expenses.

Reserve Bank governor Adrian Orr said, "It is a substantial and important increase, which means the Bank can address the critical risks to delivering its mandate, respond to areas of past underinvestment, and establish a long-term model to promote the wellbeing of New Zealand."

The bulk of the increased spending will focus on the bank's core activities, particularly investing in financial supervisory and enforcement capability.

The government has also budgeted for an average $13 million each year for the next five years for issuing currency.

Orr is expected to give more details on the bank's three-year strategy on June 29.

(BusinessDesk)