Territory Stories

Debates Day 3 - Thursday 21 October 1993



Debates Day 3 - Thursday 21 October 1993

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Parliamentary Record 21


Debates for 6th Assembly 1990 - 1994; ParliamentNT; Parliamentary Record; 6th Assembly 1990 - 1994




Made available by the Legislative Assembly of the Northern Territory





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Legislative Assembly of the Northern Territory

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Attribution International 4.0 (CC BY 4.0)

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Legislative Assembly of the Northern Territory



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DEBATES - Thursday 21 October 1993 sum was paid in (a) 1988-89, (b) 1989-91. (c) 1990-91, (d) 1991-92 and (e) 1992-93. Mr Dawkins - The answer to the honourable member's question is as follows: (1) The Reserve Bank's authority to issue currency notes derives from section 34 of the Reserve Bank Act 1959* (2)(a)(i) and (ii) The volume of currency notes in circulation fluctuates during the year in response to the incidence of paydays, pension days and holidays. The commercial banks hold a stock of currency notes (at their cost) to meet the cash requirements of their customers. Banks can return notes to the Reserve Bank which are surplus to the community's needs, or order notes for delivery from the Reserve Bank if the communitys demand for notes is expected to exceed banks' stocks of notes. There are established administrative and transport procedures in place to facilitate these note movements. (2)(b)(i) and (ii) The amount of currency notes in circulation and its denominational split-up is determined largely by community preferences. The Reserve Bank stands ready to meet that demand, as conveyed through the banking system, and holds inventories of currency notes of all denominations to ensure the public's requirements are met. (3) Banks purchase currency notes from the Reserve Bank at face value. Banks also pay security companies for the costs of transport and in-transit insurance. When notes are returned to the Reserve Bank, the repurchases are made at face value. (4) Banks pay the Reserve Bank for currency notes through direct debiting of their Exchange Settlement Accounts at the Reserve Bank. (5) See answer to 4. (6) The Reserve Bank issued currency notes (and received payments from banks) to the value of approximately $50 billion and $51 billion in 1990-91 and 1991-92, respectively. (7) The Reserve Bank does not make a profit from the printing of Australian currency notes, but earns a return from the investment of funds paid by banks for notes on issue. (See also the answer to part 8 of the Question). (8) Since 1988-89, the accounts of the note issue function of the Reserve Bank have not been kept separately from the accounts for the Bank's other activities. The 1988-89 accounts of the Bank showed that the profits of the Note Issue Department were $l40m; all of that profit was paid to the Commonwealth in the 1989-90 budget year. Profit is derived from the issuing of legal tender notes in the following way: 10 254

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