Corporate Plan 2023/24

The Corporate Plan is the Bank’s primary planning document for the period from 2023/24 to 2026/27. It sets out the Bank’s objectives, how we intend to achieve them, and the strategic priorities that we will work towards over the coming four years.

It has been prepared in accordance with section 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.

Download the Corporate Plan PDF version 4.2MB

Introduction

About the Reserve Bank of Australia

Our purpose

To promote the economic welfare of the Australian people through our monetary and financial policies and operations.

Our objectives

To deliver on our purpose, the Reserve Bank has five key objectives:

Price stability and full employment

Maintaining inflation between 2 and 3 per cent on average, over time, is central to the Bank’s mandate to promote the economic welfare of the Australian people. Low and stable inflation – or price stability – preserves the value of money, reduces uncertainty, and supports strong and sustainable economic growth over the longer term. It helps businesses and households make sound spending and investment decisions, and it protects the savings of Australians. Price stability also underpins the creation of jobs and sustained full employment – meaning more people have access to work and the opportunities that come with it. The Bank achieves this objective through its monetary policy.

The stability of the Australian financial system

A stable financial system is a precondition to maintaining price stability and full employment. It facilitates the smooth flow of funds between savers and investors, and supports innovation, growth and the taking of opportunities. The Bank contributes to financial stability by working closely with the Council of Financial Regulators (CFR) to identify and address risks, overseeing market infrastructures that are central to the effective operation of the financial system and providing adequate liquidity.

A secure, stable and efficient payments system

Australians expect payments to be cost effective, convenient and accessible. Having a reliable payments system is important for the smooth functioning of the economy and financial system. The Bank promotes these objectives as both supervisor and regulator of the payments system and as the owner and operator of critical national payments infrastructure.

The delivery of efficient and effective banking services to Australian government agencies

The Reserve Bank must, insofar as the Commonwealth of Australia requires it to do so, act as banker for the Commonwealth. We provide the Australian Government and its agencies with access to high-quality, cost-effective and secure systems to collect, pay and manage government funds. This, in turn, supports the Commonwealth to fulfil its responsibilities and serve the Australian people.

The provision of secure and reliable banknotes

While Australians have reduced their use of cash for everyday transactions, they continue to use banknotes as a store of value and as a back-up payment method. Ensuring Australians have confidence in their banknotes is critical to meeting these needs. We work to preserve this confidence by designing, creating and issuing Australian banknotes that are secure and reliable. This is done in partnership with our wholly owned subsidiary, Note Printing Australia Limited.

Our operating environment

The operating environment we will face over the coming four years will be shaped by an array of issues – both external and internal. The factors we expect to be most material over the coming four years are discussed below.

External

• To address high inflation, monetary policy has been tightened quickly and substantially across the world, initially to withdraw the stimulatory settings introduced in response to the COVID-19 pandemic and then to move policy into a restrictive stance.
• Consumer price inflation is declining but still too high, and core inflation has been persistent both globally and domestically. Long-term inflation expectations are currently stable; however, if they were to rise it would be costly to bring inflation back to target.
• The labour market is very tight. The unemployment rate is around a 50-year low and the share of the population with a job is at record levels. That said, tighter monetary policy to bring about a better balance of demand and supply in the economy is expected to see a modest rise in the unemployment rate.
• Climate change, and the actions taken in response (both in Australia and abroad), introduce both challenges and opportunities for Australia’s economy and financial system. Climate change is also likely to increase the variability of inflation and output.
• Productivity growth has been weak for some time. Persistently weak productivity would constrain future real wages and complicate monetary policy.
• Many households have high levels of debt. For some, the pace of increase in interest rates has created material financial pressure. Households’ and firms’ loan arrears are likely to rise, but from a very low level.
• There continues to be unusually high liquidity in the financial system, but this will decline as funds borrowed under the Bank’s Term Funding Facility (TFF) fall due and the Bank’s holdings of government bonds mature.
• Authorities globally are reviewing bank regulation, supervision and crisis-management arrangements, in response to stresses in parts of the international banking system.
• Cyber-attacks have become more regular, widespread and sophisticated.
• There is rapid innovation in the payments system. The nature of competition is also changing as large technology companies and fintechs offer new products and services.
• The Australian Government is modernising the regulatory framework for payments, including the Bank’s powers to regulate the system and its participants.
• Australians are shifting away from using cash for payments, putting pressure on distribution infrastructure. The government supports Australians having continued access to cash.
• The Payments System Board requested an external review of RITS, following a major outage in 2022. This resulted in a number of recommendations the Bank is committed to implementing.
• Payment system technology and standards are changing. RITS is adopting ISO 20022 to improve standardisation of messaging, and will update the technology used by members to access RITS.
• Australian government agencies will likely need to adapt their banking and payments processes and systems, in response to the evolution in payments technology and a broader transition away from cheques and direct entry payments using the Bulk Electronic Clearing System.

Internal

• The independent Review of the Reserve Bank contained 51 recommendations on how to strengthen the Bank and its policy-making processes. Many of these will require changes to the internal processes and structures of the Bank.
• The Reserve Bank Act 1959 is being revised in response to the recommendations of the Review. The revised legislation will provide for a third Reserve Bank board that will oversee the governance of the Bank. Putting this into effect will require significant change to our internal governance arrangements. (The Governance Board will be the accountable authority under the Public Governance, Performance and Accountability Act 2013, replacing the Governor.)
• The Bank is undertaking a major refurbishment of its Head Office. This will upgrade base building infrastructure that is at end-of-life and create a safe, contemporary and flexible workplace for the future. The Bank will temporarily relocate its Head Office for the duration of this project.
• The tight labour market has increased the challenge of attracting and retaining staff, especially skilled technology workers. The mix of skills we require is also evolving, as is the nature of the qualifications and training available to recruit.
• The Bank intends that its workforce reflects the diversity of the community in which it operates. We have more work to do to achieve cultural and linguistic diversity.
• Our growing expenditure on technology reflects its role as a key enabler of Bank operations and the resilience risks we face. We are increasing our use of cloud services, automating technology management practices, continuing to mature our cybersecurity defences, and embarking on a four-year program to modernise our core network infrastructure to improve overall technology resilience and stability.

Our strategic priorities

Monetary policy decision-making that is fit for the future

Good decisions are founded on processes that provide quality information, enable deliberation and debate and promote accountability. We will enhance the processes supporting monetary policy decision-making, invest in our capacity for analysis and facilitate greater debate. We will also improve our capability to explain decisions to different audiences.

To achieve this, we will:

Provide more opportunity for deep and informed deliberation

• Redesign the processes, meetings and materials supporting the Board’s decision-making, to emphasise analysis and options and to support debate and strategic thinking.
• Provide opportunities for Board members and staff to engage more deeply on policy.

Invest in key analysis and capabilities to use a wide range of data

• Refine our analysis to be tightly focused on key issues that are relevant for good decision-making.
• Equip staff with the tools and skills necessary to analyse a range of information relevant to the policy decision.

Enhance our communication capabilities

• Embed communication considerations throughout the policy-making process.
• Provide a clearer explanation of monetary policy decisions to our various audiences.

Highly resilient payment and banking services

It is critical to the Australian economy and financial system that the payment settlement system and banking services we provide are highly available. To reach this level of resilience we will enhance the operating model, cybersecurity defences and technology infrastructure that support them.

To achieve this, we will:

Uplift the operating model

• Optimise the capability and capacity of resources supporting our critical services, including improving onboarding processes and training for IT staff, and knowledge management systems to support them.
• Standardise system development processes and further automate change and technology management.
• Streamline IT controls, embed them in business processes, and uplift related assurance activities.

Enhance cybersecurity controls

• Implement the Australian Centre for Cyber Security’s ‘essential eight’ cyber strategies to the highest level of maturity.
• Accelerate the patching of technology vulnerabilities.
• Enhance data recovery processes and testing for disruption scenarios.

Modernise core technology infrastructure

• Consolidate and replace core infrastructure components across our data centres.
• Transition to cloud services where appropriate.
• Standardise technology monitoring tools.

Shaping the future of money in Australia

Australians need safe, efficient and cost-effective payment options, both now and in the future. As the payments landscape changes, we will help shape the future of money by exploring the case for new digital forms of currency, and by ensuring cash remains a viable means of payment for those who need or want it.

To achieve this, we will:

Determine whether a policy case exists for a central bank digital currency (CBDC)

• Assess the potential benefits, risks and implications of issuing a CBDC in Australia.

Support innovation and resilience in wholesale digital payments

• Examine how digital money – either publicly or privately issued – and supporting infrastructure could enhance wholesale payments or settlements, support the development of tokenised asset markets or enhance cross-border payments functionality.

Support access to physical cash

• Assist the Australian Government in developing policy options and contingency plans to ensure those who need or want cash can obtain it.

High-quality leadership and an open and dynamic culture

Delivering on our mandate requires a culture where people are encouraged to collaborate, innovate and constructively challenge. Such an environment requires leadership that promotes diversity of opinion, active debate and continuous learning. It also requires our people to be clear about their roles and responsibilities, and to feel confident to execute on them.

To achieve this, we will:

Define and establish our target organisational culture

• Identify the cultural attributes we need to achieve our vision.
• Develop and implement a comprehensive plan to drive the desired cultural change.
• Build a set of measures to track progress, provide insights and enable correction where needed.

Invest in leadership capability and development

• Refresh our leadership framework to align with the cultural attributes we are seeking.
• Establish the expectations required of leaders, and hold them accountable to these.
• Implement development programs for all people leaders to equip them to meet these expectations.

Create an environment that promotes the development and fulfilment of our people

• Strengthen talent management so that our people are supported to develop and achieve their career aspirations.
• Provide a fulfilling work experience, including with appropriate opportunities and flexibility.

Smarter, simpler and faster ways of working

In a world that is complex, fast-paced and data rich, our internal ways of working need to be agile to respond quickly to emerging opportunities and risks. We will simplify our processes and governance models to enable more timely decision-making, supported by appropriate access to relevant data and technology.

To achieve this, we will:

Improve the effectiveness and efficiency of organisational decision-making

• Recruit a Chief Operating Officer to drive cross-functional collaboration, improve organisational agility and coordinate the delivery of support services to the Bank.
• Streamline internal governance arrangements and align these to the new Governance Board.
• Improve strategic planning and prioritisation capabilities, including being quicker to stop work when appropriate.
• Embed risk management into organisational processes and thinking.

Facilitate richer data and analytics

• Make more data available through better data sharing, discoverability and access.
• Enhance analysis through the use of innovation and best-practice analytical tools and techniques.

Enable new ways of working through technology

• Utilise the power of digital solutions, technology platforms and automation to remove unnecessary manual intervention in processes.
• Increase adoption of emerging technologies including cloud computing services and generative AI.

Measuring our performance

This section outlines the key activities we will undertake to deliver on our objectives, and how we will measure and assess our performance.

Risk oversight and management

The Reserve Bank cannot achieve its objectives without clear and effective management of risk.

Risk and Compliance Management Framework

The Bank’s Risk and Compliance Management Framework (RCMF) is the primary way we ensure risk and compliance activities are appropriately managed to support our objectives. Key elements of the framework include:

Governance

Key risks

A summary of the key risks we are required to manage, and the approach we take to mitigate them, is shown below. These risks are often ones where more work is required to ensure these are managed within risk appetite.

We also need to manage the following routine risks (these are managed within the RCMF described above):

• The value of our assets can be affected by changes in interest rates, exchange rates, credit quality and liquidity conditions.
• Our staff and other workers are exposed to potential work health and safety issues in the course of their duties.
• We manage a range of confidential, personal and sensitive information. Loss or inadvertent disclosure of this information would impair our ability to function effectively and possibly constitute a breach of our legal responsibilities.