Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
1301.0 - Year Book Australia, 2002  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 25/01/2002   
   Page tools: Print Print Page RSS Feed RSS Bookmark and Share Search this Product  
Contents >> Financial System >> Money and the payments system

The payments system supports trade and commerce in a market economy. Notes and coin are one means of payment. Liquid balances held at financial institutions are also available potentially for transactions needs, under cheque and other forms of transfer facilities, and thus add to the money supply.

From 1 July 1998 a new financial regulatory framework came into effect, in response to the recommendations of the Financial System Inquiry (the Wallis Committee). Under these arrangements the Reserve Bank has stronger regulatory powers in the payments system in accordance with the Payments Systems (Regulations) Act 1998, to be exercised by a Payments System Board within the Bank.


Money

Australia has a decimal system of currency, the unit being the dollar, which is divided into 100 cents. Australian notes are issued in the denominations of $5, $10, $20, $50 and $100 and coins in the denominations of 5c, 10c, 20c, 50c, $1 and $2. $1 and $2 notes were replaced by coins in 1984 and 1988 respectively, and 1c and 2c coins ceased to be issued from 1 February 1992. Table 26.32 shows the value of notes on issue at the last Wednesday of June in the last three financial years. Table 26.33 shows the value of coin on issue at the same time points.


26.32 VALUE OF AUSTRALIAN NOTES ON ISSUE
Last Wednesday in June

1999
2000
2001
$m
$m
$m

$2
46
46
45
$5
379
397
428
$10
639
646
657
$20
1,850
1,917
1,981
$50
10,356
11,188
11,886
$100
10,282
11,240
11,935
Total
23,552
25,434
26,936
%
%
%
Increase
8.8
8.0
5.9

Source: Reserve Bank of Australia.


26.33 VALUE OF AUSTRALIAN DECIMAL COIN ON ISSUE

Last Wednesday in June

1999
2000
2001
$m
$m
$m

1c
22
22
22
2c
30
29
29
5c
117
123
129
10c
107
114
120
20c
154
162
169
50c
224
234
246
$1
381
396
411
$2
552
589
616
Total
1,588
1,669
1,746
%
%
%
Increase
5.1
5.1
4.6

Source: Reserve Bank of Australia.


Money supply measures

The money supply, as measured and published by the Reserve Bank, refers to the amount of cash held by the public plus deposits with specified financial institutions. The measures range from the narrowest category, money base, through to the widest category, broad money, with other measures in between. The measures mainly used are as follows.

  • Money base, which comprises holdings of notes and coin by the private sector, deposits of banks with the Reserve Bank, and other Reserve Bank liabilities to the private sector.
  • M3, which is defined as currency plus bank deposits of the private non-bank sector.
  • Broad money, which is defined as M3 plus borrowings from the private sector by non-bank financial intermediaries (including cash management trusts) less their holdings of currency and bank deposits.

The money supply under each of these measures at end June of the last three years is shown in table 26.34.


26.34 MONEY SUPPLY MEASURES

June 1999
June 2000
June 2001
$m
$m
$m

Money base
31,752
28,085
29,607
M3
375,835
406,501
440,256
Broad money
451,524
480,135
518,193

%
%
%
Percentage change(a)
11.3
6.3
7.9

(a) Of broad money, over level at end of preceding June.

Source: Reserve Bank of Australia.


Payments system

Following recommendations by the Financial System (Wallis) Inquiry, the Payments System Board was established within the Reserve Bank on 1 July 1998. The Payments System Board has responsibility for determining the Reserve Bank's payments system policy, under the powers set out in the Payments Systems (Regulation) Act 1998. The payments system has components for settling large amounts, and components for settling retail amounts.

The High Value Clearing System (HVCS) was implemented in August 1997. The HVCS allows all holders of Reserve Bank exchange settlement accounts to settle large value payments through a system designed to process a high volume of transactions. On 1 March 1999 the Payments System Board announced easing of restrictions on eligibility for holding exchange settlement accounts. APRA-supervised institutions and some institutions not supervised by APRA potentially now have access.

Initially, the settlement of payments was on a net deferred basis, where settlement of interbank obligations was not completed until 9 a.m. on the day following the sending of payment instructions. This was changed to a real-time gross settlement (RTGS) basis on 22 June 1998. This new settlement basis, where payments are settled immediately, contributes substantially to the reduction of settlement risk and systemic risk in the Australian payments system.

Additionally, the Board has declared the Reserve Bank Information and Transfer System (RITS) and the Austraclear System (FINTRACS) to be approved RTGS systems.

About 75% of the value exchanged in the payments system is cleared via the HCVS.

Table 26.35 shows the number of points of access to the payments system. Branches are access points staffed by employees of financial institutions. Agencies are staffed by other than employees of financial institutions such as postmasters or storekeepers, and exclude school agencies and giroPost agencies. giroPost provides a limited range of services at Australia Post offices on behalf of participating financial institutions. Electronic points of access include ATM and electronic funds transfer at point of sale (EFTPOS) terminals.


26.35 POINTS OF ACCESS TO THE AUSTRALIAN PAYMENTS SYSTEM

June 1999

no.
June 2000

no.
June 2001

no.

Branches
- Banks
5,358
5,003
n.y.a.
- Building societies and credit unions
1,358
(a)1,208
n.y.a.
Agencies
- Banks
6,528
5,043
n.y.a.
- Building societies and credit unions
1,417
(a)887
n.y.a.
giroPost
2,724
2,814
2,821
ATM
9,387
10,818
11,915
EFTPOS terminals
265,391
320,372
362,848

(a) Numbers are preliminary and subject to revision.

Source: Australian Payments Clearing Association, 2000 Annual Report; APRA.


Previous PageNext Page

Bookmark and Share. Opens in a new window


Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.