RBA renovation: a $260m office upgrade now costs $1.17bn

The Reserve Bank of Australia's renovation of its head office at 65 Martin Place, Sydney, was approved by Parliament's Public Works Committee in March 2020 at a cost of $259.7 million. According to the RBA's September 2026 project update, the approved budget is now $1.17 billion, and the job won't be finished until July 2031.

That's 4.5 times the price Parliament signed off on (an Aussie Outrage calculation: $1.17 billion divided by $259.7 million). The reason, the RBA says, is asbestos: far more of it than anyone planned for, through the floors, beams, ceilings and façade of the building.

The bank that has raised interest rates five times in 2026 to cool spending is now six years late on its own office, at about $910 million more than the committee approved.

The RBA renovation cost, year by year

The completion dates come from the RBA's own documents. In its April 2024 briefing to Parliament's Public Works Committee, released under freedom of information, the RBA said the option approved in 2020 had a completion date of July 2025. The same briefing said the blowout "extends delivery time by 4 years to November 2029". The RBA's September 2026 update now says July 2031: six years later than first planned.

What went wrong

Asbestos, and lots of it. The RBA's project timeline says the 2018 plan assumed "limited asbestos following earlier remediation", meaning a clean-up in the 1990s. In April 2024 the RBA told the Public Works Committee its occupational hygienist "has now found the building to be 4-5 times worse than a typical aged building". The speaking notes for that briefing are blunter: "Friable asbestos…not the good kind…"

It's in the structure itself. According to the same RBA briefing, asbestos was found "within the beams supporting floors, sprayed on the concrete soffits (underside of ceilings), between layers of concrete within work floor slabs, throughout the façade and within services risers". The notes add: "While encapsulated in some instances, most is not encapsulated and requires removal."

The building was also not up to code. The RBA's briefing told the committee that "important structural elements do not meet requirements for seismic and fire resistance", and that the walls around the lift core and fire stairs were "unreinforced and non-compliant for fire resistance". The 1960s floor slabs, it said, "are not of high quality".

So the plan changed from a refurbishment to a near rebuild. The RBA's redevelopment page says the contamination requires "the building to be stripped back to its steel frame". Its April 2024 briefing priced three ways to deal with the asbestos: minimum remediation for $774 million, remediating the concrete structure with a new façade for $1,021 million, or a new concrete structure and façade for $1,090 million. The RBA chose the last one.

The staff moved out. Staff were moved to leased offices at 8 Chifley Square in 2024, according to the RBA's timeline. Its April 2024 briefing put the extra operating cost at $108.8 million over six years, "comprising temporary lease, staff project resourcing and relocation costs".

Why didn't the RBA just sell the building?

The RBA looked at selling. Its April 2024 briefing compared continuing the renovation with three sale options: sell and lease the building back, sell and lease elsewhere in the Sydney CBD, or sell and buy another building.

The RBA concluded that continuing was "the most cost effective over the 30 year whole of life", using a 5% discount rate that the Department of Finance peer reviewed. The briefing also said that at a 7% discount rate, selling and leasing back would come out cheaper.

The building is on the Commonwealth Heritage List. The RBA's briefing argued that the sale options carried "unquantifiable time risks" from heritage limits, approvals and finding a buyer.

The RBA's speaking notes put the blowout this way: "It is interesting to note, in comparison to Option 0, Option 1 is only $500m more than what the Bank would have spent anyway over 30 years". Option 0 was the original project with no asbestos, which the RBA itself described as "not a genuine option".

Who's to blame?

The RBA says nobody could have known. Its briefing to Parliament said that "despite a major asbestos removal project in the 1990's and recent reports describing the building as having minimal amounts of asbestos", the first 12 months of construction "uncovered significant asbestos and other latent conditions". Its redevelopment page says it decided that "retaining ownership and redeveloping 65 Martin Place is the most responsible and cost-effective long-term solution".

Parliament's watchdog accepted the increase. The Public Works Committee, which approved the original $259.7 million in 2020, inspected the site in April 2024. In its report the following month, it said it "is satisfied that the increase in cost is necessary and represents an effective use of money". The committee also noted it has no legal obligation to report on cost increases after a project is approved.

What nobody has explained is how a building that had been through a major asbestos removal in the 1990s, with "recent reports" saying there was little left, turned out to be four to five times worse than a typical building of its age. The asbestos reports mentioned in the RBA's briefing are not among the documents on its redevelopment page.

Who pays for it?

The RBA's September 2026 update says the project "is wholly funded by the RBA and does not draw on the Commonwealth Budget".

That's true, but it isn't the whole story. Under section 30 of the Reserve Bank Act 1959, the RBA's earnings available for distribution, after any amount the Treasurer sets aside for the bank's reserve fund, are paid to the Commonwealth as a dividend, according to the RBA's annual reports. Every dollar spent on Martin Place is a dollar that can't one day go back to the Budget. The ABC made the same point when it first reported the blowout in May 2024.

The renovation also shows up in the RBA's running costs. Its 2025 annual report says that following a review of capital spending on the renovation, $48.5 million in 2023/24 and $81.7 million in 2024/25 that had been counted as capital was reclassified as operating expenses. The same report shows the bank's premises costs rising from $30.5 million in 2022/23 to $60.1 million in 2023/24, the year staff moved out, and $67.6 million in 2024/25. The RBA doesn't break down how much of that rise is the temporary lease.

What we're getting for $1.17 billion

To be fair to the RBA, it isn't getting nothing. According to its April 2024 briefing, the chosen option strips the tower back to its steel frame, builds a new concrete structure and façade, keeps the heritage ground-floor foyer, and removes the asbestos from the basements. Any floors the RBA doesn't need will be sublet for rent.

The RBA's redevelopment page says the work will also "address building compliance, energy performance and operational requirements", and its briefing to Parliament promised "a significantly enhanced building asset with an extended structural life". The RBA's 2025 annual report describes the base building infrastructure as "end of life". Something had to be done.

The question is whether it had to cost this much, and whether enough was known about the building when the committee approved less than a quarter of today's price.

For scale

The increase alone, about $910 million (an Aussie Outrage calculation: $1.17 billion less the $259.7 million approved), is more than twice what the RBA spent on all its staff in 2024/25. Its 2025 annual report puts staff costs at $394.9 million for that year.

The RBA's August 2025 progress update shows $208.8 million approved for "closeout of completed project", the original refurbishment that was overtaken by the asbestos, and a budget for stage 1 demolition and remediation that rose from $324.8 million approved to $329.8 million. It doesn't publish budget figures for the new build or the fit-out.

For other public projects that cost multiples of their first price tag, see the blowout leaderboard. For another federal agency's spending that ran far past its first figure, see the Bureau of Meteorology's $96.5 million website. For another federal agency's office bill, see the ATO's $73.4 million Adelaide office fit-out. And for what government offices spend on the small stuff, see the $1.6 million the Victorian Opposition says the Big Build spent on office pot plants.

The Reserve Bank asks Australians to accept higher interest rates to keep spending in check. Its own head office has gone from $260 million to $1.17 billion, and from 2025 to 2031. We'll update this page when the RBA publishes its next project update.

Top photo: the Reserve Bank of Australia's head office at 65 Martin Place, Sydney, behind construction hoardings, April 2025 (cropped). Photo: Nick-D, CC BY-SA 4.0, via Wikimedia Commons.