Initially estimated at $260 million, the project’s expenses have soared to $1.2 billion due to extensive asbestos discovered in the building.

RBA governor Michele Bullock, addressing the federal parliament’s economics committee today, cautioned that costs might rise further.

The extensive amount of asbestos has transformed what was intended as a simple refurbishment into a near-total demolition, requiring the building to be stripped to its steel structure, asbestos removed, and then fully reconstructed and fitted out.

Bullock mentioned that the bank has yet to thoroughly analyze the cost estimates for stages 2A and 2B, which involve the rebuild and refitting phases of the project.

“Let me just say that renovation is not what it is anymore, and I really would rather not be in this position,” she said.

“I’m not a developer, and what we are now faced with is a development.”