Debt Issuance
The Australian Government currently issues debt securities to the public in the form of Treasury Bonds and Treasury Notes.
- Treasury Bonds are medium to long-term debt securities that carry an annual rate of interest fixed over the life of the security, payable six monthly.
- Treasury Notes are a short-term debt security issued to assist with the Australian Government's within-year financing task.
The Australian Government has issued a range of other types of debt securities in the past such as Australian Saving Bonds, Treasury Adjustable Rate Bonds and Treasury Indexed Bonds.
Debt securities issued by the Australian Government both now and in the past are collectively known as Commonwealth Government Securities. At 30 April 2008, the total face value of Commonwealth Government Securities on issue (net of Commonwealth holdings) was $55.0 billion, comprising Treasury Bonds totalling approximately $49.0 billion and Treasury Indexed Bonds totalling approximately $6.0 billion.
Commonwealth Government Securities on issue have decreased substantially in recent years, as a result of sustained fiscal surpluses and asset sales. In view of this trend, the previous government undertook a review of the Commonwealth Government Securities market. The outcome of the review was announced in the 2003-04 Budget. It was decided that in future sufficient Treasury Bonds would be issued to support the Treasury Bond futures market. This decision followed the review’s conclusion that without a Treasury Bond futures market, the costs associated with managing interest rate risk across the economy would be higher.
As a result of this decision, debt issuance is now targeted to support the Treasury Bond futures market. The issuance of Treasury Indexed Bonds has been suspended.
On 20 May 2008 the Treasurer announced an increase in the issuance of Treasury Bonds as part of the Government’s commitment to the effective operation of Australia’s financial markets. Details of the announcement are contained in the Treasurer’s Media Release No. 58 of 2008.
Details of the debt issuance programme for the current financial year and indicative dates for tenders of Treasury Bonds are outlined in the AOFM issuance calendar.