Annual Report 2008-2009
© Commonwealth of Australia 2009
ISBN 978‑0‑642‑74542‑2
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A copy of this document appears on the Australian Office of Financial Management web site (www.aofm.gov.au). The 2008‑09 statistical information is also available on the website.
Printed by CanPrint Communications Pty Ltd.
1 October 2009
The Hon Wayne Swan MP
Treasurer
Parliament House
CANBERRA ACT 2600
Dear Treasurer
I have pleasure in presenting the Annual Report of the Australian Office of Financial Management for the year ending 30 June 2009 for presentation to the Parliament.
The Report has been prepared in accordance with guidelines approved on behalf of the Parliament by the Joint Committee of Public Accounts and Audit.
Yours sincerely
SIGNED
Neil Hyden
Chief Executive Officer
AOFM Role
The AOFM aims to advance economic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government.
Contents
Review by the Chief Executive Officer
Treasury Bond market
Additional Treasury Bond issuance and investment of the proceeds
Management of the portfolio
Interest rate swap terminations
Residential mortgage-backed securities
Other changes
Portfolio outcomes
Public Register of Government Borrowings
Operational risk
Cooperation with other debt managers
Staff
Sovereign Risk Manager of the Year award
Role, function, outcome and output structure
Organisational structure
Part 2: Operations and performance
Introduction
Treasury Bond issuance
Investment of the proceeds of additional Treasury Bond issuance
Cash management
Minimising debt servicing costs subject to acceptable risk
Interest rate swap terminations
Credit management of interest rate swaps
Residential mortgage‑backed securities
Communications Fund
Operational risk
Settlement operations
Information Technology operations
Cooperation with other debt managers
Agency financial performance
Part 3: Management and accountability
Corporate governance
Audit
Operations
Business continuity arrangements
Judicial decisions
Management of human resources
Assets management
Purchasing
Consultants
ANAO access clauses and exempt contracts
Statement by the Chief Executive Officer and Chief Finance Officer
Structure of the AOFM's portfolio
Funding
Appropriations and other sources of funding
Advertising and market research
Grant programs
Freedom of information
Ecologically sustainable development
Index of compliance with requirements
Enquiries
Internet address
List of tables
Part 2: Operations and performance
Table 1: Treasury Bond tender results — 2008-09
Table 2: Australian Government debt and assets administered by the AOFM
Table 3: Derivative counterparties by credit rating as at 30 June 2008 and 30 June 2009
Table 4: RMBS Investments as at 30 June 2009
Part 3: Management and accountability
Table 1: Operative and paid inoperative staff as at 30 June 2008 and 2009
Table 3: Consultancy contracts
Table 4: Consultancy contracts of $10,000 or more let during 2008-09
Table 1: General Government Sector funding requirement and funding sources
Table 2: AOFM gross appropriations and other funding
Table 3: 2008 09 non campaign advertising expenditure $10,900 or more
List of figures
Figure 1: AOFM organisational structure
Part 2: Operations and performance
Figure 1: Typical RMBS Structure
List of charts
Part 2: Operations and performance
Chart 1: Treasury Bonds outstanding as at 30 June 2009 and issuance in 2008‑09
Chart 2: Semi‑government bond spreads for select semi‑government bond lines
Chart 3: Net mark‑to‑market and accrual performance of Debt Hedge Portfolio
Chart 4: Within‑year funding requirement 2008‑09
Chart 5: Short term financial asset holdings and Treasury Notes on Issue 2008 09
Chart 6: 91‑day moving average cash balance
Chart 7: Changes in debt servicing cost between 2007 08 and 2008 09
Chart 8: Modified Duration — nominal component of Australian dollar Long Term Debt Portfolio 2008 09
Chart 9: Total Savings arising from interest rate swaps (inclusive of revaluations)
Next: Review by the Chief Executive Officer
Return to: Contents