The AOFM's role is to ensure the Australian Government can meet its spending, investment and debt payment obligations. This also requires the AOFM to provide advice to the government about associated financial risks.
How does the AOFM borrow money on behalf of the Australian Government?
The AOFM borrows money on behalf of the Commonwealth by issuing Australian Government Securities (bonds).
Learn more about Australian Government Securities (AGS).
Most AGS' are issued via electronic tenders (competitive auctions); only Registered Bidders (usually banks) can submit bids for bonds at tenders. The AOFM sets the amount available for purchase, and makes allocations based on the best (highest price) bids received at the end of the 15-minute auction.
Planning cash and debt management activities
The AOFM forecasts daily government cash flows using advice from agencies such as the Australian Taxation Office, the Department of Finance, and large spending departments (such as Treasury and Defence).
These forecasts are the basis on which the AOFM plans its annual issuance (borrowing) program. They are also used to ensure the government always has enough money to make payments. The AOFM must manage all of its operations to account for a range of potential financial market scenarios.
The AOFM provides clear, publicly available guidance on its borrowing plans, which includes tender issuance details each week. This helps smooth continuous functioning of the AGS market. Issuance decisions are guided by the issuance strategy, prevailing financial market conditions and feedback from Registered Bidders.