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Part 5: Other Information

Agency financial performance

The AOFM recorded an operating surplus on agency activities of $1.50 million for the 2018–19 financial year, comprising total revenue of $12.33 million and expenses of $10.83 million. The surplus in 2018–19 was due to lower than anticipated operating costs.

As at 30 June 2019, the AOFM was in a sound net worth and liquidity position, with net assets of $24.09 million, represented by assets of $27.65 million and liabilities of $3.56 million.

As at 30 June 2019, the AOFM had unspent appropriations totalling $24.93 million. Unspent appropriations are available to settle liabilities as and when they fall due and for future asset replacements and improvements.

Agency resource statement and resources for outcomes

Table 9: Expenses and resources for Outcome 1

Outcome 1: The advancement of macroeconomic 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

 Budget(a)

 2018-19

 $'000

 Actual Expenses

 2018-19

$'000

 Variation

 

$'000

Program1.1: Australian Office of Financial Management

Departmental expenses

Departmental appropriation and other receipts

10,344

10,098

246

Expenses not requiring appropriation in the
  Budget year

820

732

88

Administered expenses before re-measurements

Expenses not requiring appropriation

774,217

895,566

(121,349)

Special appropriations expenses

   Commonwealth Inscribed Stock Act 1911

17,153,897

17,099,879

54,018

   Financial Agreement Act 1994

8

8

-

Total expenses for program 1.1

17,939,286

18,006,283

(66,997)

 

2018-19

2018-19

 

Average staffing level (number)

40

37

3

(a)  The Budget figure for 2018–19 is the estimated actual 2018–19 expenses, reported in Table 2.1 of the 2019–20 Portfolio Budget Statements.

Table 10: AOFM resource statement

 

 

Actual available 

appropriation 

2018-19

$'000

Payments 

made

2018-19

$'000

Appropriations 

extinguished 

2018-19

$'000

= Balance 

2018-19

$'000

Ordinary annual services

Departmental appropriation(a)(b)

 

36,979

9,419

3,038

24,522

Receipts from other sources (s74)(c)

 

481

 

-

481

Total departmental

 

37,460

9,419

3,038

25,003

Administered expenses

Total administered

 

-

-

-

-

Total ordinary annual services

A

37,460

9,419

3,038

25,003

Other services

Departmental non-operating

 

-

-

-

-

Total other services

B

-

-

-

-

Total available annual appropriations (A+B)

 

37,460

9,419

3,038

  25,003

Special appropriations - operating

Commonwealth Inscribed Stock Act 1911

 

21,462,472

21,462,472

-

-

Financial Agreement Act 1994

 

8

8

-

-

  Subtotal

 

21,462,480

21,462,480

-

-

Special appropriations - investing and financing

Commonwealth Inscribed Stock Act 1911

 

65,565,094

65,565,094

-

-

Public Governance, Performance and

         

  Accountability Act 2013

 

461,350,000

461,350,000

-

-

  Subtotal

 

526,915,094

526,915,094

-

-

Total special appropriations

C

548,377,574

548,377,574

-

-

Total appropriations excluding special accounts (A + B + C)

 

548,415,034

548,386,993

3,038

25,003

Special Accounts

Debt Retirement Reserve Trust Account

 

42

-

-

42

Total Special Account

D

42

-

-

42

Total net resourcing and payments for AOFM

 (A  + B + C + D)

 

548,415,076

548,386,993

3,038

25,045

(a)  Actual available appropriation comprises Appropriation Act (No.1) 2018–19 plus carried forward appropriation balances as at 1 July 2018.

(b)  Includes capital budget appropriation for 2018–19 of $0.710 million.

(c)   Receipts received under section 74 of the PGPA Act.

Grant programs

Under the Financial Agreement Act 1994, the Commonwealth is required to contribute to the Debt Retirement Reserve Trust Account to assist the Northern Territory and State governments to redeem maturing debt on allocation to them. Monies standing to the credit of this Account are held for the purposes prescribed by the Financial Agreement Act 1994.

The contributions made by the Commonwealth are accounted for as grants in the AOFM’s financial statements.

Advertising and market research

The AOFM incurred expenditure of $5,247 in advertising to promote the Australian Government Securities market to investors.

The AOFM incurred expenditure of $14,832 during 2018–19 to media advertising organisations for staff recruitment.

Freedom of information

Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme (IPS). Freedom of information (FOI) matters in respect of the AOFM are handled by the Treasury and all documents disclosed in response to FOI requests (other than personal or business information that would be unreasonable to publish) are published on the FOI Disclosure Log of the Treasury website. The Treasury reports on AOFM’s FOI requests in an annual submission to the Office of the Australian Information Commissioner (OAIC) for inclusion in the OAIC’s annual report. In 2018–19, the AOFM received no FOI requests.

An agency plan showing what information is published in accordance with the IPS requirements, including material relevant to the AOFM, is accessible from the AOFM’s website at https://www.aofm.gov.au/about/access-information/information-publication-scheme

Ecologically sustainable development 

The AOFM’s operations have an impact on the environment typical of office operations generally. Facilities management services are provided to the AOFM by the Treasury under a Memorandum of Understanding, and by Broadspectrum under a whole of Australian Government arrangement administered by the Department of Finance. Broadspectrum are obligated to comply with environmental laws and Commonwealth environmental policies and to report to the Department of Finance regarding their compliance. Information on the environmental impact of the services provided to AOFM by the Treasury is published in the Treasury’s Annual Report.

Management structure of the AOFM’s debt and assets

The assets and liabilities managed by the AOFM and held on its administered balance sheet in 2018–19 were AGS (Treasury Bonds, Treasury Indexed Bonds and Treasury Notes), term deposits placed with the RBA and loans to the States under the various Commonwealth-State Housing Agreements.

For financial and risk management purposes, these assets and liabilities are allocated into different financial portfolios: long-term debt; cash management; and housing advances. This allocation recognises the different objectives, risks and management approaches required in each area.

The long-term debt portfolio includes all AGS, other than Treasury Notes, which are issued for cash management purposes.

The cash management portfolio includes Treasury Notes and assets which are held to manage within-year variability in the Australian Government’s financing requirements. This portfolio is used to fund differences in the timing of Government payments and receipts, as well as providing for contingency liquidity in the event of an unforeseen call on cash requirements separate to planned needs (such as reduced issuance capability during a major market dislocation event).

The housing advances portfolio comprises loans for public housing made to the states and territories. These loans, which were not evidenced by the issue of securities, were made under previous Commonwealth-state financing arrangements. The last of these loans is due to mature on 30 June 2042.

AGS issuance for 2018-19

Table 11: Treasury Bond tender results — 2018–19

Tender date

Coupon and maturity

Face value amount allocated

($m)

Weighted average issue yield

(%)

Spread to secondary market yield

(basis points)

Range of bids accepted

(basis points)

Times 

covered

2-Jul-18

2.25% 21-Nov-2022

300

2.2034

-0.80

0.25

7.68

4-Jul-18

2.75% 21-Nov-2029

800

2.6094

-0.43

0.25

3.46

1-Aug-18

2.75% 21-Nov-2029

1,000

2.7136

-0.39

0.50

2.88

10-Aug-18

2.25% 21-Nov-2022

1,000

2.1839

-0.48

0.50

4.67

13-Aug-18

3.75% 21-Apr-2037

400

2.8670

-0.40

0.50

2.15

15-Aug-18

2.50%21-May-2030

1,000

2.6348

-0.08

0.75

3.18

22-Aug-18

2.25% 21-Nov-2022

1,000

2.1415

-0.45

0.50

4.62

27-Aug-18

2.25% 21-May-2028

500

2.5482

-0.26

0.50

5.14

29-Aug-18

2.75% 21-Nov-2029

1,000

2.6052

-0.06

0.75

2.70

7-Sep-18

2.50%21-May-2030

1,000

2.5859

-0.33

0.50

3.30

10-Sep-18

2.25% 21-Nov-2022

600

2.1168

-0.41

0.50

4.68

12-Sep-18

2.25% 21-May-2028

1,000

2.5890

-0.43

0.50

3.20

24-Sep-18

2.75% 21-Nov-2029

800

2.7220

-0.42

0.75

2.84

26-Sep-18

2.50%21-May-2030

1,500

2.8035

-0.05

1.00

2.47

3-Oct-18

3.25% 21-Apr-2029

500

2.6465

-0.35

0.25

4.97

5-Oct-18

2.25% 21-Nov-2022

500

2.1725

-0.61

0.00

5.90

8-Oct-18

2.75% 21 Nov-2028

500

2.7698

-0.62

0.75

4.94

10-Oct-18

2.50%21-May-2030

1,000

2.7996

-0.41

0.25

3.24

17-Oct-18

2.75% 21-Nov-2029

1,000

2.7298

-0.29

0.25

3.10

22-Oct-18

2.25% 21-Nov-2022

500

2.1921

-0.39

0.25

6.45

24-Oct-18

2.50%21-May-2030

1,000

2.7190

-0.45

0.50

4.04

2-Nov-18

3.25% 21-Apr-2029

1,000

2.6631

-0.24

0.50

3.00

5-Nov-18

3.00% 21-Mar-2047

500

3.2330

0.10

1.25

2.62

7-Nov-18

2.75% 21 Nov-2028

1,000

2.7387

-0.38

0.50

2.99

14-Nov-18

2.75% 21-Nov-2029

1,000

2.7366

-0.34

0.50

3.91

19-Nov-18

3.25% 21-Apr-2029

1,000

2.6596

-0.17

0.50

2.57

21-Nov-18

2.50%21-May-2030

1,000

2.7486

-0.34

0.50

3.31

26-Nov-18

2.75% 21 Nov-2028

600

2.6418

-0.35

0.25

4.66

28-Nov-18

2.25% 21-Nov-2022

1,000

2.1794

-0.45

0.50

4.09

5-Dec-18

2.75% 21-Nov-2029

1,000

2.5399

-0.41

0.75

2.51

10-Dec-18

3.25% 21-Apr-2029

700

2.4121

-0.27

0.25

2.75

12-Dec-18

2.50%21-May-2030

1,000

2.4958

0.21

0.50

2.83

14-Jan-19

2.50%21-May-2030

1,000

2.3296

0.26

0.50

2.93

21-Jan-19

2.75% 21-Apr-2024

700

1.9831

-0.16

0.75

3.77

23-Jan-19

2.75% 21-Nov-2029

900

2.2988

-0.09

0.50

2.70

1-Feb-19

3.75% 21-Apr-2037

400

2.5517

0.79

0.75

2.60

4-Feb-19

2.25% 21-May-2028

400

2.2256

-0.27

0.50

3.16

6-Feb-19

2.50%21-May-2030

900

2.2814

-0.06

0.25

3.13

13-Feb-19

2.75% 21-Nov-2029

900

2.1564

-0.06

0.50

2.98

18-Feb-19

2.75% 21-Jun-2035

400

2.3978

-0.84

1.00

2.44

20-Feb-19

2.50%21-May-2030

900

2.1472

-0.20

0.50

3.39

25-Feb-19

3.25% 21-Jun-2039

400

2.5125

-0.37

0.50

2.66

27-Feb-19

3.25% 21-Apr-2029

500

2.0855

0.13

0.75

4.82

4-Mar-19

5.50% 21-Apr-2023

400

1.7167

-0.52

0.25

6.05

8-Mar-19

2.50%21-May-2030

900

2.0677

-0.20

0.50

3.41

18-Mar-19

3.25% 21-Apr-2029

600

1.9692

-0.26

0.25

4.13

20-Mar-19

2.50%21-May-2030

900

1.9459

-0.16

0.50

3.03

25-Mar-19

2.75% 21-Apr-2024

500

1.4465

-0.52

0.25

5.61

27-Mar-19

2.75% 21-Nov-2029

900

1.8158

-0.04

0.50

2.81

1-Apr-19

5.50% 21-Apr-2023

700

1.4064

-0.27

0.25

3.99

5-Apr-19

2.50%21-May-2030

900

1.9247

-0.16

0.25

3.03

8-Apr-19

2.75% 21-Jun-2035

400

2.1445

-0.20

0.25

3.22

10-Apr-19

2.75% 21-Nov-2029

900

1.8864

-0.11

0.50

2.91

15-Apr-19

2.50%21-May-2030

800

1.9783

-0.02

0.50

3.42

29-Apr-19

3.25% 21-Jun-2039

300

2.2240

1.02

1.00

2.30

1-May-19

2.50%21-May-2030

900

1.8222

-0.18

0.25

3.17

8-May-19

2.75% 21-Nov-2029

900

1.7652

-0.10

0.50

3.52

13-May-19

2.50%21-May-2030

500

1.7478

-0.31

0.50

3.76

15-May-19

2.75% 21-Apr-2024

900

1.3028

-0.49

0.75

2.84

29-May-19

1.50% 21-Jun-2031

3,000

1.6073

 

1.25

3.59

5-Jun-19

2.50%21-May-2030

900

1.5477

-0.12

0.50

2.67

19-Jun-19

1.50% 21-Jun-2031

2,000

1.4307

0.02

0.75

2.43

Average over year to June 2019

-0.23

0.52

3.57

Average over 3 years to June 2019

-0.39

0.57

3.80

Average over 10 years to June 2019

-0.29

0.82

3.62

Table 12: Treasury Bond syndication results — 2018–19

Syndication date

Coupon and maturity

 Face value amount allocated ($m)

Issue yield (%)

Joint Lead Managers

17-Jul-18

2.75%
21-May-2041

3,600

3.090

Commonwealth Bank of Australia, TD Securities, UBS AG Australia Branch and Westpac Institutional Bank

Table 13: Treasury Bond buyback tender results — 2018–19

Tender date

 

Coupon and maturity

 

Face value amount repurchased

($m)

Weighted average accepted yield

(%)

Spread to secondary market yield

(basis points)

Range of offers accepted

(basis points)

Times covered

 

2-Jul-18

2.75% 21-Oct-2019

236

1.9528

0.75

1.25

4.55

 

4.50% 15-Apr-2020

64

1.9806

0.43

0.50

 

13-Aug-18

2.75% 21-Oct-2019

350

1.9624

0.99

0.50

4.83

 

4.50% 15-Apr-2020

50

1.9675

0.87

0.00

 

27-Aug-18

2.75% 21-Oct-2019

325

1.9671

0.71

0.50

3.15

 

4.50% 15-Apr-2020

175

1.9731

0.93

0.50

 

10-Sep-18

2.75% 21-Oct-2019

489

1.9834

0.34

0.75

3.50

 

4.50% 15-Apr-2020

111

1.9936

0.28

0.25

 

24-Sep-18

2.75% 21-Oct-2019

310

1.9857

0.69

1.00

2.46

 

4.50% 15-Apr-2020

490

2.0344

1.31

2.00

 

8-Oct-18

2.75% 21-Oct-2019

400

1.9050

1.34

0.00

4.16

 

1.75% 21-Nov-2020

100

2.0108

0.33

0.25

 

22-Oct-18

2.75% 21-Oct-2019

400

1.9038

0.38

0.25

5.02

 

1.75% 21-Nov-2020

100

2.0281

0.43

0.50

 

5-Nov-18

4.50% 15-Apr-2020

100

1.9954

-0.11

0.75

2.71

 

1.75% 21-Nov-2020

400

2.0436

0.62

0.25

 

19-Nov-18

4.50% 15-Apr-2020

301

2.0150

0.45

0.00

2.75

 

1.75% 21-Nov-2020

699

2.0483

0.70

0.50

 

26-Nov-18

4.50% 15-Apr-2020

550

2.0094

1.09

0.25

4.19

 

1.75% 21-Nov-2020

50

2.0350

-0.05

0.00

 

10-Dec-18

4.50% 15-Apr-2020

305

1.9197

0.74

0.25

4.92

 

1.75% 21-Nov-2020

395

1.9072

0.77

0.50

 

14-Jan-19

4.50% 15-Apr-2020

620

1.8990

2.10

2.00

3.71

 

1.75% 21-Nov-2020

380

1.8750

0.75

0.25

 

21-Jan-19

4.50% 15-Apr-2020

208

1.9134

0.84

0.25

3.64

 

1.75% 21-Nov-2020

492

1.9050

0.75

0.00

 

4-Feb-19

4.50% 15-Apr-2020

140

1.8889

0.02

0.25

3.62

 

1.75% 21-Nov-2020

260

1.8575

0.00

0.00

 

18-Feb-19

4.50% 15-Apr-2020

350

1.7884

1.09

0.50

5.41

 

1.75% 21-Nov-2020

50

1.7813

0.51

0.25

 

4-Mar-19

4.50% 15-Apr-2020

313

1.8012

0.62

1.50

5.52

 

1.75% 21-Nov-2020

87

1.7894

0.70

0.75

 

18-Mar-19

1.75% 21-Nov-2020

485

1.6066

1.21

1.00

3.78

 

5.75% 15-May-2021

115

1.5900

0.55

0.00

 

25-Mar-19

5.75% 15-May-2021

500

1.4617

0.42

0.50

4.31

1-Apr-19

4.50% 15-Apr-2020

650

1.5625

1.33

0.00

4.97

 

5.75% 15-May-2021

50

1.4725

0.75

0.00

 

8-Apr-19

4.50% 15-Apr-2020

850

1.5678

1.41

0.50

3.99

 

5.75% 15-May-2021

50

1.4925

0.99

0.00

 

15-Apr-19

4.50% 15-Apr-2020

334

1.5752

0.52

0.75

2.65

 

5.75% 15-May-2021

466

1.5298

0.66

0.50

 

29-Apr-19

4.50% 15-Apr-2020

50

1.4080

0.40

0.50

5.87

 

1.75% 21-Nov-2020

250

1.3659

0.33

0.50

 

13-May-19

4.50% 15-Apr-2020

50

1.3976

0.56

0.50

4.17

 

1.75% 21-Nov-2020

450

1.3251

0.76

0.50

 

29-May-19

4.50% 15-Apr-2020

50

1.1940

0.90

0.25

4.88

 

1.75% 21-Nov-2020

450

1.1571

1.21

0.50

 

19-Jun-19

4.50% 15-Apr-2020

337

1.1051

0.84

0.50

2.50

 

1.75% 21-Nov-2020

263

1.0294

0.71

0.50

 

Average over year to June 2019

0.71

0.48

4.05

Table 14: Treasury Indexed Bond tender results — 2018–19

Tender date

 

Coupon and maturity

 

Face value amount allocated

($m)

Weighted average issue yield

(%)

Spread to secondary market yield

(basis points)

Range of bidsaccepted

(basis points)

Times covered

 

10-Jul-18

1.25% 21-Aug-2040

150

0.9086

-1.75

2.75

3.45

14-Aug-18

0.75% 21-Nov-2027

150

0.7099

-3.01

1.75

4.38

28-Aug-18

1.25% 21-Feb-2022

150

0.3481

-4.11

1.25

5.00

9-Oct-18

0.75% 21-Nov-2027

150

0.8078

-0.49

1.25

4.97

13-Nov-18

1.25% 21-Feb-2022

150

0.4793

-2.08

0.50

4.53

27-Nov-18

0.75% 21-Nov-2027

150

0.8033

-1.04

3.00

3.45

12-Feb-19

1.25% 21-Feb-2022

150

0.2366

0.09

2.25

3.53

26-Feb-19

0.75% 21-Nov-2027

100

0.5083

-0.98

0.50

4.74

12-Mar-19

3.00% 20-Sep-2025

100

0.3898

-0.81

0.25

7.71

26-Mar-19

0.75% 21-Nov-2027

150

0.2700

-1.12

0.00

3.70

9-Apr-19

2.50% 20-Sep-2030

150

0.3300

-2.75

0.00

5.31

14-May-19

3.00% 20-Sep-2025

150

0.0924

-1.23

1.50

4.30

31-May-19

0.75% 21-Nov-2027

150

-0.0645

-1.20

1.25

4.53

11-Jun-19

1.25% 21-Feb-2022

150

-0.1899

-0.27

1.75

3.47

25-Jun-19

3.00% 20-Sep-2025

150

-0.2597

0.25

1.75

2.89

Average over year to June 2019

-1.37

1.32

4.40

Average over 3 years to June 2019

-1.15

1.57

3.66

Table 15: Treasury Indexed Bond syndication results — 2018–19

Syndication date

 

Coupon and maturity

 

Face value amount allocated

($m)

Issue yield

(%)

Joint Lead Managers

 

18-Sep-18

1.00%
21-Feb-2050

3,750

1.1600

Bank of America Merrill Lynch, Citi, Deutsche Bank AG Sydney Branch,
UBS AG Australia Branch and
Westpac Institutional Bank

Table 16: Treasury Note tender results — 2018–19

Tender date

 

Maturity

 

Face value amount allocated

($m)

Weighted average issue yield

(%)

Spread to OIS

(basis points)

Range of bids accepted

(basis points)

Times covered

 

5-Jul-18

12-Oct-18

           500

1.8511

35.08

7.0

4.02

19-Jul-18

12-Oct-18

           500

1.9708

47.08

4.0

4.88

2-Aug-18

12-Oct-18

           500

1.9438

44.38

3.0

4.80

16-Aug-18

12-Oct-18

           500

1.9073

40.73

2.0

4.26

23-Aug-18

7-Dec-18

           500

1.9167

41.67

5.0

4.60

6-Sep-18

7-Dec-18

           500

1.9140

41.40

5.0

6.00

20-Sep-18

7-Dec-18

           500

1.9092

40.92

1.0

4.47

4-Oct-18

7-Dec-18

           500

1.8620

36.20

1.0

5.72

11-Oct-18

22-Feb-19

           500

1.8343

33.25

6.0

5.59

25-Oct-18

22-Feb-19

           500

1.8129

31.29

5.0

5.00

8-Nov-18

22-Feb-19

           500

1.8530

35.30

7.0

4.51

22-Nov-18

22-Feb-19

           500

1.9299

42.99

8.0

2.82

6-Dec-18

12-Apr-19

           500

1.8632

36.32

8.0

4.89

20-Dec-18

12-Apr-19

           500

1.8600

36.06

15.0

4.10

17-Jan-19

12-Apr-19

           500

1.9603

46.23

14.0

3.65

31-Jan-19

12-Apr-19

           500

2.0115

51.46

7.0

3.78

14-Feb-19

12-Apr-19

           500

1.9478

45.25

8.0

4.34

21-Feb-19

21-Jun-19

           500

1.8983

41.74

7.0

5.32

7-Mar-19

21-Jun-19

           500

1.8082

34.51

8.0

5.14

21-Mar-19

21-Jun-19

           500

1.7291

26.96

8.0

4.42

4-Apr-19

21-Jun-19

           500

1.7135

25.43

7.0

4.34

11-Apr-19

23-Aug-19

           500

1.6865

26.93

7.0

5.10

2-May-19

23-Aug-19

           500

1.5634

26.40

4.0

4.84

16-May-19

23-Aug-19

           500

1.5549

20.08

10.0

3.92

30-May-19

23-Aug-19

           500

1.4094

21.42

13.0

4.41

13-Jun-19

23-Aug-19

           500

1.3498

15.34

1.0

4.63

20-Jun-19

25-Oct-19

           500

1.1914

13.49

5.0

4.98

Average over year to June 2019 

34.74

6.5

4.61

Average over 3 years to June 2019

23.45

6.1

4.06

Remuneration

Table 17: Remuneration

Key Management Personnel

   

Short-term benefits

Post-employment

Other long-term benefits

Termination benefits

 
   

Base salary and annual leave

Bonuses

Other benefits

Superannuation

Long service leave

Other

Termination benefits

Total

Name

Position

$’000

$’000

$’000

$’000

$’000

$’000

$’000

$’000

Rob Nicholl

CEO

394,494

   

 51,065

9,599

   

455,158

The CEO’s remuneration conditions are established by the Secretary to the Treasury. AOFM does not have any SES staff other than Key Management Personell.

 

Highly Paid Staff

   

Short-term benefits

Post-employment

Other long-term benefits

Termination benefits

 

Remuneration Band

Number

Average base salary and annual leave

$’000

Average bonuses

$’000

Average other benefits

$’000

Average superannuation

$’000

Average long service leave

$’000

Average other

$’000

Average termination benefits

$’000

Average total

220,000 — 245,000

1

185,698

   

26,157

13,574

   

225,429

245,000 -270,000

2

225,634

   

34,806

8,089

   

268,529

270,000 — 295,000

4

233,623

   

43,140

8,152

   

284,915

295,000 — 320,000

0

             

345,000 — 370,000

1

304,334

   

56,931

10,056

   

371,321

Remuneration for Other Highly Paid Staff is established by the AOFM’s Enterprise Bargaining Agreement