Part 5: Other Information

Agency financial performance

The AOFM recorded an operating surplus on agency activities of $0.86 million for the 2017–18 financial year, comprising total revenue of $11.57 million and expenses of $10.71 million. The surplus in 2017–18 was due to lower than anticipated operating costs.

As at 30 June 2018, the AOFM was in a sound net worth and liquidity position, with net assets of $24.92 million, represented by assets of $27.87 million and liabilities of $2.95 million.

As at 30 June 2018, the AOFM had unspent appropriations totalling $24.47 million of which $0.07 million was held in cash. 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 1: Expenses and resources for Outcome 1

Table 2: AOFM resource statement

Grant programs

Under the Financial Agreement Act 1994, the Commonwealth is required to contribute to the Debt Retirement Reserve Trust Account to assist the state and Northern Territory 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

During 2017–18, the AOFM incurred expenditure of $13,200 for research into the wholesale financial market in Australia.

The AOFM incurred expenditure of $12,732 in advertising to promote the Australian Government Securities market to investors.

The AOFM incurred expenditure of $4,656 during 2017–18 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 2017–18, 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 Treasury’s website at www.treasury.gov.au.

Ecologically sustainable development

The AOFM’s operations have an impact on the environment typical of office operations generally. Procurement and facilities management services are provided to the AOFM by the Treasury under a memorandum of understanding. Information on the environmental impact of these services 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 2017–18 were AGS (Treasury Bonds, Treasury Indexed Bonds and Treasury Notes), term deposits placed with the RBA, RMBS and housing advances to the states under the various Commonwealth-State Housing Agreements.

For financial and risk management purposes, these assets and liabilities are allocated between four financial portfolios: long-term debt, cash management, RMBS, 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. It contains debt denominated in Australian dollars and in foreign currencies. No borrowings have been undertaken in foreign currencies since 1987.

The cash management portfolio is used to manage within-year variability in the Australian Government’s financing requirement due to differences in the timing of Government payments and receipts. It is also used to provide 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). It contains all the assets and liabilities not held in the other three portfolios.

The RMBS portfolio contains residential mortgage-backed securities purchased through a Government investment program that was operational during 2008-09 to 2012-13. The AOFM completed the divestment process for RMBS in February 2018.

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 2017–18

Table 3: Treasury Bond tender results — 2017–18

Table 4: Treasury Bond syndication results — 2017–18

Table 6: Treasury Indexed Bond tender results — 2017–18

Table 5: Treasury Bond buyback tender results — 2017–18

Table 7: Treasury Indexed Bond syndication results — 2017–18

Table 8: Treasury Note tender results — 2017–18