Anna Hughes, Chief Executive Officer
Thank you for the opportunity to make an opening statement.
Over the past six months, the Australian Office of Financial Management (AOFM) has continued to focus on its core responsibilities: issuing debt securities on behalf of the Australian Government, managing cash and debt portfolios, and implementing initiatives in the Australian securitisation market.
This continued focus on the AOFM’s core functions was recognised in the Independent Review of the AOFM, which noted the agency is effectively meeting the Commonwealth’s financing needs and are delivering a highly respected debt management program in a cost-effective manner. The Review also recognised the AOFM’s focus on strengthening its capability to execute the debt program, including through cross-skilling across the agency so staff can support tender operations and syndications. In addition, the Review acknowledged that this approach broadens the appeal of roles across the agency more broadly, supporting staff retention.
The Review acknowledged that the introduction of the Deputy Chief Executive Officer and the Chief Operations Officer roles is grounded in sound logic and the capabilities and structure of the AOFM’s operational functions are appropriate. We note that this structure is relatively new and expect that further benefits will emerge over time.
The AOFM supports the directions set out by the Review. As an agency that prides itself on continuous improvement, we will use the identified opportunities to improve our operations.
We acknowledge the recommendation to strengthen organisational capability during periods of heightened financial stress and to ensure appropriate challenge. In response, we are considering all options as part of our Strategic Workforce Plan. The Plan will focus on managing key person risk and enhancing organisational capability, workforce sustainability and succession planning while also addressing the organisation’s need for technical skills and contextual knowledge.
Implementation of the Review’s recommendations are already underway. Alongside the development of the Strategic Workforce Plan, the AOFM will continue to work closely with Treasury and the AOFM Advisory Board to ensure our governance arrangements, organisational capability and operational settings remain fit for purpose.
Market Conditions
In early 2026, the crisis in the Middle East caused the closure of the Strait of Hormuz. The resulting supply chain shock has elevated inflation worldwide and that persists today. Globally, central banks have generally shifted from an easing bias to being either on hold or adopting a tightening stance.
Despite the prevailing volatility, the Australian Commonwealth Government Bond (ACGB) market has remained functional, deep and liquid. Tenders across all three AOFM funding instruments – Treasury bonds, Treasury Indexed Bonds and Treasury Notes – have proceeded smoothly, supported by consistently solid demand from intermediaries. Coverage ratios and tender spreads to mid-market levels have remained strong.
Issuance update
I would also like to provide the committee with an update on this financial year’s issuance and our plans for the 2026–27 financial year.
For 2025-26, we started the year expecting to issue around $150 billion of Treasury Bonds (including Green Treasury Bonds). Due to better-than-expected Budget outcomes this was revised down to around $125 billion at the Mid-Year Economic and Fiscal Outlook and subsequently to around $120 billion in the recent Budget. Treasury Indexed Bond issuance will be around $3 billion.
Three syndications were undertaken:
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In July 2025, we conducted a $16 billion syndication of a 4.25 per cent Treasury Bond maturing in October 2036 with an orderbook of $62 billion.
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In January 2026, we completed a $15 billion syndication of a 4.75 per cent Treasury Bond maturing in October 2037 with an orderbook of $67 billion, the second largest on record.
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In May 2026, we completed a $7.5 billion syndication of a 5.00 per cent Green Treasury Bond maturing in June 2036, with an order book of $24 billion, the largest green syndication on record, and exceeding that of the inaugural Green Treasury Bond.
As of 5 June 2026, the level of Australian Government Securities (AGS) on issue is $975.3 billion. This is comprised of $891.6 billion in Treasury Bonds, $40.6 billion in Treasury Indexed Bonds and $43 billion in Treasury Notes. AGS issuance for the 2025–26 financial year includes $116.7 billion in Treasury Bonds (with $78.2 billion issued by tender and $38.5 billion through syndication) and $2.8 billion in Treasury Indexed Bonds issued by tender. The AOFM continues to deliver a resilient and scalable issuance program. There is flexibility within the program to adjust issuance, for example in times of higher than forecast tax receipts. The AOFM maintains transparency through regular market announcements.
For 2026-27, based on Budget forecasts, issuance of Treasury Bonds (including Green Treasury Bonds) is expected to be around $125 billion. Issuance of Treasury Indexed Bonds by tender is expected to be between $2 billion and $3 billion (additional issuance by syndication may be considered).
Organisational Culture
The AOFM has continued to focus on strengthening organisational culture, capability and staff engagement over the past year. This has included implementing the actions identified through the 2025 APS Employee Census process, including:
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Learning and development is tailored to an individual’s career goals
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Encouraging innovation and decisions backed by data
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Ensuring our people remain aligned with our agency’s purpose and objectives and remain committed to making a difference by sharing ideas and going the extra mile to deliver results.
We look forward to the results from the 2026 Census later this year.
AOFM has finalised its Integrity Framework and delivered staff awareness activities to support understanding of what integrity looks like in practice. An internal audit review was also undertaken to assess the design of the framework and further strengthen governance and assurance processes. The internal audit review concluded that the framework is well-founded and fit for purpose, given the agency’s size, complexity and risk profile. It also identified strong operational discipline across the areas reviewed, with no integrity failures or material non-compliance with AOFM policy requirements. Additionally, no Public Interest Disclosure reports have been made regarding the AOFM during 2025-26.
We are also pleased to report that staff turnover in 2025–26 is expected to be around 16 per cent, below the AOFM’s five-year average of 22 per cent.
Overall, the AOFM’s staffing profile has stabilised. Current headcount is 45 staff, with active recruitment underway for one vacant position.
Thank you for the opportunity to provide you with this opening statement and I welcome your questions.
