Ms. Anna Hughes | Chief Executive Officer
Thank you for the opportunity to make an opening statement.
Since last Senate Estimates, the Australian Office of Financial Management (AOFM) has continued to focus on its core purposes: issuing debt securities on behalf of the Australian Government, managing cash and debt portfolios, and implementing initiatives in the Australian securitisation market.
Market conditions
Geopolitical tensions in the Middle East continue to contribute to energy price volatility and inflation uncertainty. Sovereign bond markets remain functional, with yields elevated and occasionally volatile. Central bank policy expectations remain a key market driver of global sovereign bond yields amid persistent inflation risks.
Despite the prevailing volatility, the Australian Commonwealth Government Bond (ACGB) market has remained functional, deep and liquid. The depth and liquidity of the ACGB market together with Australia’s modest debt levels and smaller deficits relative to global peers remains appealing to investors. Tenders across all three AOFM funding instruments – Treasury Bonds, Treasury Indexed Bonds and Treasury Notes – have proceeded smoothly, supported by consistently solid demand from market participants. 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 the progress of our issuance plans for the 2026–27 financial year.
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).
In August 2026, the AOFM completed a $13 billion syndication of a 5.00 per cent Treasury Bond maturing in May 2038 with an orderbook of $62 billion.
As of 28 October 2026, the level of Australian Government Securities (AGS) on issue is $995.9 billion. This is comprised of $900.1 billion in Treasury Bonds, $41.8 billion in Treasury Indexed Bonds and $54 billion in Treasury Notes. The AOFM continues to deliver a resilient, flexible and scalable issuance program. The AOFM maintains transparency through regular market announcements.
Independent review
As noted at the last Senate Estimates, the Independent Review released on 24 April 2026, confirmed that the AOFM is performing its core functions effectively, and that Australia’s sovereign debt management program is highly regarded by market participants, meets the Commonwealth’s financing needs and is administered in a cost-effective way. The Treasury and AOFM agreed to the six recommendations identified by the review. As at October 2026 the AOFM and Treasury have fully implemented four of the six recommendations and are well progressed on the remaining two.
Our people
The AOFM has a stable, engaged and capable workforce that can continue delivering our core purposes.
I’m pleased to share that 100% of AOFM staff participated in the 2026 APS Employee Census, providing confidence that our workforce is engaged and willing to speak up and that the results we achieved accurately reflect the views of our workforce.
Our census results improved across all reported indices and exceeded the APS average on every measure. Results improved from 2025 in 96% of questions, demonstrating that focused efforts have translated into positive improvements in leadership, communication and overall organisational culture.
The AOFM is currently formulating our Action Plan which will focus on sustaining the agency’s positive momentum, build on its strengths and address areas identified for further improvement. The plan is set to be released in November 2026.
Alongside these results, our workforce is stable, with the staff turnover rate in 2025–26 being 16 per cent, below the AOFM’s five-year average of 22 per cent.
Thank you for the opportunity to provide you with this opening statement and I welcome your questions.
