Debt Management in a Low Debt Environment: The Australian Government's Debt Management Framework

Blair Comley and David Turvey
Additional contact information
Blair Comley: Treasury, Government of Australia
David Turvey: Treasury, Government of Australia

No 2005-02, Treasury Working Papers from The Treasury, Australian Government

Abstract: The Australian Government's very low level of government debt sets the context for Australia's debt management policy. Australia's debt management policy seeks to achieve two objectives: supporting financial market efficiency; and achieving an appropriate balance of cost and risk for the Government. To achieve these two objectives the Government uses two instruments: physical bond issuance and financial derivatives (primarily interest rate swaps). Use of these two instruments allows the two targets to be independently managed. Financial market efficiency requires the issuance of sufficient Treasury bonds to support the Treasury bond futures market. Given this profile of physical issuance, the Government enters into interest rate swaps to achieve an appropriate balance between costs and risks. Given the low level of debt in Australia, particular attention is given to catering for short term cash management trends and the specific issues raised by indexed debt.

Keywords: Debt management; government bonds; financial market efficiency; Australian Office of Financial Management; AOFM; portfolio management (search for similar items in EconPapers)
JEL-codes: G18 H63 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2005-02, Revised 2005-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://archive.treasury.gov.au/documents/957/PDF/T ... 0paper%202005-02.pdf First version, 2005 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tsy:wpaper:wpaper_tsy_wp_2005_2

Access Statistics for this paper

More papers in Treasury Working Papers from The Treasury, Australian Government Contact information at EDIRC.
Bibliographic data for series maintained by The Treasury (Commonwealth of Australia) ().