Background
The Government's strong fiscal management since 1996 has significantly reduced Australian Government general government sector net debt. Net debt has fallen from a peak of 19.1 per cent of gross domestic product (GDP) or around $96 billion in 1995-96 to an estimated 1.9 per cent of GDP or around $16.3 billion in 2004-05.
Reductions in gross debt outstanding have accompanied the fall in net debt. This is reflected principally in declining Commonwealth Government Securities (CGS) on issue. In particular, Treasury bonds on issue have fallen from around 15 per cent of GDP in 1995-96 to an expected 5 per cent of GDP in 2004-05.
Chart 1: Australian Government general government
sector net debt
and Treasury bonds on issue(a)
- Treasury bonds on issue are net of Australian Government holdings and debt on issue for the states and territories.
Source: Australian Bureau of Statistics Cat. No. 5513.0, Australian Government Final Budget Outcomes, Australian Office of Financial Management, and Treasury estimates.
In line with the public review of the CGS market in 2002-03 the Government will continue to issue debt, despite a strong fiscal position, in order to maintain a liquid and efficient Treasury bond and Treasury bond futures market. The strategy remains focused on moving towards an issuance pattern that results in around $5 billion in each bond line with a new long and a mid-term bond being issued in alternate years. This will see maturities exceed issuance in some years as the issuance strategy moves towards its long-term steady state.