Statement 7:
Asset and Liability Management
(Continued)
Future of the bond market
The Government is committed to ensuring the effective operation of Australia's financial markets. The existence of an active and efficient bond market alongside the banking system strengthens the robustness of Australia's financial system and reduces its vulnerability to adverse shocks. The Government maintains an efficient and liquid CGS market that supports the three‑year and ten‑year Treasury Bond futures markets.
In 2008 the Treasurer directed the AOFM to increase the amount of CGS on issue, in response to market demand for Australian Government Treasury Bonds in the wake of the global financial crisis. The additional issuance assisted the Treasury Bond futures market to continue to operate in an efficient and effective manner.
As part of its debt management strategy, the AOFM launched a 2025 Treasury Indexed Bond in 2009‑10 and new Treasury Bond lines that mature in 2012, 2013 and 2022 respectively. The term‑to‑maturity of Treasury Bonds currently extends out to 12 years and that of Treasury Indexed Bonds to 15 years.
The volume and maturity structure of bond issuance will continue to be set to meet the Government's financing task and portfolio management needs. In the longer term, the Government will aim to maintain a liquid CGS market to provide a sound foundation for Australia's financial system.
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