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|Date (30 June)||Gross debt|
|Source: Reserve Bank of Australia|
The Australian government debt is the amount owed by the Australian federal government. The Australian Office of Financial Management, which is part of the Treasury Portfolio, is the agency which manages the government debt and does all the borrowing on behalf of the Australian government. Australian government debt consists of Commonwealth Government Securities (CGS)—treasury bonds, treasury indexed bonds, treasury notes and Aussie infrastructure bonds—the combined value of which was limited by s.5 of the Commonwealth Inscribed Stock Act 1911, until December 2013, when that section of the Act was repealed.
Australia's bond credit rating is rated AAA by all three major ratings agencies. The current ratio of Australian government debt to gross domestic product (GDP) is compared favourably to the average ratio for developed countries of 90%. The very low levels of debt have permitted flexibility on behalf of the Australian federal government to use expansionary fiscal policy at their discretion to counter the effects of the financial crisis of 2007–2008.
In October 2012, Justin Fabo, ANZ's senior economist, said there was little good reason why the government should not take advantage of historically low yields on government securities to fill Australia's infrastructure gap. In recent years Australian government debt has seen an increase in demand as faith is lost in European and US government debt. Reserve managers see Australia as a safe haven for investment.
In May 2012, Federal Treasurer Wayne Swan released the 2011–12 Mid-Year Economic and Fiscal Outlook (MYEFO). In 2011–12, the Australian Government general government sector recorded an underlying cash deficit of $43.7 billion (3.0% of GDP). The fiscal balance was in deficit by $44.5 billion (3.0% of GDP).
Australian Government general government sector net debt was $164 billion (11.133% of GDP), which was $16.7 billion higher than estimated at the time of the 2012 Australian federal budget. The change was primarily driven by the higher‑than‑expected market value of Commonwealth Government Securities (CGS), owing to lower than expected yields. Australian Government general government sector net financial worth was -$358.3 billion at the end of 2011‑12. Net worth was $247.2 billion at the end of 2011–12.
Total Australian Government revenue was $338.1 billion in 2011–12, $1.7 billion higher than estimated in the 2012–13 Budget. Accrual taxation revenue was $316.8 billion in 2011–12, $325 million above the estimate in the 2012–13 Budget, which is in line with the variation in cash receipts.
Total non-tax revenue was $21.3 billion in 2011–12, $1.4 billion higher than estimated in the 2012–13 Budget. Non-tax receipts (excluding Future Fund earnings) were $17.3 billion, in line with estimates in the Budget. The largest component of the difference in outcomes between non-tax revenue and non-tax receipts (excluding Future Fund earnings) is the change in the accounting recognition of dividends from:
The Reserve Bank of Australia, a $500 million dividend has been recognised in 2011–12 instead of 2012–13, based on advice from the Australian National Audit Office; and The Australian Reinsurance Pool Corporation, reflecting a change to the timing of accrual revenue at Budget, with the full amount of $400 million being recorded in 2011–12 instead of over the forward estimates.
Australian law formerly imposed a debt ceiling on how much the federal government could borrow. The debt ceiling was created in 2007 for itself by the Rudd Government and set at $75 billion. It was increased in 2009 to $200 billion, $250 billion in 2011 and $300 billion in May 2012. In November 2013, Treasurer Joe Hockey requested Parliament's approval for an increase in the debt limit from $300 billion to $500 billion, saying that the limit will be exhausted by mid-December 2013. With the support of the Australian Greens, the Abbott Government repealed the debt ceiling despite the opposition of the Australian Labor Party in December 2013.
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