$56bn needed in 2010/11

The face value of Treasury Bonds on issue at 30 June 2010 is projected to be around $125 billion.

The Australian government said it expects to sell around $56 billion in Treasury bonds during the 2010/11 year to cover the expected budget deficit of $41 billion, repayment of maturing bonds and incidental management of liabilities.

A token number of Treasury bonds sold may be branded as Aussie Infrastructure Bonds and linked to the funding needs of the government-owned company building a new broadband network. Most of these bonds - which the budget paper suggests will be around $300 million - will still be sold to institutional investors.

The budget papers show that Treasury estimates the level of net debt in 2010/11 at $78.5 billion, which is $33.7 billion lower than estimated in the 2009/10 Budget.

Net debt is now expected to peak at 6.1 per cent of GDP in 2011/12 and decline to around $90.8 billion (and around 5.5 per cent of GDP) in 2013/14.