Australia's Treasury may resume selling inflation-linked bonds,
The Australian reported.
The motive for reintroducing a long-term bond, with a suggested term of between 20 and 25 years, may be to breathe fresh life into the market for retirement annuities rather than as an optimum borrowing option for the government, which is looking at a budget deficit equal to around two per cent of GDP this year and probably for several years to come.
The proposed reintroduction of inflation-linked bonds will form one aspect of the recommendations of the Treasury review into tax arrangements that the government plans to publish next month as part of its annual budget, according to the newspaper.
There are about $6 billion of Treasury indexed bonds outstanding, according to the Australian Office of Financial Management, equal to about nine per cent of the (fast accumulating) stock of Commonwealth government debt.