FINANCIAL MARKET PRESENTATION

9 JULY 2002

Introduction

Budget statements

Funding instruments

Portfolio risk management

Headline Cash Balance

- 10

- 5

0

5

10

15

20

25

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

$ billion

Net Debt & Net Interest

“The reduction in net debt will continue to be managed in line with the objective of maintaining the viability of the Commonwealth Government Securities (CGS) market”.

“The reduction in Commonwealth net debt has raised questions by some market participants about the future viability of the CGS market. The Government acknowledges these concerns and is carefully considering them, taking the views of key stakeholders into account”.

Treasury Bond Tenders

13 August 2002

15 October 2002

10 December 2002

Conversion Tenders

Continuing with conversions

No objective to eliminate October 2007

Subject to market demand

Possibility of other stocks

Feedback welcomed

Repurchases

February 2006 at fair value– details to be announced

Non-benchmark securities– 5 basis points above

Rebateable securities– 10 basis points below

Treasury Indexed Bonds

22-Aug-02 5021-Nov-02 5020-Feb-03 5022-May-03 50

Tender dateAmount to be offered ($m)

Treasury Notes

Significant within year funding requirement

Issue as required, noting cash levels at RBA

Expect to issue late August 2002 to February 2003

Interest Rate Swaps Program for this financial year

under review

Public announcement following review

FX Exposure Mid-2000 factors driving fx

share of debt portfolio

December 2000 - Treasurer suspended fx benchmark

June 2001 - Treasurer agreed no fx exposure

Orderly rundown of fx exposure over the medium/long term

Corporate Governance

Commitment to provide further updates