FINANCIAL MARKET PRESENTATION 9 JULY 2002

Introduction Budget statements Funding instruments Portfolio risk management

Headline Cash Balance

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 October 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

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 Treasurer suspended fx benchmark June Treasurer agreed no fx exposure Orderly rundown of fx exposure over the medium/long term

Corporate Governance

Commitment to provide further updates