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2. 2 Presentation to “Mine to Mill” Research Trip Alex Beavers Queensland Treasury

3. 3 Treasury/QTC Operating Model Queensland Treasury’s role is to:  Provide core economic and fiscal advice to the State Government of Queensland  Assist Government with the management of its finances  Prepare an annual State Budget  Collect and administer State revenue  Conduct economic and statistical research QTC’s role is to:  Source and manage the debt funding for the State in the most cost effective manner  Provide financial risk management advice  Invest the State’s short to medium-term cash  surpluses to maximise returns to clients

4. 4 Economic growth comparison 1 (annual % change) 1 CVM, 2008-09 reference year. 2010-11 is estimated actual. 2011-12 to 2012-13 are forecasts. 2013-14 to 2014-15 are projections. Sources: Queensland Treasury, Australian Treasury and ABS 5206.0. Despite natural disasters in 2010-11, growth to surge beyond trend in 2011-12 and 2012-13…

5. 5 1 CVM, 2008-09 reference year. 2010-11 is estimated actual. 2011-12 to 2012-13 are forecasts. 2013-14 to 2014-15 are projections. Sources: Queensland Treasury, Australian Treasury and ABS 5206.0. Contributions to growth in Queensland’s gross state product 1

6. 6 1 CVM, 2008-09 reference year. 2010-11 is estimated actual. 2011-12 to 2012-13 are forecasts. Sources: Queensland Treasury and ABS 5206.0. Business investment and exports to drive recovery… Business investment and exports 1 ($ billion, original year-average)

7. 7 Driven largely by major projects…

8. 8 Responding to stronger demand from our major trading partners Sources: International Monetary Fund, Consensus Economics and Queensland Treasury. Major trading partner growth (annual % change)

9. 9 State’s Role and Strategy State is a facilitator, not a funder of these projects. These projects are declared “significant” which allows for coordinated and streamlined assessments and approvals. Private sector delivers and/or funds bulk of associated infrastructure requirements. Consistent with Queensland asset sales program strategy.

10. 10 Source: Queensland Treasury. Lower capital spend and borrowings each year

11. QTC Borrowing Program 2011-12 Investor Presentation, July 2011 Richard Jackson: General Manager, Funding and Markets

12. 12 QTC – Operational framework Queensland Treasury’s role is to:  Provide core economic and fiscal advice to the State Government of Queensland  Assist Government with the management of its finances  Prepare an annual State Budget  Collect and administer State revenue  Conduct economic and statistical research QTC’s role is to:  Source and manage the debt funding for the State in the most cost effective manner  Provide financial risk management advice  Invest the State’s short to medium-term cash surpluses to maximise returns to clients

13. 13 Queensland’s state infrastructure spending

14. 14 Funding Sources, (as at 30 June 2011) By investor location By facility * Includes Euro CP (2%), Euro MTN (1%), AUD CIB (1%), Other Domestic (Public, private( (1%), USCP (1%)) AUD Benchmark Bonds 59% AUD AGG Global Bonds 3% CP* 6% AUD T-Notes 4% AUD AGG Domestic Bonds 28%

15. 15 Strength of Credit  Full Queensland State Government Guarantee (AA+/Aa1)  Australian Government Support – 50% of revenue sourced from Australian Government – Australian Govt guarantee (AAA/Aaa) during crisis – Disaster Support  Fund Queensland public sector capital works – ‘Government to Government’

16. 16 Strength of Product  Focus on AUD benchmark bonds – Significant volumes on issue – Choice of maturity

17. 17 AUD Benchmark bond outstandings Australian Government Issuers (as at 30 June 2011) Source: UBS Composite Bond Index plus Semi-Government global / exchangeable bonds

18. 18 QTC AUD Benchmark bonds Outstandings by maturity as at 30 June 2011 * * * * * * * Issued 2010-11

19. 19 QTC AUD AGG Bonds Outstandings by maturity as at 30 June 2011

20. 20 Strength of Product  Focus on AUD benchmark bonds – Significant volumes on issue – Choice of maturity  Dedicated primary & secondary market dealer panel

21. 21 Strength of Product  Focus on AUD benchmark bonds – Significant volumes on issue – Choice of maturity  Dedicated primary & secondary market dealer panel  Attractive yield pickup

22. 22 Spread to Australian Government Bonds (as at 30 June 2011)

23. 23 Borrowing Program 2011-12 *Based on the State Budget 2010-11 Mid-Year Economic and Fiscal Update released on 28 January 2011. 1. Commercial paper outstanding as at 30 June 2011. 2. Funding activity may vary depending upon actual client requirements, the State’s fiscal position and financial market conditions. Borrowing details 2011-12 Estimate A$M 2010-11 Mid-year Update * A$M New borrowings: Capital works and asset procurement 14,100 3,600 Funding in advance of client borrowings (2,300) (800) Total new borrowing11,800 2,800 Refinancing of maturing debt: Term debt 5,500 8,200 Commercial paper 1 4,700 4,000 Total refinancing10,200 12,200 TOTAL BORROWING PROGRAM 2 22,000 15,000

24. 24 Key Points  Central Financing Authority for the State of Qld – ‘Government to Government’ – Aa1/ AA+  Large Benchmark Bond Lines – Fixed Interest Distribution Group (17) – Favourable yield pick up

25. 25 Key Points  2011-12 Borrowing Program – AUD 22 billion – Including 2017 and 2019 new benchmarks

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