Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

We have been advised by the Office of Financial Management that we should have a buffer, notwithstanding the fact that at the end of each year we are within that cap. I know those opposite do not understand a lot about financial markets, so we will just run through a couple of the facts. First and foremost, in terms of Commonwealth revenues, they tend to come in in lumps and they tend to come in particularly towards the end of the year. What actually happens is that expenditure is evenly spread across the year. So we have an in-year financing challenge which is made worse by the fact that we have maturing bond lines and as they are maturing we are issuing new ones. That can mean we do go over the cap on a temporary basis but we stay within it at the end of the year. The point that the OFM has made is this, and I will quote from their memo: 'To manage these fluctuations in an efficient and effective manner it is critical that the debt management operations of the AOFM are not affected by short-term borrowing constraints such as a debt cap or a similar mechanism.' We reported in full in the budget papers what we were intending to do and why we were intending to do it. It is very sensible for Australia and I think that those opposite should just pause for a minute and not play politics with this issue.

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