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Investor Handout December 2014

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2 Australian Government Securities 1 of 12 AAA (stable) sovereigns as rated by S&P 1 of 9 AAA (stable) sovereigns as rated by Fitch, Moodys and S&P 1 of 4 S&P AAA (stable) sovereigns with bond markets over USD 250b Australian Government Credit AAA ~ Stable Aaa ~ Stable Source: Bloomberg, Fitch, Moodys, S&P Last affirmed: 24 March 2014 Last affirmed: 25 June 2014 Last affirmed: 28 July 2014

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Major Economic Parameters MYEFO 2014-15 Source: Treasury MYEFO 2014-15 3

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4 Growth in real GDP Annual growth rate Source: Australian Bureau of Statistics, Treasury MYEFO 2014-15

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5 A diversified economic base Gross Value Added by Industry Source: Australian Bureau of Statistics

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6 Contributions to GDP growth Note: Business Investment and Public Expenditure have been adjusted for second-hand asset sales between the public sector and private sector Source: Australian Bureau of Statistics, Treasury MYEFO 2014-15 Where Australia has been Economic growth primarily driven by household consumption and business investment. Resource and mining infrastructure is being built during this period and net exports are a detractor from growth. Where Australia is going Economic growth will continue to be aided by household consumption (a long standing feature of the Australian economy), but now net exports as opposed to business investment also feature. Resource projects are coming online and the export stage is expected to add significantly to growth over the coming years. 2002-03 to 2013-14 2014-15 to 2017-18 (forecast)

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7 Contributors to growth in Business Investment Source: Treasury Consistent with CAPEX data, the outlook for Business Investment in 2014-15 remains subdued, with growth likely again to be below trend. However, there are some positive signs including a rise in approvals for non-residential building over 2013. Non-resources investment is forecast to pick up in 2015-16 as firms start to respond to improving demand and existing levels of spare capacity are absorbed, with GDP growth returning towards trend.

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8 Terms of Trade Source: Australian Bureau of Statistics, Treasury MYEFO 2014-15

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9 Labour market Annual data for year ending 30 June Source: Australian Bureau of Statistics, Treasury MYEFO 2014-15

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Headline & underlying inflation Source: Australian Bureau of Statistics, Treasury MYEFO 2014-15 10

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International interest in ACGBs Source: Australian Office of Financial Management, Australian Bureau of Statistics 11

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What drives the change in non-resident holdings Source: Australian Bureau of Statistics, Reserve Bank of Australia, Australian Office of Financial Management 12

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13 Australias Budget Balance Source: Treasury MYEFO 2014-15

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14 Australias Net Debt Position Source: Treasury MYEFO 2014-15

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15 20 lines currently on offer 10 lines with more than AUD 15 billion on issue Maturities from 2015 to 2037 7 lines currently on offer Maturities from 2015 to 2035 Australian Government Securities Source: Australian Office of Financial Management 3 lines currently on offer Maturities typically less than 6 months

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Source: Australian Office of Financial Management, Australian Bureau of Statistics, Treasury MYEFO 2014-15 Australian Government Bonds on issue 16

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17 Treasury Bonds 20 lines on issue, 10 of which have more than AUD 15 billion outstanding Source: Australian Office of Financial Management

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18 Treasury Indexed Bonds Amount shown is the face value unadjusted for changes in the CPI adjusted capital value of the bond Source: Australian Office of Financial Management Note: On 2 May 2014, the AOFM conducted a conversion tender that offered an opportunity to holders of the August 2015 TIB to convert their holdings into the November 2018 TIB line. The outcome of which saw AUD 2.03893 billion face value converted from the August 2015 line into the November 2018 line and thereby reducing the volume on issue of the August 2015 to AUD 1.156839 billion.

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19 Market Makers Treasury Bonds 18 major international and domestic institutions willing to make markets in Treasury Bonds

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20 Market Makers Treasury Indexed Bonds 10 major international and domestic institutions willing to make markets in Treasury Indexed Bonds