Australia's Budget Strategy: A Pre-Election Financial Balancing Act

The Australian government is set to borrow more than previously indicated in the 2024/25 financial year, aiming to sell A$100 billion of Treasury bonds. This move comes as several cost-of-living relief measures are announced in the federal budget ahead of a closely contested national election.

The Australian government has unveiled plans to borrow more than initially expected during the 2024/25 financial year, according to its debt management agency. This decision follows the announcement of numerous cost-of-living relief measures in the federal budget, strategically positioned ahead of an impending national election.

The Australian Office of Financial Management (AOFM) disclosed its intention to sell A$100 billion ($63 billion) in Treasury bonds by June 2025. Previously, the AOFM anticipated borrowing around A$95 billion for this fiscal year. Additionally, the AOFM plans to issue approximately A$3 billion in Treasury Indexed Bonds and continue regular Treasury Note issuances for cash management.

The centre-left government, seeking to regain voter confidence, has introduced tax cuts, electricity rebates, and student debt reductions. These initiatives have tipped the budget into a projected deficit of A$27.6 billion ($17.4 billion) by June 2025. The economy has seen rare surpluses over the past two years, but opinion polls suggest a tightly contested election with the opposition narrowly leading.

(With inputs from agencies.)