Arthur Sinodinos (NSW, Liberal Party) Share this | Link to this | Hansard source

asked the Minister representing the Treasurer, upon notice, on 19 April 2012:

Given that, according to data from the Australian Office of Financial Management (AOFM), the total value of currently issued Commonwealth Government Securities (CGS) as of March 2012 was $237.4 billion, and noting that the Guarantee of State and Territory Borrowing Appropriation Act 2009 does not provide the AOFM with the power to compel security holders, custodians and nominees to provide the AOFM with information on the beneficial ownership of securities, can the following information be provided detailed in both gross and percentage terms:

(1) On what proportion of the $237.4 billion issued CGS does information exist regarding beneficial ownership.

(2) Of the $237.4 billion issued CGS, where information has been provided to the AOFM regarding beneficial ownership as of 31 March 2012:

(a) how much issued CGS is held by governments, central bank authorities, companies, trusts and other private organisations and individuals;

(b) which countries are those enjoying beneficial ownership officially registered in, detailing the amount of issued CGS per country;

(c) do any governments (either national or provincial) have beneficial ownership of issued CGS; if so: (i) which governments and how much issued CGS do they have beneficial ownership over, and (ii) what is the average length of time of ownership of issued CGS;

(d) for those private organisations that enjoy beneficial ownership of issued CGS, which industries do these organisations belong to, including a breakdown by: (i) industry, (ii) country, and (iii) both industry and country, indicating in each case the amount of issued CGS;

(e) for those individuals who enjoy beneficial ownership of issued CGS, which countries do these individuals reside in, indicating the amount of issued CGS per country;

(f) does the Reserve Bank of Australia or any foreign central bank own any issued CGS; if so: (i) how much, indicated per central bank institution; and (ii) what is the average length of time of ownership of issued CGS; and

(g) does the Future Fund own any issued CGS; if so, how much.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

The information available to AOFM does not directly identify the ultimate beneficial owner or their country of domicile or industry. The AOFM attempts, where possible, to reasonably infer the beneficial owner and country of domicile from an account name.

The AOFM has been provided with permission to use this information by its owner, the Australian Securities Exchange (who operate Austraclear), on the proviso that this use is consistent with the operating rules of Austraclear which prevent them publishing information that would identify individual holders or holdings.

(1) AOFM has information on the beneficial ownership, or has formed an opinion on the beneficial ownership of $91.1 billion or 38.4 per cent of issued CGS. The remainder of holdings are mostly in the hands of entities, typically nominee or custodial firms, for which the AOFM has insufficient information to identify the country of domicile of the beneficial owner.

(2) (a) Where the AOFM has identified or formed an opinion on beneficial ownership around $1.1 billion is held by governments, $53.7 billion is held by central banks, $35.9 billion held by corporations and $0.4 billion would mainly be in the hands of trusts, other private organisations or individuals.

(b) Where the AOFM has identified or formed an opinion regarding beneficial ownership, it has found it across 23 different countries. Information on the holdings by country beyond that already available on the AOFM website cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.

(c) (i) Where the AOFM has identified or formed an opinion regarding beneficial ownership it has identified $1.1 billion of issued CGS as held by governments. This figure represents the holdings by Australian State government financing authorities and public trustees. No foreign government holdings are identified. Information on the holdings by individual governments cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.    (ii) It is unclear how the average length of time of ownership referred to in the question would be calculated.

(d) (i) Where the AOFM has identified or formed an opinion regarding beneficial ownership it has identified $35.9 billion of issued CGS as held by corporations. Information on the holdings by private organisations by industry cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM. (ii)    Information on the holdings by private organisations by country cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.    (iii) Information on the holdings by private organisations by both industry and country cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.

(e) Most issued CGS is held in the professional wholesale market, through Austraclear and this data does not identify holdings by individuals (they are all organisations). A comparatively small amount of issued CGS of $352 million is held in the domestic RBA registry while $5 million is a US dollar loan issued in the United States held on offshore registries. The AOFM has formed an opinion for the purposes of compiling the register, for these aggregate amounts that the domestic register consists primarily of individual accounts for Australian residents, while the US loan is primarily held by individual accounts of US residents.

(f) (i) Where the AOFM has identified or formed an opinion regarding beneficial ownership it has identified $53.7 billion of issued CGS as held by central bank authorities.

Information on the holdings by individual central bank authorities cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.

The Reserve Bank of Australia publishes information on the liabilities and assets on their balance sheet including their holdings of Australian Government securities in the Reserve Bank Bulletin and on their website. Published Reserve Bank data indicates they held around $10.2 billion of issued CGS as at end March 2012.

(ii) Information on the holdings by individual central bank authorities cannot be provided because of the risk of revealing the identity of individual bond holders in contravention of the conditions of use of the data provided to AOFM.

The published Reserve Bank of Australia monthly data on their holdings of issued CGS indicates that they held CGS continuously at least back to July 1969 although the level has fluctuated significantly over time. It is unclear how the average length of time of ownership referred to in the question would be calculated.

(g) The Future Fund is not separately identified in the data available to AOFM as it operates through other asset managers. The Department of Finance and Deregulation has advised, however, that as at 19 April 2012, the Future Fund held no issued CGS, while the Building Australia Fund, Education Investment Fund and Health and Hospital Funds each held around $265 million, $175 million and $144 million respectively.