Treasury
Purchase of residential mortgage-backed securities
| 2007‑08 | 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | |
|---|---|---|---|---|---|
| Australian Office of Financial Management | - | - | - | - | - |
| Related revenue ($m) | |||||
| Australian Office of Financial Management | - | * | * | * | * |
The Government will invest a total of $8.0 billion in Australian residential mortgage-backed securities which will be financed from cash deposits held by Australian Office of Financial Management. This initiative will assist liquidity in the residential mortgage-backed securities market and support competition in mortgage lending in Australia. The securities purchased through this initiative will be held until market conditions normalise.
Residential mortgage backed securities purchased under this initiative are treated as financial assets and therefore do not impact on the fiscal balance. Interest earned on the securities is offset by interest forgone from the deposits used to finance the securities' purchase. The difference in interest earnings will result in a variation in non-taxation revenues which is accounted for in the budget estimates.
The administrative costs of this measure will be met from within existing resourcing of the Australian Office of Financial Management.
Further information can be found in the press releases of 26 September 2008 issued by the Treasurer and 12 October 2008 issued by the Prime Minister.
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