Borrowing for 2019/20
In our role as the State’s central borrowing authority, WATC is responsible for raising funds on behalf of the Western Australian public sector.
Estimated Borrowing Program for 2019/20
Continuing improvements in Western Australia’s fiscal position, due to stronger commodity prices, GST flows and ongoing expenditure control, resulted in the new money requirement for 2018/19 (as forecast in the 2018/19 Budget) falling from $2.7 billion to a small net reduction of approximately $0.5 billion.
The new money program for 2019/20, currently estimated at $1.1 billion, may also reduce, reflecting a continuation of improved revenues and subdued expenditure growth. Additionally, the funding requirement for 2019/20 may also be impacted by the proceeds generated from any assets sales or commercialisations.
The sourcing of WATC’s funding is subject to conditions in the various markets and the market mix during the year may be amended as necessary to meet WATC’s pricing, liquidity, lending and capital usage targets.
|Term Funding Requirement||$b||$b|
|New Money Program (est.)||1.1|
|Less Prefunded FRN maturity||-0.3|
|+/- Changes to HQLA portfolio||0.2||6.3|
|Total Term Funding Requirement||7.4|
Borrowing Strategy for 2019/20
In order to meet the State’s funding and debt management requirements for 2019/20, WATC plans to:
In addition, WATC will continue to:
- maintaining sufficient volumes on issue to retain benchmark bond status
- support these securities in the market
- issue through our Fixed Interest Market Making Panel, by tender, private placement or syndication
Budget for 2019/20
Based on the borrowing program, debt outstanding and investments, WATC is forecasting the following 2019/20 internal budget.
|Interest on Investments||61.5|
|Interest from Authorities||1,654.4|
|Interest on Borrowings||1,661.5|
|Borrowing Related Expenses||4.2|
|Profit before Income Tax Equivalent||31.5|
|Income Tax Equivalent Expense||9.5|
|Profit for the Period||22.0|