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Coalition to cut public bond issues

Andrew Robb.

Andrew Robb. Photo: Domino Postiglione

THE Coalition will ask investors to prepare for a world with far fewer government bonds in an address in Melbourne on Wednesday, saying as it acts on its promise to cut net government debt to zero there will be a ''commensurate reduction in the issuance of government bonds''.

In their place it will commit itself to develop a retail market in corporate bonds to rival the sharemarket, saying it makes ''no sense'' for investors to have easy access to equity yet almost none to lower-risk corporate bonds.

''In March 2009 Tabcorp issued a five-year retail senior bond, the first vanilla retail bond since Telecom Bonds in the 1980s and 1990s,'' finance spokesman Andrew Robb will tell the Melbourne University economics faculty.

''Since then there have been less than five large, quality issues.

''The Coalition understands that until there is a comparable market, government has not fulfilled its role. And, once there is, government should allow the market to function,'' Mr Robb will say.

''In dollar terms, Commonwealth government securities were our second biggest export in 2011-12, at $58 billion,'' Mr Robb will say.

''Our determination to start paying off Commonwealth net debt will see a commensurate reduction in the issuance of government bonds.''

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