ABSTRACT
The possibility of issuing indexed securities has received considerable attention in the 1970s and 1980s. In 1981 the Campbell Committee recommended that ‘both “variable rate” and “inflation linked” government securities should be viewed as ongoing policy options and should be introduced in appropriate market circumstances’ (Australian Financial System Inquiry, 1981, p. 193). Until very recently the Australian Government had not issued indexed securities. In December 1983 it was announced that a small offering of indexed securities was to be made through the tender system. These bonds were to offer an indexed interest rate, but the real rate was to be determined in the tender. The objective of offering these bonds was to provide insurance companies and superannuation funds with assets they could use as a backing for indexed annuities. The government wanted to encourage the issue of these annuities to reduce criticism of their decision to increase the tax on lump-sum superannuation payments. This tender had not taken place up to the time of writing.
