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At 30 June 2002, net foreign debt of the public sector was $12.1b (4% of total net foreign debt) and net foreign debt of the private sector was $317.6b (96% of total net foreign debt). Much of the public sector debt consists of domestically issued government securities in which non-residents choose to invest. At 30 June 2002, non-residents held $24.4b in domestically issued Australian government securities. Over the period 1996-97 to 2001-02 net foreign debt of the public sector has fallen (from $65.2b at 30 June 1997 to $12.1b at 30 June 2002). Conversely net foreign debt of the private sector has more than doubled (from $143.4b to $317.6b).
Australia's net foreign debt includes debt incurred by both the private and public sectors.
Net public sector debt is the gross debt of Commonwealth, State and Local governments (general government) and government business enterprises (including financial corporations) less reserve assets and other foreign debt assets held by these resident entities.
Statistics on the composition of foreign debt are used to analyse the nature of Australia's foreign debt. For example, having debt concentrated in the private sector is considered by many as more desirable than having it issued by the public sector, since it is assumed that the private sector is more likely to borrow to finance investment rather than consumption. However, a comprehensive analysis of the financial position of the two sectors should also consider their domestic assets and liabilities as well as those with non-residents.
The composition of foreign debt may also be examined by industry, country, currency and maturity structure.