Explainer · Bonds
A bond is a loan with a published price for waiting
The yield is not a vibe. It is the return you lock in if you buy the paper today and hold it to the date on the tin.
What you are actually buying
A government bond is a loan to the Treasury. You hand over money now. You receive coupons on a schedule and the face value back on a date. Australian Government Securities are that loan in Australian dollars, issued by the AOFM.
The coupon is fixed when the bond is born. The price is not. After issue the paper trades. If the price falls, the yield to maturity rises. They are the same seesaw.
Yield, cash rate, and your mortgage are not one number
The cash rate is overnight money between banks. A ten-year yield is the market's price for lending to the Commonwealth until 2036. Your mortgage is a retail contract on top of wholesale funding, credit risk and a bank's margin.
They move together often enough that television treats them as twins. They are cousins. A rate hold can sit next to a rising ten-year yield if the world has decided inflation or supply of paper has changed.
The bill versus the stock
The interest the budget pays this year is a cash bill. The face value on issue is a stock. Mixing them produces those "we spend more on interest than on schools" lines that skip the denominator and the term structure.
If you want the household comparison, put the interest bill next to a tax the public already understands, or put the stock next to GDP. Do not put a flow next to a stock and call it a race.