A scarcity of government bonds will be a problem for Australia's banking industry, if projections outlined in last night's budget come to pass.The end-of-year face value of Australian Government Securities on issue is expected to be around A$560 billion in 2019/20, increasing to around $569 billion in 2022/23, Treasury said in the budget papers.The total AGS on issue will decline to $416.8 billion "by the end of the medium term in 2029/30."Government bonds are the cornerstone of liquid assets holding for banks, with the Reserve Bank supplying a "committed liquidity facility" as backstop for some years now.The budget paper makes clear that "at times when AGS issuance is not required to finance the Government's activities, successive Governments have continued to issue AGS for policy purposes such as to maintain a liquid AGS market."In particular, the Government will focus on ensuring a market of sufficient size to maintain liquidity across the longer yield curve and to support the Treasury Bond futures market and other important benchmarks."?