At least, that is what the Treasury's budget statement says.
The Treasury compiles a measure of public sector net worth. It adds up what the government owns - buildings, land, capital equipment, cash, assets, foreign reserves etc - and then subtracts what it owes. Currently, the government's balance sheet is positive - it owns 28 percent of GDP more than it owes. By 2014, it will be in the red.
When an institution owes more than it owns, it is bankrupt.