Australia's Debt Ceiling

[StefanA]

I agree Weg. The only vision Rudd had was to tell the UN and China how to run their businesses, fueled by money from the developed world. The only vision he had for Australia was to increase Australia's population by 50%, and water security by 0%. He stopped the Wolfdene Dam and the Traveston Dam in Qld. The guy was an uncouth ear wax eating egomaniac.

The guy is a complete imbecile when it comes to understanding national wealth creation....and Gillard is 10x worse. Both of them had ample opportunity to improve infrastructure, and they totally screwed it, and spent the surplus on plasmas, insulation, and tuckshops.

What vision!!!!

And Turnbull doesn't know whether he is Arthur or Martha. Earned his money way too easily, so will never relate to the rest of us. Hence his soft Socialist slant.

 

[Fairsjk]

Agreed....

Keating handed them a 96 Billion debt in 1996.

They handed Rudd no debt and 22 Billion in the Bank.

That's a 118 Billion improvement over 11 Budget years.

Take the 60 Billion asset sales away, and they still managed to run the books with 58 Billion in surplus over 11 years. Average of 5 Billion per year in the Black.


What has Labor done ;

Howard handed Rudd no debt and 22 Billion in the Bank.

Gillard and Swan now have nothing in the Bank and a 107 Billion debt and flying south at a great rate of knots.

That's a 129 Billion schmozzle over 4 Budget years.

Average of 32 Billion per year in the Red.


I dunno....most people can understand those figures. You tell me, which one is better for the nation ??


All these lovely social handouts....sounds good....but where do they come from. In 2007 when the Liberals were still in power, that surplus was creating over 1 Billion in interest. Now, 4 years later, Labor are paying upwards of 7 or 8 Billion in interest payments to offshore Banks. That's 7 or 8 Billion that cannot be spent on Australia.


There is no comparison. It's night and day.

Dazz you must have been listening to the Barnaby Joyce school of economics. The guy who because he has an accounting degree thinks that somehow makes him an economist. Dazz you are not comparing apples with apples here. If you are going to talk about debts that relate to the government you talk about what is the budget deficit or surplus, which is around $50billion. Barnaby makes same point knowing most Australians like you are not bright enough to know what debt he is talking about. OK so you probably will say $50b is still a lot of money, how could the government spend/waste that much money. Well there are actually two sides to a budget, maybe news to you. The main reason for the budget blowout is attributable to the massive decline in receipts due to the GFC. It's funny when you do a google search for government debt that 9 out of 10 searches come from the News Limited press. All sprouting the same doom and gloom that you do.

 

[Fairsjk]

I don't think so Dan.

After over 11 years of a steady experienced hand on the wheel, with a fantastic deputy who actually understood economics, the team in late 2007 handed over a set of numbers with zero nett debt and over 20 Billion in cash socked away. A debt to GDP ratio of -4%. Unheard of fantastic position....and the reason why Australia saled thru the GFC unscathed....not because of Labor's 'good spending management'.

The inexperienced Labor unionists got in there and said "woohoo let's party"....which they have. They know how to strike and talk the talk, but they simply have no training or experience in managing the books...have a look at our Treasurer - I wouldn't let him run 10% of my portfolio....he'd stuff it up royally.

Labor have completely eliminated the 20 Billion surplus, spent the lot in the first 6 months, and over the 4 years they've been in power have proceeded to rack up over 107 Billion in debts. That's by far and away, the most rapid decline into debt, even worse than what Keating did in 94 and 95 if that's possible.

We are headed to 250 Billion in debt with these economic children in charge with a green emotional bully smackin' them round the park.

The Aussie population is seeing this and not impressed....especially all of the folk who understand what debt can do, and are watching around the world how it tears nations apart.

Have no doubt, immigration and the carbon tax will assist in booting out the Labor and Greens, but I reckon the # 1 reason people will boot them out come the next election will be that once again Labor have proven to be incapable of economic management of the country's finances.

When you start at -4%, and in four short years you mismanage the economy to rack up debt of 26% of GDP, that's a - 30% effort.....poor in anyone's language. Not as bad as some country's, but with our mineral resources and opportunities aplenty, that is a very poor result.

Ah Daz no, as I said the government has not racked up that debt at all. The debt is not 26% of GDP you fool. Not even Labor could spend that much. If you are going to compare Australia's debt to the rest of the world you are making yourself look even sillier. As I said in my last post, the major reason for the decline in the budget position and I just checked the figures was a $75b decline in receipts in 6 months. If you want to enlighten yourself in learning about debt check this article from Ross Gittens from last year. http://www.smh.com.au/opinion/polit...say-were-drowning-in-debt-20100727-10u6r.html

And here is another article that explains the difference between the debts and compares our debt (public net debt) like the one you like to quote and other countries.


http://parliamentflagpost.blogspot.com/2011/04/australias-current-debt-position.html

 

[tcocaro]

Australias debt versus any comparable nation aside from (norway from memory) is pittance.

Another thing I find strange is that assumably good business minded people like Dazz feel the country should abide by some bizar 0 debt or as close to mentality despite not applying the same logic to their own investment approach.

When one wishes to buy a house do they work, save and then pay the whole amount in cash or borrow some plucked out of the sky low figure like 20%? No they borrow 90%.

Why should a country be any different? The issue is never the level of debt but rather what the money was spent on.

In this country we are so pre-occupied with imaginary numbers, goals and concepts like spending is bad and saving is good as opposed to listening to reason or any form of logic.

Ah Daz no, as I said the government has not racked up that debt at all. The debt is not 26% of GDP you fool. Not even Labor could spend that much. If you are going to compare Australia's debt to the rest of the world you are making yourself look even sillier. As I said in my last post, the major reason for the decline in the budget position and I just checked the figures was a $75b decline in receipts in 6 months. If you want to enlighten yourself in learning about debt check this article from Ross Gittens from last year. http://www.smh.com.au/opinion/polit...say-were-drowning-in-debt-20100727-10u6r.html

 

[VYBerlinaV8]

Australias debt versus any comparable nation aside from (norway from memory) is pittance.

Another thing I find strange is that assumably good business minded people like Dazz feel the country should abide by some bizar 0 debt or as close to mentality despite not applying the same logic to their own investment approach.

When one wishes to buy a house do they work, save and then pay the whole amount in cash or borrow some plucked out of the sky low figure like 20%? No they borrow 90%.

Why should a country be any different? The issue is never the level of debt but rather what the money was spent on.

In this country we are so pre-occupied with imaginary numbers, goals and concepts like spending is bad and saving is good as opposed to listening to reason or any form of logic.

Like your example, the borrowed money should be spent on things that generate and/ore increase value. If the government was borrowing for major infrastructure, that was being developed thoughtfully and at the right prices, I don't think anyone would have a problem with that.

 

[Dazz]

Another thing I find strange is that assumably good business minded people like Dazz feel the country should abide by some bizar 0 debt or as close to mentality despite not applying the same logic to their own investment approach.

When one wishes to buy a house do they work, save and then pay the whole amount in cash or borrow some plucked out of the sky low figure like 20%? No they borrow 90%.

Why should a country be any different?

I've written about that many times....buying a house and being a passive residential Landlord has absolutely no bearing whatsoever when compared with economically managing an entire country's affairs.


Trying to simplify the complexities of running a nation down to passively investing in one house is non-sensical. Anyone who tries to draw a parallel between buying one house and running a nation is, IMO, not looking at the scenario in a reasonable way.


The answer to your "why" question could go on for 100 pages.

 

[Dazz]

Fairsjk,

Yes I'm a fool, happy to wear that badge.

Yes I look sillier than anyone you care to mention, happy to wear that badge too.

Happy to wear any badge you wish to throw at me....I'll add your two labels to the collection.

Thanks for your input....much appreciated.

 

[lizzie]

When one wishes to buy a house do they work, save and then pay the whole amount in cash or borrow some plucked out of the sky low figure like 20%? No they borrow 90%.

Which would be fine ... but the current government is borrowing to the equivilent of buying LCD TV's and other doodads that will provide no future income, no capital gains and no improvement in the economy of Australia.

 

[Fairsjk]

Which would be fine ... but the current government is borrowing to the equivilent of buying LCD TV's and other doodads that will provide no future income, no capital gains and no improvement in the economy of Australia.

Umm, I think the NBN stands some chance in improving the economy and I would say money spent on improving our ports might just improve our export trade. Stop listening to Alan Jones and reading the News Is Limited papers and you might see a different world out there.

 

[StefanA]

Umm, I think the NBN stands some chance in improving the economy and I would say money spent on improving our ports might just improve our export trade. Stop listening to Alan Jones and reading the News Is Limited papers and you might see a different world out there.

..an NBN led recovery....

I eagerly anticipate hearing about all your experience growing small to medium enterprises, to backup that brilliant piece of commercial insight.

 

[evand]

While i'm not advocating that the country runs up debt, business and investing is built on debt. Whether one house or multi million dollar capital expenditure.

As an aside, i think Australia's debt is ~2% of DDP, whereas Us & Europe and some of Asia is anywhere from 50% to over 100%. Makes you wonder why so much bandwidth is wasted on this stuff.

I've written about that many times....buying a house and being a passive residential Landlord has absolutely no bearing whatsoever when compared with economically managing an entire country's affairs.


Trying to simplify the complexities of running a nation down to passively investing in one house is non-sensical. Anyone who tries to draw a parallel between buying one house and running a nation is, IMO, not looking at the scenario in a reasonable way.


The answer to your "why" question could go on for 100 pages.

 

[Fairsjk]

..an NBN led recovery....

I eagerly anticipate hearing about all your experience growing small to medium enterprises, to backup that brilliant piece of commercial insight.

I did not say it would lead a recovery, I merely stated that the government was indeed spending money that would boost productivity, if you were in a small to medium enterprise in a rural town you might understand that point. I have to admit to getting sick and tired of people who are so quick to bag the NBN.

 

[weg]

While i'm not advocating that the country runs up debt, business and investing is built on debt. Whether one house or multi million dollar capital expenditure.

As an aside, i think Australia's debt is ~2% of DDP, whereas Us & Europe and some of Asia is anywhere from 50% to over 100%. Makes you wonder why so much bandwidth is wasted on this stuff.

This is where one needs to be able to differentiate evand - creating debt and 'business and investing is built on debt'.

Any half decent business minds would look into what benefits their investing has and what returns it produces. Are you suggesting Labor do this?

The NBN and all other other half cocked ideas have totally ignored this princliple.

There's been no detailed cost-benefit analysis published by Treasury on why the NBN is the best possible use of up to $43 billion of taxpayer's cash.

There has been no independent Productivity Commission Inquiry determining the amount of money that the nation should use to subsidise high-speed broadband, and whether comparable technology could be supplied to taxpayers via the private sector.

The facts are the benefits are so uncertain and difficult to quantify, and the opportunity costs of spending this money so great, that once you discount the potential returns you would find that its awfully hard to justify spending $43 billion, and that's assuming the figure remains at that.

So you see this isn't a left - right thing at all. It's about how this government justifies what it does. To most of us they look like incompetent and immature public servants, and it scares us.

 

[evand]

Maybe similar to the Liberal govt bending over for Dubya and sending troops to the Middle East. Disregarding loss of lives, and it being based on a total lie, i dont recall the govt asking us about a cost-benefit analysis. How much was our cost? And what was the benefit?

In 10-20 years if this country doesnt have a an infrastructure for data that is world best or even better. Well.....i'll leave the conjecture to you.

Have you heard of Moores Law?

This is where one needs to be able to differentiate evand - creating debt and 'business and investing is built on debt'.

Any half decent business minds would look into what benefits their investing has and what returns it produces. Are you suggesting Labor do this?

The NBN and all other other half cocked ideas have totally ignored this princliple.

There's been no detailed cost-benefit analysis published by Treasury on why the NBN is the best possible use of up to $43 billion of taxpayer's cash.

There has been no independent Productivity Commission Inquiry determining the amount of money that the nation should use to subsidise high-speed broadband, and whether comparable technology could be supplied to taxpayers via the private sector.

The facts are the benefits are so uncertain and difficult to quantify, and the opportunity costs of spending this money so great, that once you discount the potential returns you would find that its awfully hard to justify spending $43 billion, and that's assuming the figure remains at that.

So you see this isn't a left - right thing at all. It's about how this government justifies what it does. To most of us they look like incompetent and immature public servants, and it scares us.

 

[weg]

Maybe similar to the Liberal govt bending over for Dubya and sending troops to the Middle East. Disregarding loss of lives, and it being based on a total lie, i dont recall the govt asking us about a cost-benefit analysis. How much was our cost? And what was the benefit?

In 10-20 years if this country doesnt have a an infrastructure for data that is world best or even better. Well.....i'll leave the conjecture to you.

Have you heard of Moores Law?

Evand, the issue that affects Australians NOW is what Labor are doing. Leave the spin to the pollies please.

So I take it you think a cost benefit analysis of a project of that size and cost is not necessary?

If the product is so groundbreaking and needs to be built at whatever cost then Labor would not have dodged a cost benefit analysis. They would have done that AND stood on the roof tops sprouting it's benefits.

 

[lizzie]

Umm, I think the NBN stands some chance in improving the economy and I would say money spent on improving our ports might just improve our export trade. Stop listening to Alan Jones and reading the News Is Limited papers and you might see a different world out there.

Never listened to Alan Jones and don't read any papers except the local Saturday paper for local news.

The NBN will be obsolete by the time it is built thru private development and improvements. Telstra is already planning on bringing out 4G, which the government is trying to limit as it is expected to take at least 30% of potential NBN customers away from the NBN networkd - before it is even built!

What ports are they improving? All the improvement I have seen is via private enterprise. And are they improving the infrustructure to get the goods too and from the ports are the same time? No point in having you beaut ports if they bottleneck at the gates.

 

[TomW]

Fairsjk,

Yes I'm a fool, happy to wear that badge.

Yes I look sillier than anyone you care to mention, happy to wear that badge too.

Happy to wear any badge you wish to throw at me....I'll add your two labels to the collection.

Thanks for your input....much appreciated.

In other words you are taking your ball and going home.

 

[StefanA]

I did not say it would lead a recovery, I merely stated that the government was indeed spending money that would boost productivity, if you were in a small to medium enterprise in a rural town you might understand that point. I have to admit to getting sick and tired of people who are so quick to bag the NBN.

If you appreciated small to medium enterprises are not conducted from residential properties, then you'd understand why FTTH NBN deserves the bagging.

 

[Fairsjk]

Never listened to Alan Jones and don't read any papers except the local Saturday paper for local news.

The NBN will be obsolete by the time it is built thru private development and improvements. Telstra is already planning on bringing out 4G, which the government is trying to limit as it is expected to take at least 30% of potential NBN customers away from the NBN networkd - before it is even built!

What ports are they improving? All the improvement I have seen is via private enterprise. And are they improving the infrustructure to get the goods too and from the ports are the same time? No point in having you beaut ports if they bottleneck at the gates.

Private development, you have to be kidding Lizzie. Telstra has done squat all over the last decade. Australia will never get internet to the speed that can take us anywhere if you leave it to the commercial sector. And as for 4G being the answer, well on the whirlpool forum there are a trillion posts on that debate but wireless will never be anything more than complementary to fibre. And as for the cost benefit analysis I wish they had done one so it would shut everyone up on this issue.

 

[Fairsjk]

If you appreciated small to medium enterprises are not conducted from residential properties, then you'd understand why FTTH NBN deserves the bagging.

All of this has been debated and talked about when the Rudd government proposed FTTN and it was one of those things that if you are going to spend that much money you should go all the way because it won't save you that much more money and it would need upgrading down the track anyway. Look I understand everyone having doubts about Labor delivering on this but remember its not Labor building it it is a private consortium. Anyway this is getting off track a bit.

P.S Oh and it is not $43b it is $27b and spread over 5 or 6 years. Personally I think it will be the best money any government will ever spend, but I understand it takes a bit of faith to say that.