The truth about govt. debt

More Facts Behind the Howard Government’s Debt Elimination

From: http://www.marketeconomics.com.au/2095-more-facts-behind-the-howard-governments-debt-elimination

"Australia’s net Government debt was $96 billion in June 1996. By June 2007, Australia had net financial assets (negative debt) of $29 billion. The Howard Government and the current Liberal Party point to this turn in the finances of the Government with pride and say it is a sign of good economic management.

To be sure, this is a significant turnaround but there are some interesting facts behind the issue of Government debt in the past 30 or so years.

The first point to note is that the $96 billion of debt inherited by the Howard Government from the Labor Party in 1996 comprised around $39.9 billion of debt accumulated by the Fraser Government under the Treasury-ship of Mr Howard and left to the Hawke Government in 1983! See Table 3 of Budget Paper 10 for more details.

As I discussed a while back, http://alturl.com/4o973 , when the Coalition talks of the $96 billion of Labor debt that it inherited, recall that just under half of it was in fact Liberal Party debt that was a hangover from the Fraser era.

That slightly embarrassing issue aside, let’s look at how else the Howard Government “got rid” of that debt.

Asset sales loom large in that discussion. The list of government assets sold by the Howard government is here: http://alturl.com/bjhqk . This table shows the asset, the time of sale and the price.

To get an accurate indication of the true dollar impact on debt of those asset sales, I have converted them into June 2007 dollar terms. Take the sale of DASFLEET, for example, which was sold for $408 million in July 1997. In June 2007 terms, this was worth $536.8 million. Or perhaps the first tranche of Telstra is interesting. Sold for $17.2 billion in November 1997, that converts to $22.6 billion in June 2007 terms.

The value of all asset sales under the Howard Government totalled a very hefty $71.8 billion in June 2007 dollar terms. This means that around three-quarters of the pay-down of the $96 billion of government debt was simply from selling assets to the private sector. Nothing more, nothing less.

To summarise the above facts:

The $96 billion “Labor debt” inherited by the Howard Government in 1996 comprised $39.9 billion of Fraser Government debt that carried through the Hawke/Keating period meaning that the true level of Labor debt in 1996 was $56 billion.

To pay that $56 billion off, the Howard Government sold almost $72 billion of Government assets meaning the move to negative net debt was not really due to any miraculous and bold fiscal settings, but owed everything to a series of asset sales."





Undeniable proof below.

http://www.finance.gov.au/property/asset-sales/past-sales.html




This is all beside Costello selling 167 tonnes of our gold reserve in 1999 at a paltry $300 per ounce. Costing Australia $6b+ in funds and turning our currency into a NON GOLD backed fiat currency!!!

The great Liberal economic management is a myth. Nothing more. No different to the lies Abbott is being exposed for right now.



And as further proof to the Liberal mindset still existing today, Costello is still going on about selling govt. assets.

http://www.brisbanetimes.com.au/queensland/sell-more-assets-costello-recommends-20120615-20e3f.html
 
The value of all asset sales under the Howard Government totalled a very hefty $71.8 billion in June 2007 dollar terms. This means that around three-quarters of the pay-down of the $96 billion of government debt was simply from selling assets to the private sector. Nothing more, nothing less.
And no doubt those assets are a whole lot better managed now, benefitting the whole community.
 
What are we talking about now?

There was $96B in debt that Howard paid down and then some.

When the Libs were voted out there was a nice healthy positive balance.

How's that looking now?

I'm looking forward to the fudge job by treasury to get the budget into the black this year.
 
Last edited:
The point is guys (or maybe i could call it another inconvenient truth) is that the Labor govt firstly inherited $46b debt from the previous Liberal govt. This raraely mentioned.

And secondly that the following Liberal govt likes to push the story that they balanced the budget (repaid the total debt) with good economic management. They didnt, they just sold govt. assets to repay the debt.

I could do that myself if i had debt. Its a very easy way to retire debt.
 
Benefiting private companies bottom line more like it.

And there is nothing to say privately held assets are better managed then govt. ones.

If thats a reason to sell God help us. But it isnt.

Remember, governments world wide went along way to stabilising the economy in the GFC by nationalising big banks. That means putting them back in govt. control.

And no doubt those assets are a whole lot better managed now, benefitting the whole community.
 
because they sold off the farm.
But did they need the farm?

So paying about $6B pa in interest alone is reason enough to leave things the same?

Add that into the equation over the Howard years and we'd be about another $90B in the red and going back faster to the tune of about $16B in interest alone, compared to about $10B now.

How much could be done with that $10B/$16B????? Much more than nothing.
 
It would be interesting to find out how much debt the Frazer government inheritted and then the Whitlam government before them, and so on...

That the Howard goverment sold assets is fairly well known. Kennet did the same in Victoria also leaving a debt free legacy. The problem that both had was when it came to their loosing elections, neither really stood up and said, "We've made some tough decisions and sacrifices, but we're out of debit and the economy is healthy. Now here's what we're going to do with it."

I recall one of Kenets adds said something like, "He's a snappy dresser". Both ran very sloppy campains which they both lost, when they both had so much potential to deliver a strong message.

The real disaster is that the Costello 'surplus' has been turned into the Swan debt, with almost nothing to show for it in real assets.
 
In an ideal world we'd have the govt balancing the budget each year, both projected and actuals.

In reality, we should be aiming for a situation where we run in surplus during the good years, in deficit during the bad years, and balanced during the average years. By applying some smarts we could invest during the good years to carry us through the bad. Over time we could gradually build up a soveriegn investment fund, and use this to support specific projects (such as large infrastructure projects).

If ANY party could actually articulate and then implement this, I'd vote for them.

Personally I think both sides are severely lacking in talent right now.
 
In an ideal world we'd have the govt balancing the budget each year, both projected and actuals.

In reality, we should be aiming for a situation where we run in surplus during the good years, in deficit during the bad years, and balanced during the average years. By applying some smarts we could invest during the good years to carry us through the bad. Over time we could gradually build up a soveriegn investment fund, and use this to support specific projects (such as large infrastructure projects).

If ANY party could actually articulate and then implement this, I'd vote for them.

Personally I think both sides are severely lacking in talent right now.
This.

And that's all I can be bothered saying really. Both sides are just tiresome and provide nothing.
 
At least tennis has a point and is interesting.
Yeah, but these threads have lots of grunting, squealing and tantrums, just like the tennis, so we're halfway there.

Now all we need is a few pics of very fine female specimens in short skirts and tennis shoes.

Sorry; was that politically incorrect? :D;)
 
Last edited:
evand, you just got served by facts. Unless the AOFM is a Liberal/National stooge? Yeah I suppose it must be. Plus it's Tony's Fault.
 
Top