It's now $61.15 billion of gross borrowing by the Abbott government

Fri, 21 Mar 2014  |  

The week ends with the Abbott government borrowing a further $700 million today, which brings the total of gross borrowing since 9 September 2013 to $61.15 billion.

$61.15 billion of bond and T-Notes that have been issued in just over six months as the government funds the budget deficit, covers maturing bonds and T-Notes and prepares to fund a range of its policy expenditure items.

As I have noted at nausium on the issue of government debt over recent years, the Australian government's debt level remains trivial, chicken feed, small beer and the campaign of the Coalition Parties to suggest otherwise was factually flawed and it still is.

Even in government, the Coalition bemoan the level of debt and pretend it is a major factor threatening to undermine Australian sovereign risk or some similar nonsense.

The credit ratings agencies, all which rank Australia triple-A with a stable outlook and have since 2011, suggest the level of government is low. So do foreign investors who own close to three-quarters of the government bond market and a huge proportion of the stocks listed on the ASX as well as an increasingly large holding of property. They do so comfortable in the knowledge that a government debt problem that would hurt the Australian dollar or bond yields is very unlikely.

The cumulative effect of the new borrowing means that gross government debt now stands at $310.1 billion, some $36 billion higher than when Mr Abbott convincingly won the 2013 election.

It was always obvious the promise to stop the borrowing and repay Labor's debt were false. The facts confirm this.

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The Coalition might as well face it they're addicted to tax

Thu, 21 May 2015

It is about as credible as believing the earth is flat, but there remains a common perception that the Labor Party is high taxing, while the Coalition is low taxing.

Mr Hockey’s budget last week smashed once and for all this perception with the simple fact that his own budget documents show how much Coalition governments rely high tax to pay for their pet projects.

As a share of GDP, Mr Hockeys budget documents show that the level of tax to GDP takes the following profile:

2014-15   21.9%
2015-16   22.3%
2016-17   22.7%
2017-18   23.0%
2018-19   23.4%

And even with that surge in tax revenue, the budget is still in deficit. Whoops.

Quiz Week 4: Win a copy of my book, Myth Busting Economics

Sun, 17 May 2015

It is week 4 of the quiz to win a copy of my book, Myth Busting Economics.

The first three quizzes have gone well. Two of the winners have been HSC economics students which is hugely impressive about their thought processes and teachers.

Now to week 4. All entries need to be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it.  before 12 noon on Wednesday, 20 May 2015. So please enter soon and I look foward to giving away another copy of my book.

Here is this week’s question.

According to the 2015-16 budget papers, what is the amount of government revenue (called receipts in Budget Statement number 10) Treasurer Joe Hockey is forecasting to collect in 2015-16? Answer to the nearest $million – ie $354,305 million.

Tie breaker 1:

In the budget papers, what is the economic forecast for real GDP growth in 2015-16?

Tie breaker 2:

What is the date of the next RBA Board meeting?

Tie breaker 3:

What will be the yield on the Australian 10 year government bond at close of business, Friday 22 May 2015. Note the current yield is 2.89 per cent.

So there it is. Get your entries in by the Wednesday deadline. All the best.