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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Assessing the true position of the economy

Tue, 04 Aug 2015

This article first appeared on The Adelaide Review website in July at this link: 


The data on retail sales, consumer sentiment, building approvals, several readings of house prices, inflation, job advertisements, business expectations, employment and credit are just a small sample of the news that is available to analyse and judge whether the economy is strong, weak or somewhere in between.

In addition to this hard economic news, financial markets trade virtually around the clock and swings in stock markets, commodity prices, the yield on bonds and foreign exchange markets are also vital elements determining the health of the economy.

Despite this information overload, it is often difficult to accurately assess the true position of the economy.

Is the economy gaining strength?

Mon, 03 Aug 2015

So far so good. The flow of data today has erred on the positive side.

The AIG PMI for manufacturing, which is always choppy month to month, rose a hefty 6.2 points to 50.4 points. Maybe the low Aussie dollar, low interest rates and positive tone from the global economy are all kicking in. Either way, it is better to get an up 6.2 points than a down 6.2 points.

Then there was the TD-MI Inflation Gauge. A neutral result with inflation lifting 0.2 per cent in July, for an annual rise of 1.6 per cent. While inflation is clearly well contained, the annual inflation rate has edged up from a 1.3 per cent low in February and in the next few months, some very low monthly readings drop out of the run rate, suggesting that inflation will revert to around 2.5 per cent before year end. Not a problem, but again, better than inflation sliding towards 1 per cent … or less.