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 LATEST FROM THE KOUK

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The Fairfax media group is reporting this morning findings from the National Drugs Strategy Household Survey that show smoking levels are in decline. Not at all surprisingly, the numbers from the NDSHS dovetail with the hard data on the volume of tobacco consumed from the Australian Bureau of Statistics. Those data show that the volume of tobacco consumed is 5.3 per cent lower in the March quarter 2014 compared with the December quarter 2012.

What is interesting is the fact that the NDSHS survey was conducted between July and December 2013, before the 12.5 per cent rise in tobacco excise took effect. The authors of the report noted: "We know that that tax has a lot of influence over consumption so it's really important that the data was collected before that".

"The only thing that happened in the 12 months before that was the introduction of plain packaging laws."

The key findings were:

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The Fairfax report can be found here.

http://www.canberratimes.com.au/federal-politics/political-news/plunge-in-smoking-attributed-to-plain-packaging-20140716-ztqht.html 

Why the Abbott budget was the perfect political poison

Wed, 16 Jul 2014

This article first appeared in The Guardian: http://www.theguardian.com/commentisfree/2014/jul/11/why-the-abbott-budget-was-the-perfect-political-poison 

Why the Abbott budget was the perfect political poison

The Abbott government has learned the hard way that a wide-ranging policy agenda of small ticket savings annoys almost everyone. Take note, Labor

A striking feature of the Abbott government’s first budget is that it offended just about every sector or interest group in the economy, while doing precious little to return the budget to surplus.

The net savings to the budget over the three years to 2016-17 totalled $18.2 billion – or around 0.3 per cent of GDP each year. Such a puny fiscal tightening leaves the budget in deficit in that time, and the bottom line is worse than the budget numbers left by the previous government in the pre-election fiscal outlook.

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