The Abbott government borrowed a further $800 million today. This brings the amount of gross government debt issued since the election in September 2013 to $47.25 billion.
Allowing for the fact that some of this borrowing is in the form of short term T-Notes and covers bond maturities which means there is some double counting in the new borrowing total, the amount of total gross government debt has increased by $26.1 billion to $299.2 billion since the election.
I was wrong.
The RBA is not going to hike interest rates in March after all, simply because of the persistent degree of slack in the labour market.
In my judgment, the stellar lift in dwelling construction, exports and consumer demand, all event from around the middle of 2013, would have been sufficient to kick in to solid employment growth by now.
This article was first published on 25 June 2012 on marketeconomics.com.au
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 Westpac measure of consumer sentiment dipped 3 points in February, to be back, more or less, to neutral. That is to say, consumers are neither optimistic nor pessimistic about the future.
While it is never possible to pin-point why consumers are happy or sad, the timing of the survey coincided with fires, SPC Ardmona, heat, an emerging market inspired drop in stocks and of course, some talk that the next move in interest rates might be up. The government also took the odd step of talking down the economy, inflaming the budget 'crisis' again and the need for spending cuts which, no doubt, is dampening sentiment.
It is staggering that some who should know better reckon that the building approvals data for December were weak.
OK, the number of building approvals fell 2.9% in December in seasonally adjusted terms, but this must be viewed in the context of earlier readings.
Those readings show that the number of building approvals in the December quarter as a whole was the highest since 1994 and the second highest quarterly result ever recorded. Sound weak to you?
The ABS measure of the trend series has increased every month, including December, for two years to be at the highest level since 1994.
Dwelling construction is in a boom.
Making the outlook for the construction sector all the more positive is that non-residential building is explosive with quite phenomenal double digit growth over the second half of 2013.
OPENING REMARKS TO THE SENATE SELECT COMMITTEE INTO THE ABBOTT GOVERNMENT’S COMMISSION OF AUDIT
Australia does not have a government debt or deficit problem.
According to Treasury numbers published by Treasurer Mr Hockey in the Mid-Year Economic and Fiscal Outlook in December, over the last 43 years of budget outcomes (the full data set), there have been 19 budget surpluses and 24 budget deficits.
Up until 2007-08, just prior to the collapse of the global financial system and the onset of the deepest recession in the industrialised world since the 1930s Great Depression, surpluses were a little ahead of deficits, 19 to 18. This suggests that the recent move to budget deficit is almost certainly nothing more than the long-run business cycle impacting on government finances.
Over the summer break, while fiddling through data bases, reading and just being interested in things, I unearthed a few quirky bits and pieces about the Australian economy, people, sport and a few other bits and pieces.
Only item 38 is open to any discussion, perhaps. Here are the top 40.