The government borrowed another $1.6 billion last week, which brings the total of gross new borrowings to $52.45 billion since the election six months ago.
As has been noted previously, this gross figure includes short term T-Notes and borrowing that cover other bond maturities.
According to the Australian Office of Financial Management, the amount of government debt (gross) has increased by $27.5 billion since the election to a record high $300.7 billion.
This running tally of new borrowing since the election is, in economic management terms, neither here nor there as it reflects the functioning of government. It is a non-debatable, non-arguable financial management tool that has been in operation in one form of other since Federation. The government has borrowed money in one form or another to fund the budget deficit, provide liquidity and stability for financial market and to have a risk free yield curve from which other financial instruments can be priced.
This is why government debt never has and never will be eliminated.
That said, it was the current government when in opposition that made much of the rise in debt. They still do in the context of the “fiscal mess’ inherits from the previous government.
Six months into the new government and the policy decisions of the government have only added to the borrow level, highlighted of course by the brain-snap $8.8 billion borrowed by the government to give to the RBA.
Six months in and there has not been one attempt to “pay down Labor’s debt”. Some form of fiscal tightening is likely in the Budget in May, when a mix of a vastly strong economy and some significant spending cuts will see the budget return to surplus in the next few years and for the growth in debt to be wound back.
In the mean time, the government is borrowing at a rate that would make Frank Crean blush.