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.

As has been the case throughout the period since Federation in 1901, government debt and borrowings are a vital part of the functioning of government and in more recent times, have been an essential aspect of maintaining financial market stability. This is likely to be the case for many decades to come.

It remains a simple fact that no government has even eliminated gross government debt. Indeed, it is impossible to even imagine a scenario where government debt would ever be eliminated, even with large and persistent budget surpluses, simply because it is essential to have government debt for banking and financial market stability.

All of which goes to show the silliness of the debt and deficit discussion in recent years. Even with the new flood of borrowing, Australia’s debt is low and the current level of debt is more or less the optimal amount to allow financial markets to function. The government is scheduled to borrow a further $1.8 billion next week and around $70 billion in 2014 as a while.

The source of for these data is the