Since the election in September 2013, the Abbott government borrowing levels have exploded, as it has issued $87.05 billion worth of government bonds and T-Notes. On average, this new government borrowing has been around $2 billion a week.
The borrowing has been necessary as it needs to fund or cover the budget deficit plus maturities of debt (bonds and T-Notes) that were issued in the past. Netting this out means that the level of gross government debt has reached a record $322.687 billion which is $49.5 billion higher than when the Abbott government was elected.
As the government flounders with its budget in terms of the misguided measures that were designed to help the budget return to surplus and, linked to that, getting its policy agenda through parliament, it seems likely that the budget deficit will be wider than assumed at budget time and worse still, even at the time of MYEFO which saw Treasury fudge a range of estimates to make the budget bottom line look as bad as possible.
All of which highlights, yet again, how purile the budget debate on deficit ‘disaster’, ’emergency’ and ‘repair’ has been.
The Abbott government is making the bottom line of the budget worse with its spending spree on parental leave, roads and the medical research fund while killing two key revenue sources with the mining tax and carbon price set to go. Its limp lettuce negotiations with the minor parties in the Senate are only making matters worse for the bottom line.
The significant levels of borrowing since the election confirm that not only has nothing been done to “fix” the budget, but policy action and poor politicking with the minor parties in the Senate have made things worse.