‘Utterly desperate’: Why Scott Morrison wants you to ignore government debt

Thu, 07 Nov 2019  |  

This article was written on 14 October 2019: It was on the Yahoo Finance website at this link: https://au.finance.yahoo.com/news/ignore-government-debt-225040404.html 


‘Utterly desperate’: Why Scott Morrison wants you to ignore government debt

When it comes to government debt, the Morrison government is desperate for you to keep your eyes and ears closes and ignore the facts.

Utterly desperate.

These facts are likely to be defined by Prime Minister Morrison as being ‘in the Canberra bubble’ and therefore not worth talking about.

So what is happening with government debt? You know, the government debt that when the Liberal Party was in opposition and Labor were in power was “a disaster”, that was “undermining our kid’s future” and threatened to “ruin the economy”.

When in Opposition, the Liberal Party promised to return to the budget to surplus and to “pay off Labor’s debt”. It was a promise that created and then reinforced a perception, at least in the mind of some voters, that the Liberal Party is a better economic manager than Labor. This perception has been a critical factor in the Coalition winning the last three elections in 2013, 2016 and most recently in 2019.

Last week, updated data on government debt were released which allowed for an up to the minute assessment of how those promises on debt reduction are going.

In terms of gross government debt, data from the Australian Office of Financial Management shows it reached a record $565 billion as at 11 October 2019. At the time of the September 2013 election, gross government debt was just $273 billion.

This means that in a little over six years, with six budgets and countless policy changes and reforms from the Coalition, gross debt has increased by $292 billion or 107 per cent.

When Mr Morrison is talking about “strong growth” I assumed he wasn’t referring to government debt!

According to Department of Finance data, net government debt reached a record $399 billion at the end of August 2019. At the time of the September 2013 election, when the Coalition was swept to power, net government debt was a paltry $161 billion.

Net government debt has increased by a massive $238 billion or 148 per cent in the six years the Coalition has been in control of spending and taxing policies.

This $238 billion addition to net debt in the six years under the Coalition government compares to the $215 billion rise in net debt under the Labor Party in the six year period from 2007 to 2013 when it was last in office.

Labor’s addition to debt occurred when the world economy was floundering in the deepest recession since the 1930s Great Depression and was driven by both fiscal policy stimulus and a loss of revenue as economic growth slowed.

How has the debt been mounting?
The extraordinary thing about the debt blow out in the last six years under the current Coalition government has been that is has occurred when the global economy has been growing strong and commodity prices have been booming. The Coalition government is banking on getting the budget to surplus this financial year and in the process, it is hoping to stem the rise in debt.

At the time of the last budget, delivered in April, the 2019-20 budget was forecast to register a surplus of $7 billion. It is too early to be absolutely sure whether a $7 billion surplus is still on track. Providing a massive windfall in revenue to the government is the still robust level of commodity prices, particularly iron ore, but this is being offset by the chronic slump in private sector demand which is lowering wages growth and consumer spending.

Data last week from the Department of Finance shows that for the first two months of the financial year (July and August) the underlying budget balance is running $664 million below the assumed run-rate from the budget figuring.

The monthly budget numbers are hugely volatile (for example company tax being paid on the 1st of the month rather than the 31st of the prior month) but if this trend continues, the $7 billion surplus will be under threat and that will spill over to the level of government debt.

Either way, the Coalition has failed in its promise to reduce government debt and this may yet be an issue when the 2022 election rolls around.

comments powered by Disqus



Wed, 29 Jul 2020



Covid19 has opened a door for Australians to positively accept significant changes that will lead to a shared good. This rare opportunity enables us to achieve sustainable economic and social goals that create a new ‘normal’ as our way of life.

These Ten Steps are presented as non-partisan recommendations to the Australian Parliament in the firm belief that, if they embrace them, the Australian economy and society will be greatly enhanced after the Covid19 pandemic has passed.

*A job for you if you want one.
A significant increase in part time and casual employment can be created that will enable you to enjoy a more creative and peaceful lifestyle and to live longer and better. The traditional age at which you would have been expected to retire will become obsolete as a result. An access age for pension and superannuation will become your choice. This will enable you to remain in paid work for as long as you want to, on a basis that you choose, while boosting the productivity and growth of Australia.

*You will get wage increases that will be greater than your cost of living.
A demand for enhanced innovative skills at all levels of employment will be created as the economy grows in strength, thereby enhancing your stature in the workforce and enabling executive salaries and bonuses to drop to levels that are accepted as justifiable by employees, shareholders and customers.

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

Tue, 07 Jan 2020

This article first appeared on the Yahoo Finance web site at this link: https://au.finance.yahoo.com/news/the-governments-test-in-2020-220310427.html   


The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

Several thousands of houses, commercial buildings and infrastructure will require billions of dollars and thousands of workers to rebuild. Then there are the furniture and fittings for these buildings – carpets, fridges, washing machines, clothes, lounges, dining tables, TVs and the like will be purchased to restock.

Then there are the thousands of cars and other machinery and equipment that will need to be replaced.