- 04 Dec 2014 12:55
#14494498
So in the last couple of days I've noticed the conservative side of politics and the media begin to re-focus on the economic state of the country and the financial position of the government. There is some legitimate reasons for this, not least of which is the failure of the Coalition to pass certain pieces of legislation designed to, among other things, ease the current budget deficit (now standing at $35 billion, around 2% of GDP).
The primary reason, I'm sure, is divert attention away from these failures and the general unpopularity of the Abbott government federally and the election results in Victoria.
Is there, though, a serious case to make for the Australian government having a "budget crisis"? Many people deny this being accurate, people including Bill Shorten who has described it as a "myth" and "a manufactured crisis".
The numbers look terrible or fine, depending on the context in which you view them. Comparable with other developed nations we're in great shape, out debt-to-GDP ratio is only 20%, a magical sort of a figure to politicians in Europe and the US.
However, that debt as a figure is still $370 billion dollars, not exactly loose change. When you add state and local govt. debt it becomes something like $600+billion. There's a gaping deficit and seemingly no end in sight, with commodity prices being way down (iron ore is half the price it was this time last year and is a massive source of govt. revenue), China slowing somewhat risking demand for our exports, and lack of political chutzpah to address the issue properly.
I do get frustrated when I hear people dismiss the topic offhand due to comparable nations being worse off, why would that matter? I worry we're choosing to bury our head in the sand and call it an unfixable problem, and leave our kids to foot an un-payable bill.
Do we really have a serious issue or is it just smoke and mirrors?
The primary reason, I'm sure, is divert attention away from these failures and the general unpopularity of the Abbott government federally and the election results in Victoria.
Is there, though, a serious case to make for the Australian government having a "budget crisis"? Many people deny this being accurate, people including Bill Shorten who has described it as a "myth" and "a manufactured crisis".
The numbers look terrible or fine, depending on the context in which you view them. Comparable with other developed nations we're in great shape, out debt-to-GDP ratio is only 20%, a magical sort of a figure to politicians in Europe and the US.
However, that debt as a figure is still $370 billion dollars, not exactly loose change. When you add state and local govt. debt it becomes something like $600+billion. There's a gaping deficit and seemingly no end in sight, with commodity prices being way down (iron ore is half the price it was this time last year and is a massive source of govt. revenue), China slowing somewhat risking demand for our exports, and lack of political chutzpah to address the issue properly.
I do get frustrated when I hear people dismiss the topic offhand due to comparable nations being worse off, why would that matter? I worry we're choosing to bury our head in the sand and call it an unfixable problem, and leave our kids to foot an un-payable bill.
Do we really have a serious issue or is it just smoke and mirrors?
"Stalinist circle-jerk is the best kind of circle-jerk." - fuser