The Abbott government just borrowed a further $800 million, which brings the cumulative total of gross borrowings since 9 September 2013 to $48.85 billion.
The Australian Office of Financial Management has indicated it will borrow a further $1.8 billion next week which will bring the amount of gross debt issued since the election to over $50 billion in just over five months.
This article was first published in The Melbourne Review https://www.melbournereview.com.au/commentary/article/joe-hockey-treasury-or-trickery
In the move to a budget surplus, how much is Joe Hockey's prowess as Treasurer and how much is trickery?
The Abbott government's chances of re-election in 2016 will be driven by the budget next year.
On 12 May 2015, Treasurer Joe Hockey will deliver his second budget and in doing so, he will announce that the budget is back on track, the Labor mess has been cleaned up and that for 2016-17 and beyond, there will be budget surpluses.
Treasurer Joe Hockey and Employment Minister Eric Abetz must be delighted with the current structure of the industrial relations system and the degree of flexibility in the labour market.
Recent labour force data have confirmed a near text book degree of flexibility in wages. At a time when employment growth is softening and the unemployment rate has been edging up, there has been a slowing in the pace of wages growth.
Here are the facts.
In 2012-13, average earnings for a worker in paid employment in Australia were approximately $57,000 for the year.
On those earnings, the income tax plus the Medicare levy was approximately $10,925.
The tax refund to News Corporation reported in today's AFR, as it won a legal battle "from a series of paper shuffles between subsidiaries", as the AFR's Neil Chenoweth put it, was $882 million.
This $882 million from "paper shuffles" is equal to the income tax paid, including the Medicare levy, for around 80,700 workers on average incomes.
There are lots of people who spend $2,000 each year and more going to concerts, plays, movies and the opera. But is the cost of these tickets dead money or money well spent?
That few thousand dollars no doubt provides a good dose of inspiration and entertainment in the delights of Carmen, One Direction, Mary Poppins, The Summer of the Seventeenth Doll, Hamlet and a mix of the Hollywood blockbusters and fringe movies that are always a bit quirky.
Most who spend a chunk of their hard earned cash on any such array of cultural fulfillment will no doubt think it money well spent.
But is it?
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.
I was wrong.
The RBA is not going to hike interest rates in March after all, simply because of the persistent degree of slack in the labour market.
In my judgment, the stellar lift in dwelling construction, exports and consumer demand, all event from around the middle of 2013, would have been sufficient to kick in to solid employment growth by now.
This article was first published on 25 June 2012 on marketeconomics.com.au
Australia's net Government debt was $96 billion in June 1996. By June 2007, Australia had net financial assets (negative debt) of $29 billion. The Howard Government and the current Liberal Party point to this turn in the finances of the Government with pride and say it is a sign of good economic management.
To be sure, this is a significant turnaround but there are some interesting facts behind the issue of Government debt in the past 30 or so years.
The Westpac measure of consumer sentiment dipped 3 points in February, to be back, more or less, to neutral. That is to say, consumers are neither optimistic nor pessimistic about the future.
While it is never possible to pin-point why consumers are happy or sad, the timing of the survey coincided with fires, SPC Ardmona, heat, an emerging market inspired drop in stocks and of course, some talk that the next move in interest rates might be up. The government also took the odd step of talking down the economy, inflaming the budget 'crisis' again and the need for spending cuts which, no doubt, is dampening sentiment.