Losing triple A by trying to maintain AAABY BENJAMIN ONG | MONDAY, 6 MAY 2013 9:25AMI may be crucified for saying this but it might be time for the Australian government to go counter-cyclical and lift spending and watch the deficit rise. |
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Benjamin you cannot be serious. Really. The manner this govt has racked up spending has created a situation where there is no pay back. Just debt. Bad debt. Not good debt where there is return on the invested borrowed funds. This is why we are being slugged another .50% on the medicare levy to fund a good cause- the NDIS. I am glad you mentioned the pink batts but seriously lets figure out how we are going to deal with the current debt problem before we start adding to it. Once again the salaried worker is going to where the increased levy and further inposts down the track and the black economy (ieg cash only at the fish market for take away) gets away with it. I am sure I see a liitle of Greece/Spain/Italy etc in all this.
Peter,
Like I wrote, I may be crucified for saying that but...if you call Australia's deficit/debt -- roughly around 1% and 20% of GDP, respectively -- a problem, then I don't know what the other "luckier" economies have:
Forget Greece's deficit that's around 6.3% of GDP or its debt worth about 157% of its national output. Or Spain which has 6.5% (deficit) and 84.2% (debt) of GDP. Or Italy with 3.1% and 127%, respectively. Or Portugal with 6.1% and 123.6%.
Just compare Australia's fiscal ratios to those of the two non-AAA rated countries which investors are currently pouring their money into:
The United States has a budget deficit of about 5.4% of national output and debt of more than 100% of GDP.
Japan's deficit is 8.9% of GDP (and will certainly grow by more with its planned fiscal stimulus) and debt of 212% of GDP.
Ben I agree with you on this. If you were to look at gov't policy's with the benefit of hindsight they are ass around. During the mining boom and when the economy was going along swimmingly the gov't of the time increased benefits to 'middle' Australians, first home buyer grants, tax cuts, baby bonus etc etc. Then when the economy hits the skids the gov't of the time talk about increasing taxes and decreasing spending. Makes no sense.
My sentiment exactly Stuart