It is no surprise that Australians are going into debt. They are being taxed to death - income tax, petrol excise, GST, etc etc etc.

And they simply follow the example of a profligate government that that time and agin proves itself to be fiscally incompetent.

I understand though that tax in Australia is still not that high compared to other OECD countries. The real problem is that the money collected hasn't been put back into essential services. Which is partly why NSW has an embarrassingly antique rail system.

Debt is also a personal choice. We may not have a choice in regard to income tax but we can choose not to take out loans on huge houses, appliances, expensive schools and new cars. I saw an ad where the woman in a couple wanted a new lounge. The man wanted a new sound audio/tv system. The solution? Get a huge loan. Fan-bloody-tastic!

Actually, if the couple got off their bums and did some exercise they'd be a whole lot happier. But that is a whole new point.

Ankelbita,the high taxes is a result of our socialists state.44% of all taxes go into social security.We have huge bureauracies which consume and waste money beyond the bounds of your wildest dreams.Private enterprise needs to become less productive,because the harder you try the more the bureauracy grows.

This is not because we take out loans. It is because we import more than we export. Consume more than we produce. Spend more than we save.

The public sector exports very little. Some say, produces very little of value. These people however do earn salaries, import, and consume. People on welfare import and consume. How is it possible that our personal income taxes raise $100 billion, $80 billion of which goes on welfare?

$80 billion in unearned spending … that’s one way of living beyond our means.

I see two separate (but related) points here. Personal debt seems to be increasing and by living beyond our means by taking out huge loans, we are making ourselves vulnerable to interest rate increases. If you take out a huge loans for one of those gigantic designer houses in some suburbs of Western Sydney, a small interest rate rise can economically cripple you. But people are not only getting into debt through house purchase. They are also getting loans for the furniture, hi-fi systems etc.

That relates to the second point. Appliances, new cars and so on often come from overseas. That means more spending on imports rather than exports which contributes to national debt.

In relation to social security spending, there are obviously some policies such as Family Tax Benefit B are a stupid waste of money. On the other hand, if you slash social security thoughtlessly what happens? Spending on police, corrective services, homelessness etc. So you don't necessarily save money.

Of course, if Howard slashes social security payments then spending on the police etc is the states' problem. He might be a nasty piece of works but nobody can say Howard is stupid.

Seeker,yes our balance of payments will continue to worsen.As China improves the quality of it's goods so more Australian manufacturers will continue to close.Just recently a salesman commented to me that all our furniture manufacturers are closing.In China the workers live in the factories,no workers comp,holidays ,long service or super,or public liability or Govt regulation.If you get injured,send your brother and he will support you.Our real rate of unemployment is closer to 800,000 since we have reclassified 300,000 of long term unemployed as disabled.This has slowly happened over the last 20 yrs.

The theory is that as China and India's living standards improve,and socially we will meet them in the middle, thus a level playing field will be reached.Guess what?China and India have so many poor that and with limited world resources they will always have this cheap labour source.Wages in Australia will be forced lower and eventually under the weight of our social security system,our economy will collapse.We are selling off anything we can just to support the socialist state.We have hamstrung ourselves with individual rights,and are losing our sense of morality and discipline.If we are going to compete with poor countries on a level playing field,we will have to live like them.