Dear Poirot,

The graph shows only 34 countries - but the overall number is much bigger, so where are the others? A few years ago, Australia was among those "others", having no debt.

The problem is that debt is an addiction. If you find it acceptable, if you do it even once, then the next time you are likely to go easy on yourself and say, "Oh, just once more..." - it only gets harder and harder to quit, and with this mentality, even if somehow you become "clean" for a little while, soon you find yourself in the deep end again.

I don't care about this silly Labour/coalition petty-politics divide. One needs a microscope anyway to see their differences. This is a matter of principle, it's just something one shouldn't do, I am not even comfortable of owing the utility-companies money for electricity/water/phone that I used but haven't been billed yet. What kind of example is this to households and to the younger generations? Did everyone lose their shame?

Max Keiser says today that world debt is 5 times the GDP of the planet. So when interest rates rise, debt will outstrip any increases in productivity.

So to argue about reduction in debt without banking reform is denial of the mathematical reality we now face. This debt as created from nothing depreciating all our currencies. We can't possibly be that stupid.

Good morning all,
Interesting comments. Thank you.
@Shadow Minister,
1. No, not all. Australia did not have the AAA rating with the important Fitch agency under Mr Howard. This was achieved in November 2011 when Ms Gillard was PM and after Mr Swan had been Treasurer for four years.
That was the first time ever that Australia had achieved AAA ratings with all three major agencies.
2. Regarding "The budget cycle runs from July to June, So the budget results up to July 2014 are entirely the result of Labor's policies."
That would only be true if the new Government did not change any of Labor's policies. But clearly they did - as indeed they had a mandate to do.
The whole point of the article is to show from the Final Budget Outcome how much of the debt at June 30 2014 was the result of the Labor Budget, and how much was due to changes made by the Coalition in the ten months since the election.
Answer: debt up 13.7% over Labor’s levels. Interest payments up 28.6%.
Unfortunately they made many foolish decisions.
3. No, they were Treasury and Finance predictions, not Labor's.
4. Perhaps. But can you see how much worse the debt blow-out would have been had the Senate not limited at least some of their folly?
5. No, not at all. Debt free status had absolutely nothing to do with it. The other debt free economies all tanked disastrously through the GFC. It was clearly not a factor.
Happy to discuss.
Cheers,
AA

Dear Poirot and Yuyutsu,
International debt comparisons are quite intriguing. But it is vital we distinguish between net and gross debt.
Norway, for example has gross debt of 29.52% of its GDP. Which sounds like it owes a lot of money. But its net debt is negative 180.83% - in other words, a vast surplus.
Best source of net debt data is here:
http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/weoselgr.aspx
That data does show that Australia's net debt peaked in 2013 and was set to decline each year henceforward.
This graph of the gross debt shows the decline over the last year:
http://www.tradingeconomics.com/australia/government-debt-to-gdp
With the bizarre decisions the Abbott Government is now making, it appears that trend is reversing and both net and gross debt are now expanding again.
The differences in policies, Yuyutsu, do seem fairly significant, especially in economic management.
Happy to discuss.
AA

AA,

Fitch is the minor player, the Baftas compared to the Emys and Oscars. Fitch is the organisation that ranked Greece the highest of all prior to the GFC, and only changed its rating of AUS because it was invited to.

The financial policies of Labor were in effect until July 2014 until the coalition could start changing them, so prior to that it was all Labor's mess.

All were treasuries predictions, first using assumptions by Labor, and then accurate ones by the coalition. Isn't it funny how "treasury" is always so wrong under Labor and so much more accurate under the liberals.

Considering the Senate has primarily blocked savings measures, even the ones Labor promised, the budget is worse because of Labor obstructionism.

The other indebted countries also tanked. Labor's waste has been shown to be largely ineffectual. Mining had a bigger influence.

Not at all, SM, not at all.
Regarding Fitch, if you simply google ‘major rating agencies’ and then scan down the page you will see several unrelated sites which refer to ‘the Big Three’. Fitch is one of them.
Australia first gained AAA ratings with the Big Three in November 2011.
Regarding financial policies during the 10 month period September 2013 to June 2014, the critical decisions which have blown out the debt were all Coalition policies opposed by Labor.
The largest, of course, was Mr Hockey’s bizarre decision to give $8.8 billion to the Reserve Bank, which it did not ask for and did not want.
That is the largest single cause of the $24.36 billion hike in the debt attributable to Mr Hockey’s unwise decisions.
It is not difficult to list all the other stupidities which have blown-out the debt.
And what’s this “Labor obstructionism”, SM?
Really?!
You always condemned Mr Gillard as “Juliar” after her promised emissions trading scheme was blocked by the Coalition and the other parties. Correct?
Why was the forced solution of the carbon tax – which was never Ms Gillard’s preferred option – a Labor lie and not Coalition obstructionism?
The words pot, kettle and black somehow come to mind, SM.
Happy to discuss.
Cheers, AA