Good article Peter,

Many Australians have alot to thank you for your determined and successful financial vision.

I am sure deep down you do not believe we are a low tax country.

Business wise, any business with the scope to work internationally have little incentive to stay here @ 30%, especially with places like Malaysia and other who roll out the red carpet for business. As we become more global over the next 3 generations, we will have our eyes picked out with many using the incentives around the place.

Personally, this is not correct either. The lower middle who are broke every week cop the brunt with tax effecting their ability to eat, and as an income earner you only have to be moderately successful to be put over a barrel at the top marginal tax rate.

Well done on things, keep the cheshire cat glow for your achievements.

Now you can work on a micro level, reaching and helping every individual Australian by either a yearly tax christmas rebate, or by giving people extra in their pay packets every week. Then if you ark up on business, you can stand at the top of the mountain as one of the greats.

Best of luck

Gosh!

Peter needs to give some recognition that the settings enabled Australia to perform well were set by Hawke/Keating - they pushed us into the real world of the global economy - that is not to say JH and PC have managed things well - but it has to be said that that is the least we expect of a Government - people should never get too over blown simply by doing their job well when that is what we pay them for.

The other issue we need to contend with is the current account and the growing level of Private debt - approaching 400 billion - it has doubled while JH has been in the Lodge

Our low level of self sufficiency in the realm of Information and Communication Technology has contributed nearly 20 bill to our current account deficit - and that stuff is supposed to be underpinning our economic performance.

We might not be the poor white trash of Asia but we are still vulnerable and our apparent prosperity certainly is not reflected in infrastructure development, our parlous manufacturing sector education and training or health delivery.

While some of are better off we are paying for so much more out of our own pocket - and there are plenty who are no better off and still are required to pay more for services than ever before.

So while PC is singing the praises of his performance there is still plenty of work to be done

bring back 94 I didn't have a morgue and I was making a killing on term investments. Plus my job was more secure then then it is now.

A killing on TERM investments!

Ha ha ha. Lets say that you achieved more than a pittance return from them you should have made enough to pay off your mortgage, prior to your property doubling in value over the recent boom, or was it that you drew your equity and made personal financial decisions.

Dont blame the system folks. You relinquish the blame, you relinquish the power to change and solve things. We are lucky the Government kick started the market with incentives. This government understands property is the cornerstone of Australians wealth.

Dont be alarmed by debt levels, unless it is bad debt. I think it is great to gear yourself up and leverage, and this is the way to creating wealth and therefore a provisioned retirement.

What is alarming is that most under 25 are credit impared due to the rise of mobile phones, easy credit etc. This will hold the majority of our kids back from financial security. This is something that needs to be addressed, and is a rapidly growing problem.

You have done well, Mr Costello, but what happens when we run out of holes in the ground?
All we seem to do is export our ground[minerals] and import people from third world countries.
We have very little manufacturing bases, most of our manufacture was outsourced to countries with cheap labour, so what do we have left?
Prices of everything have skyrocketed, do you know the price of a leg of lamb? Yesterday I saw them at $27 each, and gas and electricity, not your worry, but the bills are steep. For an aged pensioner ,life can be grim in this lucky country.
You can do better.

Mr Costello, when will you create the conditions for some real investment in Australia? Yes you have presided over major labour and industry reform and computer-underpinned efficiency gains but there has been little change to the basis over our economy. Yes yes I know about elaborately transformed manufacturing growth exports etc, but our exports are underpinned by a removalist industry - shovelling Australia into ships and the income directed to an overblown, low skill, low value added real estate industry. If you like, exchanging resource for bricks.

What about encouraging people to save rather than taxing interest so that one's capital erodes due to inflation.

What about looking at the dismal efforts to promote value adding to our resource base with failures like using gas like the Pilbara Petrochemical Project, Syntroleum etc and failures like QMag and BHP's DRI project? Sure you might explain them away for apparent legitimate reasons, but Australia’s' investment track record is abysmal. Governments have spent close to a billion dollars in the past 15 years with no outcome. Why? No strategy, no tax incentives like the pioneer status in SE Asia. Where is the synergy-based visions for Australia rather than the pathetic little schemes to prop up real estate like for first home owners that was nothing more than a political feel good ploy.

What's going to happen to Australia when China's rural to city migration slows and underpaid workers no longer serve to supply us with cheap goods? I predict our dollar will hit 40 cents within three years.

We are lucky to be sitting on resources and that softens the resolve to take some proactive long term initiatives. Tax reform and real strategic development is what this country needs.

We don’t need to bask on the benefits of having cleaned up the country. The core of our wealth creation remains rotten.

And if the term "rotten" is a bit emotive or over the top Mr Costello, consider this.

Other than as fuel, Bass Strait energy is almost exclusively used in the four decade old Altona petrochemical complex which is tiny, high cost and uses dated technology.

On the other side at the Burrup Peninsula, gas and salt is exported - key ingredients to make caustic soda, Australia is the largest deep sea importer of this.

We have massive deposits of raw materials and even when abundant like titanium dioxide, uses odd technology keeping the industry tiny.

I can only point to alumina as a success story and then only because of a quirk of nature.

Every endeavour by your and previous government agencies, including large financial assistance, has FAILED. Syntroleum, Qmag, PICL, PPP etc, just to drop a few names. Instead we promote biofuels, ethanol based on rural produce, subsidised feel-good activities that do NOT add economic value and serve only to assist rural activities at the expense of the majority.

Like so many resource-intensive countries, we are deadened to the realities that will hit us sooner than later. A read of Michael Porter's "Competitive Advantage of Nations" a must read. We are soft and it's going to hurt. Ah yes, it will be the previous government's fault one day wont it?

Mr Costello is it too hard create the conditions for long term investment? I call you bluff.

Peter,

You do come across as being less of a spin artist compared to the Prime Minister. That's a good thing! I get the impression that you prefer to do your research before speaking publicly. The Prime Minister seems more inclined to say 'what sounds good' on the spur of the moment, and while that may get him out of some sticky situations, ultimately it's a weakness.

I would just like to make a point regarding Australia's relationship with Asian countries, and that is there should be far more emphasis on Asian languages and history in the education system, in particular Japanese and Chinese. With Japan and China now our two biggest trading partners, it follows that our cultures will continue to become entwined. Both those countries make huge efforts to improve their English skills of their citizens. Failure to reciprocate must surely be a disadvantage.

Throughout my secondary education I attended Australia's oldest and possibly most prestigious school, and the only languages one could learn were German, French and Latin. Nothing wrong with those, but it should be compulsory in Australian schools to study at least one Asian language. Huge numbers of people from our neighbouring countries visit Australia, migrate to Australia, do business with us and study here.

Before extensive globalisation, Australia tried to avoid integrating with Asia. That is of course impossible now in the 21st century - this century. Australia must learn to improve it's communication skills with it's neighbours.

If you do end up as Prime Minister, Peter, can you please show more tact in dealing with Asian countries than the current Prime Minister does? Tact and caution. Caution I think you have. Do you have tact and an understanding of Asian customs and their subtleties, and differing styles of negotiation? Prime Minister Howard represents the old Australia and our neighbours know it. Peter you perhaps have the opportunity to represent the new Australia.

My apologies, a couple of corrections:

Both those countries (Japan and China) make huge efforts to improve the English skills of their citizens.

and

Australia must learn to improve its communication skills with its neighbours.

What I can't figure out...is how, when the largest employer in Australia is 'Manufacturing' we will survive the 'phase out' of manufacturing AND of services..(did we all see a sheepish Greg Dixon today defensively telling us that 'if these changes don't result in cost savings, we WILL outsource our maintainance overseas' ?)...

...on the topic of Qantas.. has anyone tweaked to the idea that HOSTESSES are probably cheaper when outsourced to CHINA as well !

The idea of the all powerful 'shareholder' being the beneficiary will last as long as the CUSTOMER decides to continue being a doormat and a blank cheque for yet another fee or charge or whatever.

I call AGAIN for a 'peoples' bank... (like Bank Bumiputera in Malaysia) and for some compassionate loyalty by both shareholders and management to this country.

I wonder.. how many 'jobs, mortgages and ruined lives' are the result of a 1 cent increase in dividend ?

I know what Jesus would do.. DRIVE THE MERCHANTS OUT OF THE TEMPLE !

In the same way he addressed the 'religious rationalists' of his day .. u know..those who felt it more important to live according to human doctrine rather than care about their families in the true spirit of the Torah... well.. He would have some choice words for our ECONOMIC rationalists today, who place the nth degree of profit ahead of an overall community well being.

12:16 He spoke a parable to them, saying, "The ground of a certain rich man brought forth abundantly.

12:17 He reasoned within himself, saying, 'What will I do, because I don't have room to store my crops?'

12:18 He said, 'This is what I will do. I will pull down my barns, and build bigger ones, and there I will store all my grain and my goods.

12:19 I will tell my soul, "Soul, you have many goods laid up for many years. Take your ease, eat, drink, be merry."'

12:20 "But God said to him, 'You foolish one, tonight your soul is required of you. The things which you have prepared--whose will they be?

Well done Spinner,

Lets not forget it was the Labour government who floated the dollar, deregulated banking, brought in labour reform, medicare and compulsory super annuation.

This platform created the foundations of a steady economy. It was the coalition's good fortune that the Chinese economy boomed during it's tenure, during the SE Asia crash the Clinton economy was in full swing and both were willing to buy just about everything we dig up. These were the most forgiving of economic circumstances and any treasurer would be seen to do well. How can you have inflation when the market is flooded with cheap Chinese manufactured goods.

The coalition has created a very divided culture. Each election victory was bought with new tax cuts. Tax cuts at the expense of the safety net which is now showing signs of collapse.

While demographic change needed a different solution to fund the old age pension, the focus on superannuation has created an each to their own culture. Instead of providing a steady future tax base we plunder the economy now. Hex fees are so high that children cannot afford to leave home until they are well into their twenties. House prices have shot through the roof and the difference between rich and poor is bigger than ever.

In foreign policy the coalition almost caused a war with Indonesia over East Timor. Mahatir and Lee and were bullying leaders who would show of their strength to the domestic audience by picking on smaller western countries like Australia. Meantime we cowtow to China on every occasion. China a market economy? Not to speak about human rights. When we sell our ores we don't need to sell our soul with it.

The coalition's wealth and economic boom is created on the backs of impoverished Chinese workers. Shame on you, mr Costello!

Mate you lost me with all the snivelling "its my turn".
You'll probably get the job and it will go to your head.
Not because your any good but the other guy is worse.
Who want to live in a nation of working poor?
Sad part is, even if the other party is elected they wont do anything EITHER except blame the previous lot.

G'day Pete,
Anything in the upcoming budget for the poor, or working poor? We are badly in need of assistance. With your projected budget surplus of $17 billion, you could help us out greatly, were you to provide some infastructure in the Health and Transport Departments. Education is another needy area, public education that is with approx 70% of all students. North Queensland is bereft of infastructure, despite our rapidly growing population. Could you please allocate funding to State Governments for things like housing, hospitals, Bruce Highway, schools, public transport etc.

The nation has been crying out for services not tax cuts, your surplus will not help one child find a hospital bed, and provide treatment. Could you please advise why it is that Private hospitals are not required to provide Emergency Wards for patients who pay Private health insurance?

When Workchoice legislation begins to bite, how will ordinary low income families continue to pay their mortages? These and many other questions are on the minds of we ordinary Australians, sincerely hope you can provide some straight answers, remember Christians are supposed to tell the truth, even Hillsong Christians.

Tax Cuts or Health Improvements ?

How much do I benefit from $5 extra a week if I die in the emergency room due to lack of staff ?

The observations about deregulation of banking and other points made by Gusi etc are well taken.

The good fortune of this government has depended on many factors, some of them quite by historical chance as Gusi has noted.

1/ WE WANT A PEOPLES BANK !

2/ WE WANT ADEQUATE FUNDING FOR HEALTH CARE !

Without the first, we will be desperately in need of the 2nd, due to stress, overwork and poverty.

There are limits to how much you can dig out of the ground, and when its gone...its GONE for GOOD.

Peter.. you would be aware, I'm sure, of King Hezekiah, with your Christian background.. remember his response to Isaiah the prophet who told him the disasters to befall Israel from the Babylonians would not occurr in his lifetime ? He said.."Ah.. the word of the Lord is GOOD" for he thought it will not happen while he is alive.

What does it profit a man or a nation, if it digs its future from the ground, and sells it off for short term gain, and loses its soul ?

Selling of capital items might make a profit and loss report look very good for those greedy shareholders and give justification for the CEO's bonus this year, but the balance sheet tells the real story.

'Ellaborately enhanced technology' ? as if this is a hope for our future when China is producing 35,000 engineers a year... do they know nothing about value adding ?

My sincere advice to all who can do it is this: (As I've done)

Buy up at least an acre or 5 somewhere u can be self sustaining if need be. Make friends with Italians and Asians who can usually extract 10 times the produce we can from the same land, and seek as quickly as possible to become debt free.. things are going to change.... and I wish I could say 'for the better'.

P.Costello-be Honest and tell the People of Australia the Truth -the Economy has been good because of the Previous Reforms put in place by Hawke-Keating -Administration -You P-Costello and J-Howard -must once and for all stop Blaiming someone-else for your Mistakes you been there for 10 Years -i think 10 years to many -by the way P-Costello i feel SORRY for You -J-Howard has been treating you with Contempt --i voted Conservative on Many Occasions -but i am beginning to DISLIKE J-Howard he is a greedy insensitive-kind of a MAN.if 5-Years back had he decided to step down and let you run the SHOW my views would be different P-Costello i really think you would have been a Good P-M -without the influence of a greedy man like j-Howard the man is very SELFISH-good luck old PAL

Sneer boy how are you. What a puffed up fellow you are.Are you still a fully paid up member of the HR Nichols society? That society committed to ongoing wealth creation for the already wealthy.How many other Govt's have former Leaders and Ministers who tell the world the current crop have made them ashamed of thier country? Your legacy will not be good Pete. Your recent IR activities will rot the fabric of our society over the next 10 years.

That will be your legacy, the creation of the working poor.A public Health system that will not meet the nations needs. A public education system that will not allow us to be a smart nation. Dishonesty and spin as the hallmark of Govt.

In different times it would be off with your heads. PS: How is the war going and how much has that cost?

At least he is not bitter and has to lay blame.

Do you think by your savage words you will get your point through? I bet you would not say it standing in front of him.

That spit by some of you was to make yourselves feel better, not to assist Peter with your insight.

Thanks folks for confirming there are plenty of whingers out there who need a scapegoat for their own misery.

Realist,
I would be happy to say it to his face, I would even visit his "loony" pentacostal church at hillsong, to ask him. My problem is twofold, firstly I exist on a disability pension {not live} secondly the "goat track" Sarina to Cairns section of the National Highway remains un-upgraded since 1985, even with Pete having $17 billion in the bank.

National infastructure has been sacrificed to obtain a huge surplus, Government debt is down, personal debt is up at $400 billion, does that indicate anything to you mate?

Pete, I have a great deal of patience, however a growing number of North Queenslanders do not, three coalition seats up here could go if you don't come up with something very quickly.

Oh i would say it in front of him. realist?? What nasty words? Where is there any inaccuracies in any of the postings. Is he not puffed up?
Does he not constantly sneer? Is the HR Nichols society not about screwing the worker into the ground? Is the unlawful invasion on dishonest grounds of a sovereign country not costing us a motza? Has a previous Liberal PM and Minister not told the world how ashamed they are? etc etc, Realist they are the worst Gov. this country ever had and they have as thier Parliamentry companions the worst oppossit ion we have ever had.

i Agree the present Administration in Camberra is the Worst we have seen for a long time but unfortunately the Opposotion is not Effective and the People in general are very Gullible .

OK Peter Costus Fellow.Show us some real courage.How about some real tax reform.Simplify the whole system to make our businesses more competitive.Both the State and Federal Govts are killing us with red tape,regulation,tax,and litter gation lawyers,that create markets for insurance companies to destroy productivity.

How about some real reform of the Public Service to stop all this waste we experience in NSW;and while we're on the topic,I can't believe the nonsense that has eminated from Peter Debnam's mouth today.He was asked the question by business person to name three things he would do to set this state straight.Peter Debnam attacked the questioner.He virtually told him that ordinary folk don't have an interest in politics and to get a life and don't ask such silly questions.

Well the alarm bells are ringing in our state and those few words of arrogance have virtually sunk the Liberal's chance of power in NSW.If you cannot listen to the people then we will vote for lame independants rather then being treated like mushrooms.

Mr Costello

Thank you for your article.

Please do something about the Mental Health/Illness budget. The current situation is apalling and suggests to me that yourself, the Prime Minister and your colleagues are in an extremely deep denial continuum.

1:4/5 people are likely to develop a mental health problem during their lives. You know that as well as I do. Politicians and their families are not excempt from mental illness. If you or a member of your family requires scheduling or regulation because of a severe mental illness episode, the private health sector will be of no value to you. You will be taken against your will (more than likely)to a public psychiatric facility. That is mental health and the law. You and your family will not be exempt.

Mental illness has no boundaries.

Please re-think the deinstitutionalisation process. The 1984 NSW Richmond Inquiry and related recommendations were a disgrace and remain so - which of course have been adopted with variations in all states.

People with long term mental illness need asylum (a place of safety). No longer do they have places of safety. They are on the streets and homeless, or they are in prisons. Few are with family or friends - since their loved ones usually do not have the money or skills to help them. This is a national disgrace.

Community mental health resources are scant. Simply, this is just not fair.

Clearly, there are no votes in relation to mental illness. But, heaps of votes in trebble by-pass operations, IVF and RU486 - each of which in my view, are mostly selfish options in comparison to people who have no choice about being landed with a severe mental illness.

It is good to see you on OLO. I hope that you reply to at least some posters - especially me! I think the GST is bloody awful - and the IR laws are a bloody disgrace.

Cheers
Kay

PS: I am broke. My husband was retrenched the day he returned from Christmas holidays. He is still looking for work. Any chance of a loan Peter?

"Yes yes I know about elaborately transformed manufacturing growth exports etc, but our exports are underpinned by a removalist industry - shovelling Australia into ships and the income directed to an overblown, low skill, low value added real estate industry. If you like, exchanging resource for bricks."

Sadly, the Federal government's "resources for bricks" export strategy has not attenuated the worsening of Australia's chronically high current account deficit and the accompanying high levels of net foreign debt. Australia's "miracle economy" is only being sustained by the goodwill of foreign creditors. If the current trend continues unabated, we will exhaust our ability to finance the gaping current account deficit, and that vital foreign goodwill will quickly dissipate. By that stage, Peter really will be singing for God's help (and redemption).

Australian Miracle or Mirage?

Part 1
Australia is a low interest rate nation isn't?

Wrong, our interest rates are significantly higher than most OECD nations. 10 yr govt bond rate for Australia is 5.27%, Sweden is 3.39%, Denmark is 3.45%, the Euro area is 3.46%. I will leave any comparison with Japan out because of specific issues to counter deflation in Japan.

Well our economy is grower stronger than most isn't?

True we have had good growth but the current growth rates do not match countries like Denmark and Sweden. Ours for 3rd quarter was 2.6%, Denmark was 4.8% and Sweden was 3.4%.

What about inflation?

Ours was 2.8%, higher than the Euro area 2.4% and 0.6% in Sweden and 2.1% in Denmark

What about unemployment?

Our rate 5.3%, Sweden 6.1% and Denmark 5.1%.

People investing in Australia get better returns don't they?

Australian stockmarket went up by 11.6%, Denmark by 26.2% Sweden by 15.9%

Why are how interest rates higher than most other countries?

2 major reasons, firstly the high current account deficit -5.9% of GDP compared to Sweden +13.5% of GDP and Denmark +3.2% of GDP and the Govt Industrial Relations policy.

The govt has created a system where wages are going to be determined solely on supply and demand, there will be no overt regulation or institutional policies to link wage increases to labour productivity.

Exogenous shocks such as a resources boom coupled with historic underinvestment in skills formation by both the public sector and private sector means huge labour shortages with the only immediate term solution being higher wages and skill reductions in other sectors of the economy, hence less productivity and less competitiveness. Wage growth in Australia was 6.1% this is significantly higher than inflation + labour productivity.

What does this lead to?
Either higher prices or lower profits.

Part 2
What about our huge surplus?

Many commentators think the higher the surpluses the better. This is juvenile, a bit like schoolboys comparing the size of their manhood. In the enlightened would we all know it is not size that counts but how you use it.

So too with budget surpluses, what it is really demonstrating is a juvenile approach to national development. Infrastructure investment is needed to advance the nation and allow economic growth. Hoarding public finances to pay debt early does not generate any future income. In other words it does not lead to a bigger or tastier pie.

The Costello Years will be remembered as the squandered years. Surplus accumulation through high taxation to pay off debt without creating additional national value.

Slasher,I'll think you'll find that NSW which makes up nearly 40% of Australia's economy has much to do with our poor growth rates.Much of this is due to the excesses of the Carr/Iemma Govts;but that aside,you are right about interest rates.We tend to keep interest rates high to draw in foreign capital since we buy more than we sell.The negative side to this is low growth.Our greatest burden is that we don't export enough to support the excesses of our lifestyles.Foreign Debt is now half our annual GDP.It will come home to bite us one day.

China on the other hand has 10% growth and keeps it's Yen artifically low to sell more and thus get more foreign capital.You cannot export manufactured goods to China without copping a 110% tarrif.Even second hand items have a duty equal to that of new products.Raw materials have no Govt tarrifs.A foreigner cannot buy land in China or Japan yet we sell of anything we can lay our hands on to live for the moment and have no protection for our primary industries.

Now we wonder why few can afford housing in Sydney with foreigners able to buy anything they want.If China in the future gets enough foreign capital they'll just buy our entire country and not a single bullet will have been fired.

I say it's time to get people off social security,reduce taxes and get all of this country working again.The middle and working classes are sick of being slaves to to the excesses of our socialists Govts.

Arjay,
Yep sell, sell, sell....greed, greed, greed...

Kay,
If it's one thing you can't acuse our learned collegue of it's not doing anything about Mental Health, only 2 years ago, he and his musketeers cut State Health funding by almost $1 billion, what more could you possibly want from a government with a projected budget surplus of $17 billion?

[Deleted for flaming and offensive language. Poster suspended for 14 days. Second offence in one month.]

Slasher,
"Australia is a low interest rate nation isn't?"

It's better than the 20 or so % it used to be with Keating, he sent us broke.

Peter,
You and/or John Howard will be around for a while yet.

Keating was the Architect who initiated all the good reforms so that at Present Peter and J.Howard take all the Credit for the good Economy of this Country but there is no Gold on the Streets of Australia the Rich are Getting Richer and the Poors pay Tax because there is no way out but the Wealthy can get around and pay little Tax 10Years of Peter and John over 3million people live in poverty one million children live on the Streets of Australian Cities The Tax System is in bad Shape we pay the GST plus all the other Taxes Immigration in need of Urgent Reforms Education under John and Peter in very bad Shape We are involved in a War in Iraq and Afghanistan is Clear no one or any Countries will ever Win ? But J.Howard keep Beating is Chest Telling the People of Australia that is Doing the Right thing and Peter what Happened to the 17 Billion Dollars you tell us you have on the Side ? how much does the War Cost Australia ?
i suppose that is the Legacy we get from John and Peter 10Years in Power ? far to Long that is no Democracy that is more like Dictatorship .....thankyou for Listening......

ozevic

I think I find much merit in what you have to say, however 'texting' your post makes it hard to follow. Could you please use more conventional methods of writing.

Thank you.

Scout what i mean is that i wouldlike to see 4years fix term elections 10 Years under the Present Administration is far to long for any P-M..j.Howard had Plenty of Time to make a Change but he did NOT.

Some of the major issues with Australias economy at the moment and into the future I see are:
- the effect of Imminent peak oil.
- the effect of the retiring baby boomers on withdrawal of savings and investments from the stockmarket and real estate market.
- the current account deficit and debt owed to foreigners.
- high household debt and the very low/negative savings rate.
- inflation of the money supply by the banks (over 10%pa M3 growth) and the destortions it has, is and will create.

I support the government paying down the goverment debt. The government is in a much better position than the US. I also think though the government should work on trying to make people live within THEIR means, like Peter Costello is trying to make the government do.

Slasher says
"Hoarding public finances to pay debt early does not generate any future income.", but I say paying it down early or at all will reduce expenses, requiring less income to offset it.

geoff, isn't it great to have no ambitions or outlook. You prefer a high taxing govt slugging mums and dads to pay debt to foreign bankers early rather than investing in the nation's future.

We are in the middle of a resource boom, yet as a nation we are not opening up the Surat Basin coalfields. We have a second rate or maybe 3rd rate telecommunications network that does not deliver real high speed broadband hence less economic opportunity. We have an underfunded national road system which places extra costs in moving goods. We have a fragmented rail system which again places costs on industry. We have chronic underinvestment in research and development which reduces productivity.

But do we want to fix just one of these issues that will dramatically increase the national wealth, no the costello way is pay money to overseas bankers.

The Government debt was small, servicing the debt has never been the problem. As our infrastructure becomes outdated and falls apart don't worry our small minded leaders have ensured the foreign bankers have got their money and all will be well.

Save us from small minded suburban lawyers and accountants.

Slasher, you are correct in pointing out the federal government's woeful and chronic underinvestment in this country's economic infrastructure. As for the much-heralded reduction of national debt levels, the extract below debunks some of the Howard/Costello neo-liberal spin.

"There is an alternative story for Australia's economic performance over the past six years and it goes like this: government debt has been switched into private debt via the sale of about $58 billion of public assets. The household sector has borrowed from the banks to finance the purchase of Telstra, the Commonwealth Bank and other privatised entities, as well as property and other financial assets. The banks borrowed from overseas to finance the growth in household borrowing.

This activity has helped generate asset price inflation which, together with low interest rates, has encouraged households to increase their level of debt from just under 90 per cent of annual household disposable income to just under 130 per cent of household disposable income.

The household sector is mortgaged to the hilt.

Because most of the build-up in foreign debt is owed by the banks, the debt is effectively government guaranteed by the taxpayer through the Reserve Bank.

The sale of government assets could be justified if virtual government was efficient government. It isn't.

It is madness to sell off high-yielding assets to pay off low-cost debt. What household or business would sell fixed assets and then lease them back over 30 years on an indexed basis, which leaves all the risk of ownership - and none of the benefits - with the vendor? This mad accountancy is obsessively pursued in the name of budget surpluses."

Full article:

http://www.theage.com.au/articles/2003/03/12/1047431094435.html

Peter I want to bring you back to reality, like Tony you are a member of The Liberal Party.

So how can anyone believe what you write is your own personal opinion and not written by the Howard Government spin Doctors?

Also it is good that we have this forum, as without it the only answer people would get from the likes of Tony and Peter are standard templates reply and before people especially the Howard Supporters reply, they should know the facts, I am not a member or supporter of The Labor Party at Federal, State or Local Level.