Where is Costello's debt truck these days? In 1995, Australia's foreign debt was $193 billion. Today it's over half a trillion dollars. The current account deficit is now permanently in "banana republic" territory. Interest rates are consequently among the highest in the industrialised world.

The Coalition loudly protests its innocence - "Hey, we paid off Labor's public debt through the privatisation of high-yielding assets", "Private debt is not our problem" and "The CAD is the private sector's fault." Pity foreign creditors and investors don't distinguish between public and private debt. Simply put, our prosperity is more vulnerable to the whims of foreigners than ever before.

So what could the Government do? First, admit that the Australian economy has a long-term structural problem and is living beyond its means. Rebalance Australia away from debt-fuelled consumption towards exports. The IMF and even economists within Federal Treasury have advised that in order to stabilise net foreign liabilities, Australia needs to reduce its CAD by at least half to around 3% of GDP. In order to achieve this, Australia needs to start running trade SURPLUSES of around at least o.5% of GDP. Yet, imports are still racing far ahead of our stagnant exports, adding billions in debt.

Rather than provide an assistance policy and taxation framework to accelerate export growth in high-value added sectors like manufacturing, Howard-Costello are drunk with complacency and asleep at the wheel. They are more intent on improvidently providing tax incentives to funnel capital into areas like the property market which has zero capacity to contribute to the servicing and eventual repayment of our ballooning foreign liabilities. Combine this with large-scale Federal disinvestment in areas like human capital (education/training) and infrastructure and we've got a looming problem.

As Costello himself said in 1995: "Australia has a high foreign debt, and because Australia has a current account problem, that puts premium on Australian borrowing that flows through and every Australian pays for the consequences." Pity that he doesn't even mention the CAD these days, despite the fact the CAD and net foreign debt is at an all time high.

There is a old saying. "If you owe the banks $10,000 it is your problem. If you owe the bank $10,000,000 it is their problem". It seems that some people think that a 500 billion dollar debt in a 1 trillion dollar economy is really bad. Put this in the perspective of your own finances. It is the equivalent of a person on $50,000 a year having a mortgage of $25,000. Big deal, and whats more because of the huge amount of super invested overseas any run on the Australian dollar would be stabilised by speculators taking advantage of temporary A$ weakness.
I did laugh at the statement "accelerate export growth in high-value added sectors like manufacturing". The Chinese are making sure that manufacturing will be a cut throat affair. It has led to a hollowing out of manufacturing in Japan and Taiwan
Australia's biggest producer of foreign currency is tourism. That is where future growth in income will come from. A billion Chinese doing the bridge climb and cuddling a Koala.

seaweed said: "I did laugh at the statement "accelerate export growth in high-value added sectors like manufacturing". The Chinese are making sure that manufacturing will be a cut throat affair."

Australia spends only around 1.2% of GDP on Research & Development — the second lowest level of R&D investment in the OECD. Gee, I wonder why Australia also has one of the smallest manufacturing sectors in the OECD (and one of the largest perpetual trade deficits to match). It's a self-fulfilling prophecy - we've failed to invest while other industrialised countries with small domestic markets such as Singapore, Finland, Ireland, Sweden, Switzerland, Israel etc. have actually experienced growth in the export of high-value manufactured goods. Is this beyond Australia? No, it simply requires a rethink of the quarry and beach approach.

The claim that Australia could continue as a “first world” economy with an earning capacity based of tourism and mining is a best counter intuitive and at worst ridiculous. How can we expect to gain the products of the hi tech age if we can only dig up and supply dirt to the rest of the world and provide domestic services to wealthy Chinese?

Many countries which we disparagingly call “third world” have been trying to do this for the last one hundred years while for the last thirty years we have be following the de-industrialisation path to “third world” status hoping for no loss in living standards.
The only basis on which we could think this can only be some arrogant pride, how are we better that these countries if we can only supply the world the same products, yes the only explanation is hubris.

In one sense we have been successful it appears that we only pay for about one half of our imports and we are permitted to borrow the rest and even borrow to pay the interest on loans having been doing this for the last 30 years as revealed by the current account data. But many people are hurting and their presence is hidden by deceitful unemployment figures.

The borrowing rate is increasing faster than the “economic growth”.

Where indeed is the Costello and Keating debt clock and when is the inevitable “midnight”?

As far as the issue of competing with the Chinese goes, how can we “compete”, skilled workers in China are paid $50 per week and a slave could not be kept in Australia for this figure? Also we need to develop and not “reverse engineer” products.

The only people who benefit from this craziness are at the “big end of town”, they get to play with our superannuation funds and have no “competition” for their importation businesses.

“For the sake of the sleek importer
we slave with the pick and the shears,
While hundreds of boys in Australia
Long to be Engineers.”
From “Australian Engineers” by Henry Lawson c 1906.

We have already a “Big Debt Truck” it is called Government and its Bureaucracies; Hell with all the internal corruption on Three levels of Government in this country, they will consume more than we generate, let alone have any money to fund what Governments are Constitutionally supposed to do;
I forgot, Constitutions; that only happens in a Democracy; we have the world model of Mussolini’s Fascist State and Looters/ Witch doctors in the positions of authority.
That explains a lot.

We are under Enemy Occupation Australia. We are not young and free; we are suppressed and intellectually terrorized to submission. and have become the new slaves of the Useless Idiot incorporated.

We are manipulated sheep

It would be interesting to see Oligarch’s economic credentials. “The Australian economy has long term structural problems”, he says. How does he know? Most of the debt is private. Why should the Government not say it is not their problem?

The economy of this country has never been in better shape, yet some anonymous person pops are and presumes to tell the Government what to do.

If this Oligarch character is so smart, he should be in Canberra, not wasting his time posting here