Wayne Swan is promising a budget surplus for the 2012/2013 financial year. I'm not sure why he is bothering.

At just over one billion dollars it is a rounding error away from being obliterated. It is a small target, so will be very difficult to hit, and even if it is hit, what real difference will it make to fiscal settings?

Most financial commentators do not expect the surplus to be achieved.

Worse, to hit it the government has played around with the timing of various expenditures in what economist Saul Eslake calls "financial chicanery".

This is a government that is portrayed as dishonest, incompetent, over-promising and under-delivering. Wouldn't it have been better for Swan to say "Sorry, we've done our best, but a surplus is just not going to happen this year" rather than to have expended more political capital on what is going to be a fairly unconvincing debating dot point?

He would have been derided by Joe Hockey "this government will never have a surplus", but the commentators would have mostly been on side.

And from what I can see, most voters won't change their vote on this issue.

I absolutely agree, Graham.

It is surely the most unnecessary, transparent and mendacious piece of political posturing that we have seen for a while. And that in itself is saying something.

This government has turned self-delusion into a fine art. Meanwhile, the opposition has turned the conduct of cogent debate into a primitive form of schoolyard name-calling. Together, they have made it impossible for the general public to determine a factual basis for practically any issue you care to name.

We deserve better from our political class.

Wrong Pericles.

We deserve what we get from them, having voted for them all.

They reflect the lack of interest in what goes on, and hope they appeal to those who 'care', the ever busy lobby groups who fund campigns for them or against them.

If you doubt this, is there a politician you'd piss on if they were on fire, to help save them?

That said, this latest bluster from Swan is just that.

We could save billions by not letting the Defence forces order anything that was not already working, and by taxing the burgeoning religion industry, which remains totally tax free and bludging off the community for all they are worth.

What happened to tax reform?

Surplus = total irrelevance!

im surprised at you grayham for even asking
heck it gets all the 'other' news off media attentions

its all majic trickery
watch this hand..[so you cant hear what the other hand is doing

its like john howard everytime he hit the wall
he built a new foundation for the next wall

something about a billion gifted to a mate
being a smaller number
than gifting 10 billion water buyback to party mates..

[the latter being more news worthy]....
media chases the bigger number..and uses the info its allready got..[media managment]..re direction its the name of the game..spin it

but heck who cares

children over board
PARENTS TRYING TO DROWN THEIR KIDS..!

exclusive scooop
[what you dont care for kids
being drownd [thrown overboard]..by their parents?

i liked bob browns idea better
end the fuel subsidy to miners

12 billion right there
cutting education is dumb

I think we are agreed that hitting or missing a surplus by a small amount this year is irrelevant to the country's fortunes however I would have thought it is pivotal to the fortunes of the PM and the Labour Party.

What Joe Hockey says is also irrelevant rather it is what the Murdoch press including the likes of Bolt and his ilk do with 'yet another broken promise' that would be of greatest concern to them.

Waving my little antenna around our little country town even some rusted on conservative voters are showing unease with the one-sided press coverage, particularly from the Sun/Herald.

I think the government has little choice in the matter.

Why it is important for the Labor Government to achieve a surplus. Nothing to do with economics, or what voters think. Labor have this paranoia that those that run society are out to crucify them at the drop of a hat, probably true, they have the money and the media power to do it. Labor has to demonstrate that they are 'good n#####' when in Government. Swan has a striking resemblance to Al Jolson, should hear him sing 'mammy' to big business.

I'm not an economic expert and all this talk about
surpluses is not something I can discuss with any
great authority so I'm not sure how important
Wayne Swan's surplus is economically. But politically,
even I can see that it is a big deal indeed. As Ben
Eltham in his article on the 29/11/2011 in New Matilda
points out:

"With its refexive bleating that all deficits everywhere
are always bad, the Opposition has long exploited misconceptions
about economics widely held in the Australian media and
citizenry. Rather than try to educate voters, the
Government has instead staked much of its economic credibility
on returning to surplus next year. It's becoming something of
a milestone around its neck."

The author also tells us that:

"On the other hand, if Swan can get over the magic
plus-minus line, it will blunt one of the Opposition's
best talking points, and buttress the Government's economic
standing leading into the 2013 election year. In the meantime,
the Reserve Bank might even lend a hand by lowering interest
rates another quarter of a percent. I'd say that's exactly
what Wayne Swan is writing away to Santa for."

Of course if events in Europe take a disastrous turn and
we get another global credit crunch, a plunge in world
markets and some serious repercussions in our own economy,
then as Eltham points out
"even draconian governments cuts won't be enough
to keep the budget in the black." But if Europe can
muddle through, as the government is hoping, then according
to the experts, there's every likelihood as Eltham tells
us that "Swan will be able to announce his first surplus on
budget night next year."

With a sovereign currency the deficit (and Federal Government borrowing) is irrelevent whilever there are unemployed resouces in the economy.

The finances of Greece,Italy, Spain etc are a problem because their currency is not a sovereign currency but the Euro.

In Australia at the moment private debt is about 160% of GDP.Why is the government debt considered a problem when that private debt isn't?

The purpose of government borrowing is fund employment generating infrastructure improvment when there is unemployed capacity in the economy or to dry up funds in the economy when inflation is a serious threat or industrial activities and employment have to be directed to a different priority such as occurred during WW2.

One big problem facing Australia is the size of the private borrowing of overseas funds. If The $A drops substantially many private borrowers, including Australian banks will be in trouble. If that happens we should do what Iceland did, let them pay the price of their own stupidity.

Banks have been borrowing overseas to fund an inflation bubble in housing, a policy accepted by the Howard/Costello Government and not choked off since even when it should have been when the GFC hit. That policy has priced housing out of the range of most of the young.

Federal debt is a problem because the opposition says so. Can you imagine the hoo haa if a surplus is not delivered. That would play right into the hands of the coalition, Toni has been on about the surplus for two years, so there aint no deal thanks, like there will not be any stimulus, thanks to the opposition. When times are tough the populous turn toward labor, because they know labour looks after the family and the workers. The opposition has destroyed that for this term of govt; It was never going to be easy with a hung parliament, so keep your head down and no looking side ways.

Foyle:

# Banks have been borrowing overseas to fund an inflation bubble in housing, a policy accepted by the Howard/Costello Government and not choked off since even when it should have been when the GFC hit. That policy has priced housing out of the range of most of the young. #

...That is unlikely to change any time soon, with Australia rated AAA by Fitch, Standard and Poors and Moodys. Banks will continue to rob and plunder…but here is some good news, the bank across the road from me was robbed at 2.30 this morning. What a joy and privilege it was for me to witness the whole glorious event from the upper balcony. (I lacked the nerve to “cheer”).
The country being so devoid of infrastructure, played out beautifully with only two policemen per 500 squre klms; robbing a bank is becoming as simple as a banks ability to rob us: Poetic justice I believe!

Lexi, The treasurers problem is that he promised a surplus for that
2002-2003 year when everyone was saying it was too dependant on China
and the price of iron ore & coal.
He insisted that we would get into surplus by then.
By creative accounting he has managed a waffer thin surplus but if
he had come out and said, we won't make a surplus for these reasons
it would have at least been honest.
Unfortunately political pride got in the way and he fiddled the books.
They shifted expenses out of that year and moved income in.

A deficit is not necessarily a bad thing just as a surplus while nice
to have is not always essential.
I suspect it is a guilty conscience that has brought on the fiddle.
Every since Barnaby Joyce blew the whistle on government borrowing
they have been very touchy about debt.
I think probably Wong and Swann are chewing their fingernails over
the debt but the cabinet keeps throwing money around like a drunken sailor.
We are about to lift the borrowing limit again above $250 billion.

foyle quote/...''In Australia at the moment
private debt is about 160% of GDP."""

yep good point
but ol barnaby got screamed down
when he started taklking about state debt

then for qld alone[with the same populationas greece]
at 65 billion...turning over in 2012 to 75 billion

and them selling state forrest for only 800 million
[35,000 hectares less than one hour from cbc city center]

had they been subdived..and sold as housing
[future housing..after harvest of the forrest]
the sale of 35.000 hectare blocks alone would have cleared the whole debt

instead they got only..less than 4/5ths
a billion..[800 million]

barely covering partial intrest

[quote]
Why is the government debt considered a problem
when that private debt isn't?
[/quote]
cause the states are broke
selling off the peoples assets for pennies
whiole bailing out their party mates

[like the half a billion peter beaty gave
to make a magnesium plant in gladstone
topped up with another half a billion from howard

for a plant that never got built..!
the billion went direct to those shareholders
who bought into nice easy govt cash cash scam..name names

anyhow i heard that there is two fiffernt 'debts.
those official govt those held by govt dept
recall the loans on power to give giovt ursury payments on the state odious debt

odious debt is ctriminal
investers loose

but wait..we can get more
govt debt to bail ya out mate
and ya still get ya xmass bonus

if your NOT a peon
ie too big
to allow..1%..you..to fail

mates rates wearing blacksuits
when they should be wearing stripes
for their *treason..to the people AND..*their estates

get their trust funds
tax THEIR..transactions

not just smokers*

About all a surplus achieves is less money for infrastructure. To grow you borrow money. There is no problem with that, Au economy is in excess of 1 trillion $, Your 250 million $ is some what meak, baz.
Countries and businesses borrow money. It's not essential for govt; to show a surplus, we do not have share holders. But toni is hell bent on a surplus , so be it. Some will miss out.

Getting into surplus is not vitally important. The failure to keep one's word of which this Government have become masters of is the main issue. How can you expect the general community to tell the truth when much of what this Government says is not. What makes it worse is that right from day one they really had no intention of doing so. I think it was Peter Garret who summed it up that they would say anything to get into power and then do what they want once they got there. The deceit is the issue not the deficit.

579 said;
Au economy is in excess of 1 trillion $, Your 250 million $ is some what meak, baz.

It is not $250 Million, it is $250 BILLION !

It was raised by parliament from $225 Billion to $250 billion earlier
this year but has now got up to $237 billion last I saw a month or two back.
The government is increasing borrowing at around $2 billion a week.
See office of financial management web site.

Let us remind ourselves for a moment of the essential nature of a budget surplus.

It happens when the amount collected in taxation from businesses and from the citizenry in general, exceeds the amount required by the government for its own purposes. A surplus can also, of course, be engineered, or at least helped along, by cutting public services.

It would therefore appear that we have come to regard excessive taxation and niggardly government spending as virtues, in and of themselves.

How did that happen?

And you're looking only at the end result, the Blue Cross, and ignoring the process. My suggestion was that we deserve better from our political class, to which you observed...

>>We deserve what we get from them, having voted for them all.<<

The only people voted for are the actual politicians. I was suggesting that we are let down by the entire political class, from the sleazy pre-selection processes, compulsory voting that forces you to choose between individuals that you wouldn't feed to your cat, through to the corruption of lobbyists, special interest groups and rent-seekers.

All of whom seem to be able to award themselves any amount of our money, whenever they feel like it. Subject of course to token input from tame "consultants", who are paid squillions to deliver a report that concurs with the public servants' own estimation of their value.

A plague a' both your houses! I am sped.

Dear Bazz,

Again I'm going to quote from someone who knows more
about this issue than I do. It's from the article I
cited earlier. Here goes:

"Step back from all the sound and fury about
budget surpluses and the European debt crisis
for a moment, and have an unbiased look at the
latest Treasury's figures on the health of
Australia's economy."

"Unemployment is expected to peak at 5.5 per cent next
year, and remain at that level into 2013. Inflation will
be 3.25 per cent. Wages will grow at 4 per cent. Consumer
spending will grow at 3 per cent, and the economy as a
whole at 3.25 per cent. These are figures that would make
finance ministers in Europe weep. The Australian economy
is growing. We're adding jobs and keeping unemployment
low, consumers are still spending, and inflation is modest.
And yes, the budget will return to surplus."

They may not be an outstanding set of numbers but they do
show that Australian growth will be moderate instead of
booming - but in comparison to our Northern hemisphere
trading partners - as the author points out - "they're
almost utopian."

You can argue that our economy is not enjoying the frothy
exuberance of 2007. But you can't argue or deny that this
is still a world-beating performance and the fact that our
economy is ticking along nicely. These figures suggest that
this could be the best Christmas for retailers in several
years. BTW: - It is predicted that Australia will be one
of the only countries in the OECD to enjoy a balanced budget
in the near future. I'm afraid that few people would take
what Mr Barnaby Joyce says about numbers very seriously.

That is what i meant baz, every thing else stands. What causes trouble is when borrowings exceed income, as householders would know.
Runner peter garret was referring to the coalition, trying to bribe the greens , to gain office at any cost. The greens do not trust toni, you could say.
We have the worlds best treasurer at the volt, so there is nothing to worry about.

Well, yes, lexi...but do you suppose the Australian economy can remain immune to the fallout from the second round of the GFC?

http://www.abc.net.au/news/2011-12-1/central-banks-to-save-international-markets-from-eurozone-criis/3705454

Getting a surplus is much less important than how it is achieved.

I have no doubt that any surplus achieved by Swanny will be a smoke & mirrors job.

Lets face it, he only has the job because he's too hopeless to be a threat to his boss, this one or the last.

Lexi;
Everything you quoted is correct.
However don't confuse surplus and deficit with debt.
Deficit adds to debt if the spending it represents is paid from borrowings.

Don't knock Barnaby Joyce, he got made a laughing stock when he said
there was a risk of the US going into deficit, and he muddled billions
and millions.
He is the one laughing now isn't he ?
Other countries debt cannot be compared directly with the Commonwealth
governments debt because it does not include the states debt.
From what I have read the total Federal, state & local government and
their related functional organisation debt is something like
$700 Billion !
Getting near the magic $Trillion.

Just checked a couple of figures, I said;
but has now got up to $237 billion last I saw a month or two back.
That figure is wrong, it should be $219 Billion. It will hit the $250B
ceiling sometime next year.

Also when I said the US was at risk of deficit, I meant Default, ie
the point where they cannot even borrow to pay their bills.
You might remember the cufuffle earlier this year about their default.
It is still a possibility. Their debt has only got bigger.

Very strange, the solution to debt seems to be borrow more money, hmmm.

2007 and Labor, my party rode in to government on the back of Kevin Rudd.
In truth he carried some real dead weight over the line.
No one could have forecast the GFC.
Kevin was as he said, a fiscal conservative.
He helped by not just Costello's and Howard's full coffers but Ketting and Hawks ground work, [worth noting the opposition said we would go bankrupt because of Labor changes they rode on] .
Labor was/is tainted by hight interest rates and tall Paul's rat bag words the recession we had to have.
This overly cautious plan is to stop the conservatives claiming Labor can not handle the economy.
Disagree?
I hold the view, much as csteele has said, the NO coalition, its media Friends are wearying Australia.
As hard as it is to believe, mid next year if Gillard walks in front of that bus Labor is a real chance of a come back.
Ugly lies will not forever cover the truth Abbott is a far better trick cyclist than leader.

Dear Poirot,

Re-read my posts. What I said was that if something
disastrous should happen in Europe, we can expect
another global credit crunch, a plunge in world
markets and of course some serious repercussions in our
own economy. Then all bets will be off. However, if
Europe can muddle through, then there is every likelihood
that Swan will be able to announce his first surplus on
budget night next year. In the meantime if the Reserve
Bank lends a hand by lowering interest rates - that
would also help. Finger-crossed that things do work out.

Joe Hockey said our DEBT was 120 billion, The treasury [ I have relos in ACT] sez it's 189 billion. Thats twice the debt / head of population than the USA. If the interest rate was just 1% and we used all the supposed surplus to just pay off the interest; it would take 180 years.
If we had a surplus of 2.4 billion every year, AND we used all of it to pay both interest and principle, AND we didn't have any ecconomic problems - it would take 42 YEARS! to pay it off. Technically, labor has bankrupted us and even if Mickey mouse was the PM, we haven't got a hope in hadies of paying the debt. For this, the PM and her cronies should be indited for treason and sent to jail.

pepper,

U.S. public debt is over 15 trillion which is 100 percent of annual GDP. U.S. public and private debt combined is 54 trillion for 312 million people.

Pepper, you figures may be a bit old. It is rising at about $2billion
a week, so it does not take long to be wrong.

The US debt is much worse than ours. If our debt was proportionally the
same as the US's no one would deal with us and we would be down the tubes.
They get away with it because their currency is the world reference.
However when it finally does crash buy gold !

I am sure I am not the only one who is more than aware some comments are quite wrong.
Some grab their opinions with the hot coffee and newspaper each morning digest both fast, and get the expected results,bad taste in the mouth and not much else.
Question.
If Doctor NO Tony Abbott was PM.
And if he bought in such a figure would some opinions change?

ol swannie rivers problem is
he neds to sustain the myth

so we all got it fixed into our minds 'debt free'
to hide all that other debt

its a clever destraction..of fact
much like that other topic based on lieds of global warming..lied to us with science....[just like they lied re smoking and evolution]

just like grading agencies lied
just like economists lied

just like politions lie

lie down with any
its like lying down with dogs

they all got fleas
and now they are getting a huge wage boost too

but of copurse they dont give it to themselves direct
but via a group who;s wage is based on what polies get
and pensioners get

and the under employed
well stuff em
this is capitalism

eat the weak
bailout the rich

police the poor
protect the thieving rich

lexie you mentioned noam chonshy
he was on big ideas a few days ago
http://www.abc.net.au/tv/bigideas/

http://www.abc.net.au/tv/bigideas/stories/2011/11/29/3378072.htm

i wish they would run one channel
just for replaying big ideas programs all the time...in full

for those who never heard of the guy
watch the clip

he is saying what many need to know

sure he is wtong in a few things
like his cause of jap surrender in ww2
it was the ruskies massing to invade japan..
that they surrenderd to usa

but his naplaming japs..killing 20 million
thats true...[it wasnt people dying from bombs[not even atyom bopmbs
it was that the elites..would loose their illgotten booty to the ruskies]

but heck the rest of his stuff is spot on
and the research has only just been done...[i think i heard that on big ideas too]

Dear Johan (OUG),

Noam Chomsky has always been a bit of a
controversial figure for his outspoken
views. He's raised issues that many were,
and are, not eager to discuss. I'm glad
that you found what he had to say worthwhile.
To me, he's always been a significant
voice in the debates of our times.

i must say
this sounds a grand plan

How Iran Can Collapse All of the Bilderberg Banks and Governments
By: Chevaux
http://vidrebel.wordpress.com/2011/11/29/how-iran-can-collpase-all-of-the-bilderberg-banks-and-governments/

All the Iranians have to do is to announce the purchase ten billion dollars in silver and ten billion dollars in gold over the next 90 days.

If the Iranians wanted to have fun, they would say they absolutely needed to buy gold because Russia and China will have to publish a gold backed currency after all the other currencies collapse. They will begin by backing the ruble and yuan with gold and fixing their exchange rates.

We do not want to be excluded from world trade. After the dollar, the euro and the pound collapse, we will want to fix our currency to the Russian ruble and the Chinese yuan.

If Americans want to import oil or anything else from overseas, all they will have to do is to buy gold at 2, 3 or 5 thousand dollars an ounce before proceeding with their purchases.

in the light of all the other mess
http://whatreallyhappened.com/

upto and including israel delivering armogeddon
or hoping usa will do it for them
http://whatreallyhappened.com/

i must affirm i like the idea
seeing as my revaluating of coin in line with its traditional values [as if in gold/silver value according to its weight..and average 'market value']

im still peved the bankers and money changers leased it
and sold it into the market....[ie stole it][after they stole the govt banking oversight mechanisms]

its karma
or just adding to the fear/spin
cause they havnt said nuthin

ya gotta watch runours of war
from actual wars

just lok who is doing it globally

its all right let someone else worry about it

Rather than buy gold & silver, buy copper.
It has real value, it can be used to make things.
Gold is too dear to make anything but money, silver also.
However, no matter how bad things get you can make wire, cooking pots,
use it to make bronze etc etc.
The Chinese are buying copper as a store of value at present.

bazz i agree with bying copper [plus nickle]
when i heard a one cent coin contains 5 cents of copper

[i started hoarding them]...

now we hear 5 cents coin
has more that 5 cents worth of nickle in it..i hoard the nickle..

[ok only got a few hundred weight of it..and testing the theory]

see a coin is a promise of value
[over and abouve any real value]

look at a plastic note..[costing less than ten cents in material
yet with 'face values'..of up to one hundred dollars]

thus the real value..of paper is insanely high
and the traditional value of coin..far too low

see traditionally coin
was in gold and silver values
and paper only a promise in value in coin

so inflation deflated the value of the metal coins
and inflated the worthless of the then paper promise in coin

according to the federally constituted governance charter
[the federal constitution]..only gold and silver are legal tender for debt[chapter 5/115]...

ok the gold and silver and copper
have been looted and plunderd from our money
and the historic values..of our coin deflated by colluded thieving

but is morally fair
that the proportuinate values..of the metal coin
versis the plastic..thery are way out of realistic proportions

thus their face values
would need to have two extra 0's added to them
..to bring the real economy..back in line with the virtual economy

coins face values
should represent..their historic values

and the value of notes
should be underwritten..assured...by linking it to something
of consistant value..not able to be thieved through inflation
nor hoarders/investers...wanting to invest in base metal values

but as the current system favours the clever spin
well why the heck chould i hoard paper
when i can hold highly refined metal

thus a one cent coin should equate to one dollar
a five cent piece to five dollars/...etc

but im fine keeping it for its metal content value
because bankers got no concept of face...by deflating our coin-age
they write their own doom..[i refuse to take notes as change..i wanmt my change only in legal tender]

if we all did that
then the bankers would return the fed..back to govt
or go more broke bying the nickle..to mint the coin...who's face values they depleted beyond reason...[they have been untrustworthy overseerers..of our coinage system..thus deserve to loose it]

china russia etc..needs only gold values on face
they can still be only gold coloured nickle

[with true values closer in cupra/nickle
that the 7 cent cost for the 100 dollar bill]

its a a shame people dont know
what the money changers..have done

jesus got it right 2000 years ago
if just his own people could respect that he knew..then
what we know today

well what a wonderfull world it could be