Has logic left our nation?
By what standard do we judge competent governments?
Why are we paying 1 BILLION dollars a month in interest?

DEBT UPDATE
Govt Interest Expense Fiscal Year 2013 in dollars
$12,922,741,407.27

OR

24 fully staffed teaching hospitals
Hundreds of schools
Thousands of klms of roads
Hundreds of bridges
Free childcare
Disabled funding
Small business stimulus
Subsidize power costs for pensioners
Aboriginal housing
Subsidize Tertiary Education
ETC, ETC, ETC

We could have had any of these over the past 12 months, but our money has gone to the bankers.
Thanks Labor….the battlers friend by proclamation, the battlers worst enemy in practice.

Sogy good on ya bloke, I know its the best you can do but good effort.
Follow and learn, the light on the hill is no longer a poor working mans shanty.
Its his home away from home, his second one.
On a few acres his boat and 3rd car sit out the front.
In the battle to get us, me for sure out of that shanty we won, even had some help from our enemy's, Robert Menzies.
We got it a bit wrong in the 1970,s meant well but started an avalanche, today we pay.
But some, your self, and a few in our front bench, want more.
Here is a truth.
Labor is not the LIBERAL PARTY, Libs will, as always, rule for the well off, we must do better.
Our task is first to rule for the country, all off it.
And the hardest, this time imposable, win government, so we not conservatives bring in changes.
A book launched today by Abbott warns every Australian, we are about to understand real pain.
And SOGY you will squeal as much as any one, on confronting the truth, you have been conned/miss lead lied to.

Belly I am so over left and right when what we have is two centralist parties. I am so over personalities which is what Australian politics has deteriorated into. I am so over a BILLION dollar a month interest repayment when I see the number of Australians going to non government aid agencies for help is an all time record.

Regarding my squealing as loudly as anyone when at some stage in the future being confronted with the truth that Abbott has conned me, Belly I couldn’t. All my squealing has been used up by the Labor clowns who have not conned me, they are transparent self serving failures, but I do not look forward to Hockey and co.

Labor just yesterday has shown again with the change in policy regarding backing Israel over Palestine that the clowns led by the Sussex St Ethnic Gestapo rule the roost. Don’t back the Jews because the Arabs here will not vote for us. What if we had more Jews here than Arabs? The Obeid family would be eating kosher tonight.

This rabble of a party has no agenda other than self preservation, nepotism and graft.

Hi there BELLY...

The current events in Canberra have really caught me on one of my 'off' days, thus my mood's a little shakey to say the least.

BELLY, I know you've always supported Labor's original doctrine(s) and values, for this I really have to admire you.

You also know that I'm from the 'Right', deeply conservative all my adult life.

Yet we hear that the two major parties are spending most of their time squabbling and arguing about issues that possess very little currency or importance for us, the general public, the taxpayer, the ordinary people who in effect, pay their substantial salaries and allowences.

It all seems to be a sport, 'catch as catch can' (an old wrestling term), between the PM and her front bench Vs. the Leader of the Opposition and his shadow cabinet. Who can score the most points, hurt the most, degrade and humiliate the most. BUT not actually governing the country ? Why ?

Apropos this business with the PM and her alleged activities whilst at Slater & Gordon; simply refer the whole mess to police. If there's a prima facie case to answer (for anyone), charge 'em ! If not, shut-up and get on with running the country, for which they're all handsomely paid, as previously stated herein !

Australia ! Gee, we must be the laughing stock of the entire world !

The alternatives are not the right ones, have you noticed that the opposition do not put up policies. It is now a stated fact that the libs do not have a policy or any ideas for child care.
CN is an example of a rouge govt;
Abbott 's ideas are exactly the same, they will not support an industry that employs 240,000 workers.
The alternative for this nation would be a devastation, and depression.

Yes 579, we don't know what we are in for, but for christs sake lets cut off the gangrenous arm that is chocking us to death. I've been around for a few governments but this lot are clowns...really, clowns.

o sung wo, gday, it is your right to be you, some of my very best mates are Liberals.
One day my brother will inherit this home, he is red neck right.
I with honesty, think Abbott must go,on this issue he is muck raking.
Turnbull, if re placed in the leaders role makes Labors task impossible.
He is a statesman.
Abbott a much raker nothing less.

PS.

The Libs may not have a policy on child care, but Labor has no money, so any spin policy they think of today is worthless, like Gillard’s word, ask the good member down in Tassie, pokie Pete.

I really thought Gillard was taking a chance when she challenged the nation to take her word over Ralph Blewitt....Bluey wins.

579 old fruit, if we were not paying over 1 BILLION a month in interest we would not need a discussion on child care....it would be paid for. For a BILLION a month we could appoint EVERY child in care a personal nanny. But stupid Labor gives it to foreign banks.....and we have nothing to show for the principal they borrowed...

About the devastation and depression that Abbott will bring, are you referring to his monthly BILLION dollar interest inheritance, or famine and pestilence Old Testament style.

It's quite simple really. if you want a reasonable future you support the Coalition. if you're not interested in the future you support Labor.
I really can't see the dilemma in who to support but then again I am biased towards those who think on occasions.

Labor is like a horse.

It initially looks good, but then runs away leaving a pile of steaming excrement.

Hey 579, no further comment on child care? No further comment on how Labor has the battlers and our nations childrens interest at heart. Tell me more of what Labor is going to do for me and my kids after they send 1 BILLION dollars of citizens money to foreign bankers each and every month sport.

I said Abbott had no policy for child care. He said that him self. To interested in other things. Anything except politics. His only chance has run out.
Nothing has come to fruition.
You would rather vote for someone that can not even tell you what his plans are.
A billion dollars a month, can you substantiate that.
You need more than negativity to run a country.
Abbott and CN are two of a kind, they make Joe look like a saint.

579>>A billion dollars a month, can you substantiate that.<<

God now I am really concerned 579. You asked that as if it is a revelation.

If it is a revelation, then consider why I am whinging about it. As I said we could build and staff 2 new teaching hospitals a month. Gillard has just cut a $40 million cancer therapy subsidy, and we are shipping a BILLION dollars a month to foreign bankers in interest.

It took Costello 10 years to retire the $10 BILLION debt left to him from Keating.

Our current debt is about $180 BILLION, so it may take 90 years to retire it.

579 I don’t care who runs the country, as long as they know what they are doing.

Here is your link for the interest

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

History shows that all significant social developments and all major infrastructure projects were initiated by the Labor Party.

The conservatives only make changes begrudgingly for electoral rather than social purposes and are no more than a bunch of do-nothings who maintain the status quo for their owners and handlers.

Some Labor initiatives that we take for granted are -
National Super, Aged Pension, Workers Compensation, Invalid Pensions, Public Hospitals, Medicare, plan to eradicate Tuberculosis, introduction of running water and sewerage systems, womens' rights legislation, general access to Tertiary education and so on.

Liberal legacies include-
Biggest Trade deficit on record (including the longest run of successive monthly trade deficits), highest levels of household and business debt in history, lowest value of the $Aus, interest rates consistently above OECD average, highest inflation in 16 years, lowest housing affordability, highest personal bankruptcies in 20 years, highest taxing government in history, massive cuts to education while frittering away mineral boom benefits on electoral bribes and so on.

Paying a million dollars a month as a number tells us practically nothing.
To know whether that state of affairs is a good or a bad thing, one needs to know at least the following:
> What is the amount as a % of income;
> can we manage the cash flow;
> Was the money used wisely and possibly in income (present or future)generating ways.
Some of the ways this money might be spent can appear at first glance to be 'Lefty' and wasteful, but in fact may be a good investment.
Or not.
As an example, there has been criticism in these pages in the past, of expenditure on government advertising that is seen as 'social engineering', but particularly in the areas of health, such expenditure may be a wise investment if it reduces health care costs in the future.
Similarly, one can argue whether or not the NBN is the right, or most cost effective solution, but expenditure of billions of dollars in improving Australia's internet infrastructure could well be a highly profitable investment if it helps develop new industries and leads to many more rural jobs.
Borrowing to build a high speed rail system might be another investment worth going into debt for.
I'm not arguing the benefits or otherwise of these projects themselves, simply making the point that debt, if the money is spent wisely, may be very good for our nation.
Virtually every international economist agrees that the debt we incurred in minimising the negative effects of the GFC was a very wise investment and is part of the reason Australia did not even go into recession.
I've run some reasonably large operations, and my Boards would have given me hell if I had not borrowed heavily to invest for growth.
In business, not having debt is called, 'having a lazy balance sheet' and is frowned on heavily by institutional investors.
Anthony
http://www.observationpoint.com.au

Anthonyve>> Paying a million dollars a month as a number tells us practically nothing.<<

It tells me something Anthony; it tells me you are a fiscal illiterate.

The interest that this government pays is a BILLION a month.

Anthony at school have they taught you what a BILLION is yet?

A Billion is ONE million million….get it.

Wobbles you have not got a clue either. Please give some references to your claims. Or have you adopted the Gillard Labor standard of lies and spin.

Anthony I gave you the English BILLION, but there is an American BILLION, that is one thousand million. I will give you some homework. What form of Billion do we use in Australia for govt accounting purposes?

What has an American treasury site got to do with us. All very well to say that debt is bad. Anyone that has never had debt, has nothing. Without debt you do not have a credit rating. Your ability to pay debt is more important than debt it self.
Our debt is miniscule, compared to our total GDP.
All states have debt, without it infrastructure would stall, and so would our economy.
It's not all bad, i would not let it worry me.

Son of gloin,
Your response is why I don't participate in these columns much any more.
You didn't really read my comment and you replied with abuse.
I'm a fiscal illiterate?
Your response is about the fact that a Billion dollars is a lot of money.
Well, I didn't say it wasn't.
What I said was that how the debt is used is more important than it size per se.
Some incredibly wealthy companies have huge debt but as that debt is earning more than it is costing it doesn't matter.
I personally used leveraged investment instruments such that at any point in time my personal liability is in the millions.
However, that money earns me much more than it costs me, so the net effect is that I'm let's say, rather well off.
My average borrowing costs this past year has been around 7.3%, while the average income,(total of dividends plus capital gains) has been in excess of 12%.
In short, I don't care how much I owe when the money is earning me more that it's costing.
But then, I'm a fiscal illiterate.
Anthony
http://www.observationpoint.com.au

579 has it exactly right.
The size of debt on it's own is irrelevant.
It's how wisely the money is used that matters.
Anthony
http://www.observationpoint.com.au

Anthonyve,
I share your frustration with the level of discussion here at times. I too come from a business background and feel you have hit the nail right on the head.
Like you, I have no problem borrowing money, provided it can generate a return. For this reason, projects like NBN may be good investments. But would you not agree that social reforms should not be funded out of debt. Funding social reforms should only be done out of cash flow. If we fail to do this, we seriously threaten the productivity and future sustainability of the nation. For example, I would be crazy to buy all my staff flash new cars to drive around in if it was clear that my business was not competitive in the market I am in. Surely I would have to address things like cost of production, markets, product quality etc. first.

There are some quite worrying signs that we have not done this as a nation. Our productivity relative to the rest of the world is declining. The amount of directly productive people relative to administrative people has become out of kilter. I'm not at all convinced that our total debt has all been used for future profit generating investments.

By the way, 579 does not have it "exactly right". He is merely parroting back some labour spin he heard somewhere. It is just a coincidence that it happens to be a valid point.

Hi ManOfTheLan,
I do agree that funding social programs via debt is usually a bad mistake.
My thought is that the only time it can be justified is when an investment in a social program can show in clear financial benefit in the future.
For this reason, I'm would sympathetic to, for example, funding cheaper education via debt, if the government could show a clear chain from making the investment to having lower unemployment and higher average wages in the future.
Likewise, I think some health programs can be justified on the grounds that a sensible investment now might save us billions in the future.
But I think the we as tax payers should insist that the clear link between current investment and future return is spelled out.
I remember in my corporate days, when I asked boards for money to say, make an acquisition, I had to have pages and pages of spreadsheets, and other detail to convince my board that the risk/return and ROE were satisfactory.
In a way I think that we taxpayers are like shareholders in the economy and we elect politicians to be our 'Board of Directors'. We need to hold our Board to account and insist on clear return on investment calculations before we take on debt.
Of course we should do purely social spending, but, like you, I think this kind of spending, e.g. arts grants, must come from revenue we already have in the bag.
Anthony
http://www.observationpoint.com.au

Ant,

Most economists would differ with you on "The size of debt on it's own is irrelevant." as the larger the debt, the higher the cost of borrowing, and the cost of financing debt at a certain point will choke off the ability to spend money elsewhere.

The premise that debt is worthwhile if it provides income generating assets is a greater problem for labor, as its $260bn over expenditure has left this country with almost no revenue generating assets. Even the NBN is not included in this cash splurge, as its financing was done in ENRON fashion off the balance sheet, and is extremely unlikely to be able to pay for itself.

Juliar's crime is not that she helped some union officials commit fraud, but that her government's wasteful spending will have to be paid for by our grand children.

Anthony, I agree with many of your thoughts, but I can't agree with all of them. So if I seemed a bit direct it is because I started my bleating about a current monthly interest debt of $1 BILLION.

When you opened with "Paying a million dollars a month as a number tells us practically nothing," I quite rightly thought you didn't know the difference between a million and a BILLION, no offense sport.

Hi sonofgloin,
I see the problem.
I know the difference between a million and a billion but evidently my fat fingers don't .
No offence taken
Cheers,
Anthony
http://www.observationpoint.com.a

MOTL>>There are some quite worrying signs that we have not done this as a nation. Our productivity relative to the rest of the world is declining.<<

Our productivity did not decline, it was dismantled. Today they can produce products cheaper in the second and third world than in the first. The same goes for 30 years ago, 50 years ago, and 80 years ago. The difference is a U.N. protocol called the Lima Agreement signed in the early 1970’s.

With this agreement Australia agreed to drop tariffs over a thirty year period. In fact the whole first world signed this treasonous parchment. Now the whole first world makes nothing. There is 20% unemployment in the EU, and it will not improve, how can it, any business that starts up has to compete with imports from the second and third world.

To see our future you must understand that the first world’s downfall was planned and executed by the IMF, World Bank, and the European banking cartel. The Lima Agreement actually states that it is about spreading the wealth. But the only ones that grew were the banks along with the service industries in all first world nations. There were more jobs in the paper for Barristers than tradesmen the other day….

The incredible thing is that the left and right parties of all first world nations signed as a block on behalf of their nation. Perhaps that was the start of the centralism that makes left and right mirror images of each other these days. Our problem is no protection, and neither party talks about it, bankers got their tongue.



MOTL>> The amount of directly productive people relative to administrative people has become out of kilter. I'm not at all convinced that our total debt has all been used for future profit generating investments<<

Why not admin staff, there is only paper to shuffle, we make nothing. The astute P Keating commented “we can have as many unemployed as we can afford” when discussing the dropping of trade barriers.

579>> What has an American treasury site got to do with us.<<

Absolutely nothing, I'm a dill.

This is the right one
The Australian: Budget 2012'

"The government anticipates an interest bill on its outstanding debt of more than $12bn this year, which is equivalent to more than half the government's defence budget. That will fall marginally in coming years as the debt is retired."

http://www.theaustralian.com.au/national-affairs/treasury/the-nations-debt-ceiling-set-to-hit-300bn/story-fndbwnla-1226350371341

Have a look at the debt clock, god its fast, a thousand dollars per second is the current growth rate. Look at the individuals share of that debt, it was only a few hundred when Kev took over, and it is now the highest in our history and we have nothing to show for it. Just like the AWU and the fund that Gillard set up.

http://www.debtclock.com.au/

sonofgloin, couldn't have put it better myself.
> " Why not admin staff, there is only paper to shuffle, we make nothing. The astute P Keating commented “we can have as many unemployed as we can afford” when discussing the dropping of trade barriers.

As Anthony alluded to above, the problem now is, that not only has the debt not been used for productive investment, much of it has not been used for ANY investment. Much of the debt is accrued through running costs. We really are just waking up in Vegas somewhere with a tiger in the room.
Oh well, it was fun while it lasted.
The really worrying thing is that it is questionable whether Australians/Australian governments have the ability to get up a bit earlier in the morning and work a bit harder [for less] for a while to reposition ourselves.
There are other countries in the world who always seem to have this ability. Japan is currently in a weak position also, but you can't help but think that the Japanese have the ability to sort themselves out. As do the Germans.

MOTL, the poor Japanese certainly copped a double whammy with the tsunami clobbering them a few years after the GFC. That bill was over $300 billion. But they do not have to borrow the money, they have it. As you said we, or should I say Labor, borrowed $170 BILLION and we have nothing to show for it, except a BILLION dollar per month interest bill.

Dunno what to say mate, we are stuffed. I read today that jobs were down for the 8th month in a row. This time WA and Qld have shown a downturn. I have a vocation that takes me out to mines right across Australia. In the past six months I have seen the wind down in coal. But new projects in gold and silver are popping up all over the place.

It is a concern when precious metals are vibrant, but a staple like coal is in decline. It speaks volumes to me, but probably overlooked by the masses

sonofgloin, I hear where you are coming from. It is always a concern when gold in particular becomes more and more viable to mine. This essentially means that money is becoming worth less.
What we have here is not a crisis of confidence, it is a crisis of culture! We have the expectation of being owed a good standard of living so ingrained into the Australian way now that it seems such an uphill battle to reverse it now. It is only through chance that in my state of QLD that we have a government that is trying to make some steps to curb this. Even then, they are under enormous pressure and hugely unpopular. The arguments about the job cuts and govt spending tell the story. The important questions are almost never raised. What were these people doing? Do they realise that the productive people of the state had to pay for what they were doing?
Our culture is broken. Our political system is broken. I originally joined OLO to get a gauge on whether there are other people out there who share this view. In some ways it has been encouraging to find that there are some people that do. In other ways, it confirms my suspicions that most people are stuck in their narrow field of focus