Comments on: Surplus? What surplus? Happy anniversary Mr Rudd

By: H

Fri, 28 Nov 2008 00:29:48 +0000

I think Rudd should spend the money to stimuate the economy but should consult the reserve

By: Arjay

Arjay — Tue, 25 Nov 2008 18:18:51 +0000

I wonder if Kevin does his budgeting decifering on the back of a Qantas Coaster whilst approaching the stratosphere.Will he ever come down?
It can make you a bit lightheaded especially when dreaming of that future UN posting.
I hope that they haven’t borrowed the $10 billion since our falling dollar will again give more pain to the tax payer.

By: Faustino

Faustino — Mon, 24 Nov 2008 15:55:34 +0000

The UK Treasurer-equivalent has been using Keynes to justify massive intervention. A Timesâ€™ editorial today cautions that -
â€œKeynes was far from being an unreconstructed advocate of government budget deficits, and he rarely explicitly supported that policy. He believed that public works projects could stimulate aggregate demand if they gave confidence to business and thereby helped to generate a more reliable stream of private investment.
â€œMr Darling will maintain that his plans are designed to bolster confidence. He needs to ask the reasons why the economy is in that malaise. Confidence among manufacturers is at its lowest level for 30 years. Consumer confidence has been shaken severely by the collapse in the housing market. Bank lending has frozen up because the banks are worried about not getting their money back. These are not natural catastrophes. The depressed state of consumer and business sentiment is attributable to specific failures on the part of policymakers, regulators and bankers. â€¦
â€œThe UK’s structural deficit has widened substantially in recent years: in 2007-08 it amounted to Â£38 billion, or 2.7 per cent of GDP. A temporary fiscal stimulus, such as the Chancellor envisages, is intended to stabilise the economy. â€¦
â€œThere is a risk that by easing fiscal policy further, the Government may merely undermine confidence if businesses and international investors do not believe there will be an offsetting fiscal contraction – cutting spending and increasing taxes – when the economy eventually recovers.â€
Do Ruddâ€™s measures engender confidence? Not in me.

By: Faustino

Faustino — Mon, 24 Nov 2008 15:22:52 +0000

Theodor, Australia tends to have national debt because there are far more globally attractive investment opportunities in Australia than can be funded locally. Investment in viable commercial opportunities creates wealth, jobs and higher incomes. In the 1980s, the ND was dominated by government borrowing, mainly for non-commercial state government projects, and was a real worry – a very high proportion of state spending went on debt servicing, generally with little or nothing to show for it. Subsequently, government debt at both federal and state levels declined significantly (“fiscal responsibility”), the current debt has generally been incurred by the private sector to underpin 17 years of economic growth. The recent splash-the-cash actions of the Rudd government seem to have little rationale in terms of either short-term or longer term community benefit; bringing forward some worthwhile reform ideas from the tax review might have been a better way to provide a stimulus.

By: Graham Young

Graham Young — Mon, 24 Nov 2008 14:38:55 +0000

Hey Jason, I think I need to do another post on ABC Childcare and how the receivers shook the government down for $20 M. BTW, the business has been in existence for over 20 years, long before Howard came to government.

By: Jason

Jason — Mon, 24 Nov 2008 13:52:26 +0000

Careful, alf. They’re bailing out childcare because the previous government delivered an essential service into the hands of spivs. If you want to know what happened to childcare in this country, ask Larry Anthony and Sallyanne Atkinson – formerly of the ABC board. The current government are simply cleaning up the mess.

By: alf welch

alf welch — Mon, 24 Nov 2008 13:47:29 +0000

The Americans bale out insurance companies and banks.The muck hasn’t hit the fan here yet and the Rudd mob have baled out child care centres!!!!!
Has this government gone mad.

By: Graham Young

Graham Young — Mon, 24 Nov 2008 13:33:51 +0000

Theodor, the government is only one entity with the ability to borrow. The national debt is the sum total of all borrowings, and is a capital amount. Depending on whether the government is a borrower or not it may or may not contribute to that.
The budget deficit or surplus is essentially a cash flow figure, so is only one part of the total assets or liabilities of the government.
You also have to consider the value of assets that a government owns, particularly liquid assets. It might be that the government is borrowing money but has more than enough assets to cover the borrowing, so it might then claim to be “net debt free”.
Probably doesn’t make it much clearer I’m afraid. But they write text books about these sorts of things.

By: THEODOOR

THEODOOR — Mon, 24 Nov 2008 13:05:11 +0000

Can anybody enlighten me?
What is the real difference between National debt and a budget surplus/deficit.
Whilst the world applauded John Howard and Peter Costello for running a surplus
the national debt kept increasing due to the fact that Australians could borrow as much as they wanted from the banks, who in turn borrowed overseas.

By: Graham Young

Graham Young — Mon, 24 Nov 2008 11:12:29 +0000

Oh get over Howard Patrick. You can’t keep using him as a scapegoat for everything. I thought you didn’t like him because he did lie. Has that changed now? He’s the model the Rudd government ought to follow?