29 May 2012


Coalition bends 

the truth on its record debt levels warnings.


May 29, 2012
OPINION: Edited BY S W T READ 29/5/2012

Global investors have flocked in to buy Australian government debt. Their concern is not that we have too much debt, but too little.

IMF figures show that of the 34 advanced economies, Australia has the third smallest ratio of gross debt to GDP: including state and municipal debt, it's just 24 per cent of GDP.

By comparison, Germany has a debt-to-GDP ratio of 79 per cent, the United States 110 per cent, and Japan 241 per cent.

The Coalition and its allies are like a broken record warning that Australia is swimming in debt and putting itself in danger. That is simply untrue.

If Labor's borrowing has put us in danger, why is Australia one of only eight countries rated AAA by all three global ratings agencies?

Ratings agencies make mistakes, as we all do, but are they that incompetent?

The surge in demand for Australian bonds that has driven yields down has come from overseas buyers. Are these investors stupid in seeing Australia as a safe bet?

No, the Coalition is using rhetoric to make a dangerous case that doesn't stand up. Australia's debt levels remain very low by world standards.

Net debt is expected to peak at less than 10 per cent of GDP here; in Greece, it's about to hit 160 per cent. That's a huge difference.

The jackals, both Opposition and Press, are gathering as they sense weakness that might enable them to share in the benefits of the kill.

It is not a pleasant sight, but then jackals, with the scent of blood in their nostrils, are not known to be open to reason.

These human jackals seem to share many of their less endearing characteristics.


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