Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Debt and deficit Downunder – a view from Europe

By Alan Austin - posted Tuesday, 30 April 2013


4. The present revenue slump is not of the Government's making. In fact, treasurers and heads of state here in Europe and elsewhere wish they had Wayne Swan's problems.

5. Debt and deficits are not accidental outcomes. They are deliberate strategies. Governments in free enterprise economies can decide how much to borrow and how much to spend. They can also vary the money supply, interest rates and tax rates. They cannot, however, control consumer demand, export levels, company profits and taxation revenue.

Many Australian commentators seem confused about what outcomes they actually wish to achieve. Is it employment, income and security for retirees and those dependent on support? Or education, infrastructure and productivity for future economic development and growth? Or is it to have zero borrowings and zero deficits as desirable ends in themselves?

Advertisement

6. Australia has plenty of room to expand its borrowings in future budgets. More than any other OECD country except perhaps Estonia.

Debt to GDP is currently only 20.7%. This is the lowest of all OECD nations except Estonia and Chile.

The UK, Germany, France, Hungary, Israel and Canada are all above 80%. The USA, Belgium, Ireland, Italy and Singapore are close to 100% or above. Japan is above 210%.

Australia could quadruple its current borrowings and still be better placed than most comparable countries.

In fact, now is the perfect time to increase borrowings. Interest rates are low, current debt is low, growth and income are assured and Australia has for the first time ever the top international credit rating.


7. Demand for Australia's exports has not declined. It has simply stopped growing at the recent rapid rate. And prices have come off their unrealistic earlier highs.

Demand from China has now stabilised, but at a relatively high level. China's economic growth has declined from the extraordinary heights of 2010, but remains above seven per cent. This is more than enough to ensure steady demand for Australia's resources well into the future,

Advertisement

8. The downside also has an upside. Yes, the strong Aussie dollar has hindered exports. No question. That's a headache for the Trade Minister as well as Australia's exporters.

But the advantages of a strong dollar more than compensate. It is boom times for importers. And for travellers. This is the best chance Australians have ever had to see the world. You can buy 100 British pounds for 153 Aussie dollars today. In 2001 that would have cost A$304.

So come to Europe. You will see the boulevards of Paris, the Eiffel Tower, the vineyards of Provence, London Bridge, the British crown jewels, the canals of Venice and the galleries of Rome. You will also see starkly how incredibly fortunate Aussies are relative to the rest of the world.

  1. Pages:
  2. 1
  3. Page 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

172 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Alan Austin is an Australian freelance journalist currently based in Nîmes in the South of France. His special interests are overseas development, Indigenous affairs and the interface between the religious communities and secular government. As a freelance writer, Alan has worked for many media outlets over the years and been published in most Australian newspapers. He worked for eight years with ABC Radio and Television’s religious broadcasts unit and seven years with World Vision. His most recent part-time appointment was with the Uniting Church magazine Crosslight.

Other articles by this Author

All articles by Alan Austin

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Alan Austin
Article Tools
Comment 172 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy