Wayne Predicts 57% Blowout In Net Debt … This Year

2 Dec

Your humble blogger will not bore readers with another tirade about the wilful deception of governments (and lapdog economic commentators) always preferring to reference Australia’s “net” government debt position, rather than what is actually owed … the (much bigger) gross figure.

Instead, let us simply take a look at the government’s own preferred measure, in their own budget statements.

Here’s the government’s stated net debt position in the Final Budget Outcome for 2010-11 – that’s only 5 months ago:

Final Budget Outcome 2010-11, Part 2, Table 9 | Click to enlarge

Note that the “estimate” for net debt for the year ending June 2011, as given in the mid-May budget ($82.3 billion), was blown out by more than $2 billion just 6 weeks later ($84.5 billion).

Now, let’s look at the May budget, and the original “estimate” for net debt at year ending 2011-12:

Budget 2011-12, Budget Paper No. 1, Statement 9, Table 2 | Click to enlarge

Original “estimate”? $106.65 billion in net debt, for the year ending June 2012.

And now, 6 months later, let’s look at the latest 2011-12 MYEFO, and the revised “estimate” for net debt at year ending June 2012:

MYEFO 2011-12, Appendix B, Table B2 | Click to enlarge


So, net debt was $84.5 billion at end June 2011.

In the May budget, it was “estimated” to reach $106.65 billion by end June 2012.

The reality?

Barely 6 months later, net debt is now “estimated” to be $132.5 billion at end June 2012.

IF the government can keep net debt down to their latest upwardly revised estimate, that would be an actual blowout of 57% in total net debt … in just one year.

And it would be a 24% blowout on the Treasury #JAFA’s original “estimate” made in the May budget just 6 months ago.

The chances of this government keeping net debt down to their latest “estimate”? Based on track record, somewhere between Buckleys and none.

Finally, note that net debt is now “estimated” to not increase by more than $3 billion over the three years following 2011-12.

This prediction from the same ‘experts’ whose “estimate” in mid-May for net debt at end June, was wrong by $2 billion.

Now now dear reader … stop laughing.

Come on.

That’s enough now.

Seriously … this is serious.


10 Responses to “Wayne Predicts 57% Blowout In Net Debt … This Year”

  1. Twodogs December 2, 2011 at 8:15 am #

    I laugh in the face of adversity! After all, it’s just money (that pays for food, water and other non-essentials…)

  2. bushbunny December 2, 2011 at 10:25 am #

    I believe it. What a lark eh.

  3. Tel December 2, 2011 at 10:25 am #

    I think the non-financial asset list is the most hilarious.

    $36 million of “biological assets” ?
    $9.5 billion of “Heritage and cultural assets” ?
    $5 billion of “Intangibles” ?!?

    You can imagine going to a bank for a loan and saying, “I can offer you my biological assets, plus a great set of intangibles.”

    Those things don’t balance out against debt because they can never be used to pay the debt.

    • The Blissful Ignoramus December 2, 2011 at 10:32 am #

      Exactly right Tel. That (and more) is why I bang on about the deception of pollies et al referring to net debt, rather than what is actually owed (the gross figure).

    • Twodogs December 2, 2011 at 3:50 pm #

      Au contraire, Tel! Kim Kardashian has been trading on her biological assets for yonks, and they arent ever hers. Talk about great ROI!

      • The Blissful Ignoramus December 2, 2011 at 6:23 pm #

        Whose ROI though, Twodogs … chief sponsor Dow Corning?

        • Twodogs December 2, 2011 at 6:49 pm #

          Well, them too, but don’t you think her 10 grand “enhancements” have paid for themselves many times over?

  4. bingbing December 2, 2011 at 8:42 pm #

    BIR, I hate doing accounting and percentages, but that 57% might actually be closer to 71%.

    • The Blissful Ignoramus December 2, 2011 at 10:35 pm #

      Thanks Bing, good article, and appreciate the h/t. Reason for the difference in %’s is that I’ve purely used the govt’s specific statements and forecasts for net debt. Whereas in coming up with a total deficit estimate of $145B, you’ve just added the cumulative annual difference between revenue and expenditure, which does not account for (eg) the various “assets” that the Treasury/government use to offset (fraudulently, IMO) the gross debt and thus come up with a “net debt” figure. Mind you though, I would not be the least bit surprised if net debt does indeed hit $145b at end June 2012, rather than the latest “estimate” of $132.5b. A mob that can have their mid-May estimate for end June blow out by $2b (6 weeks), are more than capable of having their latest estimate blow out by $12.5b between now and June 2012 (6 months).


  1. When you spend more than you earn… « bingbing - December 2, 2011

    […] Thanks to some good leg work done by blogger Barnaby was Right, our treasurer, Wayne Swan, is essentially predicting a 57% blowout in net debt this year. […]

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