$5.2 Billion Budget Blowout

15 May

Let’s hear a caustic cheer for all the “experts” who insist that Australia’s public debt is “small”, and does not matter.

Interest on debt forecast, Budget 2012-13:

Screen shot 2013-05-15 at 9.48.48 AM

Interest on debt forecast, Budget 2013-14:

Screen shot 2013-05-14 at 7.50.25 PM

That’s a blowout of $699 million in 2012-13. $937 million in 2013-14. $1.594 billion in 2014-15. And $1.982 billion in 2015-16.

For a grand total blowout — just the blowout, not the total — of $5.2 billion “over the forward estimates.”

Now remember — all this is based on the forecast assumption of 5% per annum nominal GDP growth in the next two years. Even if that were to happen, the forecast is for another deficit (ie, more borrowing, at interest) of $18 billion in 2013-14, and $10.9 billion in 2014-15.

So, what do you think is going to happen to the forecast budget deficits — and the forecast interest on debt — if when that GDP forecast turns out to be highly optimistic … again?

Dear reader, I invite you to ponder, if you will, just how much productive investment could be made, if the economy were not loaded down with the ever-increasing burden of repaying a forecast $14 billion every year to (mostly foreign) bondholders, just for Interest on the Federal government’s debt?

4 Responses to “$5.2 Billion Budget Blowout”

  1. Tomorrow's Serf May 15, 2013 at 10:28 am #

    And they’ll all get taxpayer funded pensions for their treason.

    They should get LIFE BEHIND BARS!

  2. mick May 15, 2013 at 10:33 am #

    Blame every man woman and child for this. The mining bonanza has been squandered on lifestyles for all Australians. We all need to go to places like the US to see how tough folk are doing it there and then come back and get real. What we have here is money going to waste, vested interests in business and social security laid on like it is going out of style with laments for ever more.

    I agree with the prognosis as it is unlikely that the forecasts are correct. We need a bit of realism, not wishful thinking. So maybe sack many in the Treasury for leading us all astray.

  3. Phil May 15, 2013 at 12:12 pm #

    It is hard to blame We The People as we have been led astray. At the end of the day though the only solution is personal responsibility. As we recognise that we must help ourselves we start to really learn again.

    Those that led us astray would say that Govt Bonds must be issued at interest to foreigners (Currently $12 thousand million) in order to provide the money supply within the economy.
    Prior to the 1940’s however, the Commonwealth Bank of Australia (read Peoples Bank not private) would have issued the money directly as loans at low interest and with that interest being returned to the Federal Government.


    A true sovereign independent nation issues its own credit/money.
    We dance on Australia day and weep on Anzac day while all the time behind the illusion of sovereignty our life energy and freedom is being siphoned away.

    Please take the time to read the link.

  4. Kevin Moore May 15, 2013 at 4:52 pm #

    Opinions of major C.H.Douglas –

    Dictatorship by Taxation


    “……….Stripped of its complications, the fact emerges that we live under a system not at all dissimilar to that of a commercial company with unlimited liability in which new debentures are constantly being issued and allotted free of charge to the financial system and its controllers, who take no risks and do no creative work.
    The general population is fundamentally in the position of wage earners, and the taxation upon them goes to pay the interest on these mortgage debentures. The income tax authorities are in the position of accountants and debt collectors, acting in the interest of the debenture holders. We are, every one of us, in debt to these debenture holders, even though some of us may hold debentures, and the policy is to load us individually and collectively with debt so that we shall be the slaves of our debtors in perpetuity.
    It is impossible to obtain money to pay off the debt, owing to the fact that our debtors are at the same time in sole control of the power of creating the money which is required to pay off the debt.
    Taxation is not primarily an economic device, it is a tyrannical device. Once the meaning of this situation is grasped, it is not difficult to see the general principles by which not merely could taxation be eliminated, but in place of it every individual could be placed in a condition of economic freedom and security. As I put the matter before the monetary commission in New Zealand, the essential power which the banks have acquired is the power of the monetization and the demonetization of real wealth. That is to say, the power of creating acceptable and accepted orders or demands on the producing system and of destroying them on recall; and the essence of their fraud upon civilisation is not in the magnificent technique of the system which they employ, or even in the charges which they make for the use of this money which they create, even though these charges, i.e. their interest rates, may be considered in many cases exorbitant.
    The essence of the fraud is the claim that the money that they create is their own money, and the fraud differs in no respect in quality but only in its far greater magnitude, from the fraud of counterfeiting.
    At the instigation of the banking system, barbarously severe penalties are imposed upon the counterfeiter of a ten-shilling note, but a peerage is conferred upon the counterfeiter by banking methods of sums running into hundreds of millions. May I make this point clear beyond all doubt?

    It is the claim to the ownership of money which is the core of the matter. Any person or any organization who can create practically at will sums of money equivalent to the price values of all the goods produced by the community is the virtual owner of those goods, and, therefore, the claim of the banking system to the ownership of the money which it creates is a claim to the ownership of the country.

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