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:
Interest on debt forecast, Budget 2013-14:
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?