Tag Archives: AOFM

Another Week, Another $1.8Bn In Debt

3 May

The Rudd borrowed-money spendathon continues.

Already $138.5bn in the hole, this week alone the Australian Office of Financial Management (AOFM) reports that another $1.8bn in Commonwealth securities and Treasury notes will be auctioned off, to raise money for yet more wasteful spending.

Meanwhile, the interest rates that the government must offer to pay to attract buyers for our sovereign bonds continues to steadily rise.

From The Australian:

The government is facing a battle to keep costs under its self-imposed 2 per cent growth cap, with blowouts in some programs and higher interest payments adding to the deficit.

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Yields On Aussie Bonds Rising

8 Apr

And so it begins.

Have we just heard the ‘canary in the coalmine’ of government debt pause its happy singing?  When the government finds it has to start offering higher yields in order to sell its longer-dated sovereign bonds, you know that the market is beginning to smell inflation… and/or, losing faith in the government’s ability to pay up on maturity.

From The Australian:

The federal government drew solid demand today for an auction of new July 2022 bonds, its longest nominal debt on issue, but had to pay an attractive premium to sell the bonds.

In the latest extension of its yield curve, the Australian Office of Financial Management sold $1.0 billion of 5.75 per cent July 2022 bonds with a weighted average yield of 5.9642 per cent.

“The Commonwealth had to pay up to get good demand,” Westpac strategist Damien McColough said, noting good interest from buyers on yields closer to the 6.0 per cent level.

Over the past two months, the yield on the more common 10-year Australian Government bonds has risen from 5.48% to 5.85%.

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$127.68 Billion and Rising

6 Mar

From the Australian Office of Financial Management:

Total Commonwealth Government Securities on Issue – $127,682m

*As at 5 March 2010
Updated weekly
Face value amounts rounded to the nearest million

How much further into debt will Rudd Labor take us next week?

Forthcoming AOFM Tenders

Treasury Bonds
On Wednesday, 10 March 2010 a tender for the issue of $700 million of the June 2014 Bond line is planned to be held.

Treasury Notes
A tender for the issue of $600 million of Treasury Notes maturing on 11 June 2010 and $300 million of Treasury Notes maturing on 23 July 2010 is planned to be held on Thursday, 11 March 2010.

That’s right. Another $1.6 Billion in debt, next week alone.

These are the debt numbers that Finance Minister Lindsay Tanner does not trouble himself to know.

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Labor Borrowing A Billion A Week

2 Mar

Abbott tells it how it is:

QUESTION:

Interest rates are expected to go up again, um… Who would you blame?

TONY ABBOTT:

Well, if you’ve got the government out there borrowing more than a billion dollars a week that puts a lot of pressure on interest rates. Now, plainly interest rates will always be higher than they otherwise would be when you’ve got the government out there in the market borrowing as dramatically as this government is.

Keep informed of Australia’s sovereign debt level… unlike Finance Minister Lindsay Tanner, who doesn’t bother.

See for yourself just how much this wastrel Government is borrowing every week, by clicking here. To see how much they intend to borrow in the next few days, click here.

Already, you are better informed about Australia’s debt than the Finance Minister.

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Henry: GFC Is ‘Over’

28 Feb

Earlier this month, Treasury Secretary Ken Henry declared that the Global Financial Crisis is “over”:

“What people have called the global financial crisis, that has passed, I think it’s safe to say,” Dr Henry said. “But that isn’t to say that there will not be further adverse shocks for financial markets down the track and some of those shocks … could be of some significance for individual countries, but I don’t imagine (they would be) shocks of the sort that would be globally significant.”

Remember that claim.

Ken Henry did not see the GFC coming in the first place. He later claimed that “only extraordinarily good forecasters” would have predicted the GFC.

Well, that would be lots of extra-ordinary folk like me then, Ken. Even I could see it coming, from late 2005. And despite the ridicule (familiar story?) of “trained” “expert” financial advisers, I chose to pull all my superannuation out of the sharemarket into cash in May 2007, completely avoiding the global crash that has wiped out the investments and retirement savings of countless millions –

Historical performance chart assumptions: Performance is calculated on an initial investment of $10,000, using entry to exit prices, with distributions reinvested. A 4% contribution fee has also been applied. This information is general information only


And what about those international economists who publicly warned of a looming GFC, Ken?  Men such as professors Ken Rogoff and Nouriel Roubini, and our very own “Dr Doom”, Professor Steve Keen?

You’d think Henry might have learned a few lessons about wide-ranging research… and caution… given his utter failure to foresee what many others did.  So has he learned anything?

Clearly not.

Henry presently remains ignorant of, oblivious to, or (worse) rejects the numerous dire warnings coming daily from all around the world. Not just from Barnaby Joyce, but from many leading international economists – several of whom did predict the GFC – who are now genuinely concerned with multiple threats to the global economy. Everything from the European debt crisis, to the China property bubble.

Scarily, it has become increasingly obvious that Ken Henry is the man who really holds the reins of Australia’s economy, since PM Rudd, Treasurer Swan, and Finance Minister Tanner, are all totally unqualified economic imbeciles. Never forget, all of them were frantically talking up “the inflation genie” danger in 2008, even as the GFC tsunami was breaking over the world economy.

If (when) it all goes pear-shaped… again… Ken Henry must be sacked.

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No, We Cannot Pay Our Debt

26 Feb

Here’s another picture that tells a thousand words.

Yesterday Barnaby wrote in The Australian about the annual Budget surpluses needed to pay back Labor’s ever rising debt ($1 Billion more today alone; another $1.8 Billion next week):

Let’s talk about the abundance of faith exhibited by Labor when it tells us of the eight consecutive $19bn surpluses that are required to bring the budget back into orbit when the continued stresses on the international economy are clear and evident, especially in Europe.

On the ABC’s Q&A program on Feb 15th, Barnaby pointed out that Labor’s “plan” to return the Budget to surplus is pure fantasy:

We have always got the view that you should try and reduce tax but the first thing, without harping on it, we’ve got to deal with the debt and because they keep racking up debt, that takes away our capacity to reduce your tax and there’s no other way around it. You either increase your revenues, decrease your costs – they talk about productivity and sort of the cyclical angel descending from heaven and making everything better…

Well, just what is the likelihood of that cyclical angel descending?  And even if it does, can it produce eight consecutive surpluses of $19 Billion?

Decide for yourself.

Below is a chart of Australian Government Budget surplus / deficits, dating back to the beginning of the Howard Government. Source is the Reserve Bank of Australia’s Statistics section. Click on the chart to enlarge –

This country has never seen anything like eight consecutive years of $19 Billion surpluses. In fact, the Howard Government achieved it just 3 times… in 12 years… during an unprecedented mining boom.

Barnaby is right.

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Day of Reckoning Near: Joyce

25 Feb

In today’s Australian newspaper, Barnaby Joyce warns of  impending debt crisis:

AUSTRALIA’S gross foreign debt, taking into account both the public and private sectors, is more than $1.232 trillion.

The net foreign debt is about $638 billion. It is one of the highest net debt to gross domestic product ratios in the developed world.

As Treasury official David Gruen told a Senate estimates committee recently, it is higher than the US, Japan and Britain. The only country that could be confirmed as higher than ours, at the latest estimates hearing, was New Zealand.

Australia’s gross sovereign (government borrowing) debt during that estimates hearing was $123.11bn, but by last Friday it had climbed to $125.483bn.

What does Barnaby think of the Labor Government’s stimulus spending?

We have, approximately, a $90bn package of eclectic economic trinkets, noted as stimulus, that would look good hanging from any rear-vision mirror in a car doing hot laps on a Friday night in downtown Dubbo.

Did we get something substantial, clearly identifiable in the form of the Snowy Mountains Scheme, or inland rail or massive water infrastructure to alleviate the problems of future droughts? Did we invest in a method to encourage people in a growing population to settle away from the crowded capitals of Sydney, Melbourne and Brisbane? No, we didn’t.

Read all of Barnaby’s article here, and The Australian’s editorial on Barnaby’s warnings – with reader comments – here.

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Tanner $6B Out on Debt

25 Feb

Media Release – Senator Barnaby Joyce, 25 Feb 2010

Finance Minister Lindsay Tanner today on Fairfax Media, shows yet again he is a person who doesn’t “dot the i’s and cross the t’s”.

Asked what Australia‘s government gross debt was, he said and I quote, “The most recent actual number is about $120 billion, that’s the gross, I don’t check day on day, week on week”.

Australia‘s gross debt is actually $126.083 billion. It cracked $120 billion back before the 28thJanuary. So is the best we can hope for month on month? But don’t worry, Mr Tanner, it’s only somebody else’s money and I suppose somebody else has to repay it.

Mr Tanner you should be checking day on day, week on week. You should be dotting the” i’s and crossing the t’s”. You should be doing everything in your power to stop the trajectory that this debt is on.

When you are out by $6 billion and you are the Finance Minister, you do not leave a sense of confidence that you are managing the problem.  It appears you are not even closely watching the problem. Mr Tanner you would have got closer to the number if instead of waving my media releases around in the chamber, you actually read them.

So Mr Tanner, if you are not watching our debt, who in the government is?

For more information –
Jenny Swan
Office of Senator Barnaby Joyce,
Leader of the Nationals in the Senate
02 6277 3697
0438 578 402
jenny.swan@aph.gov.au

Note: Unlike Lindsay Tanner –  the responsible Finance minister – Barnaby Joyce is right up-to-the-minute with his knowledge of the debt numbers. Even the Australian Office of Financial Management (AOFM) has not yet updated their home page to reflect the additional $600 million in Commonwealth Treasury Notes that were auctioned off today.

Finance Minister Lindsay Tanner today on Fairfax Media, shows yet again he is a person who doesn’t “dot the i’s and cross the t’s”.

Asked what Australia‘s government gross debt was, he said and I quote, “The most recent actual number is about $120 billion, that’s the gross, I don’t check day on day, week on week”.

Australia‘s gross debt is actually $126.083 billion. It cracked $120 billion back before the 28th January. So is the best we can hope for month on month? But don’t worry, Mr Tanner, it’s only somebody else’s money and I suppose somebody else has to repay it.

Mr Tanner you should be checking day on day, week on week. You should be dotting the” i’s and crossing the t’s”. You should be doing everything in your power to stop the trajectory that this debt is on.

When you are out by $6 billion and you are the Finance Minister, you do not leave a sense of confidence that you are managing the problem.  It appears you are not even closely watching the problem. Mr Tanner you would have got closer to the number if instead of waving my media releases around in the chamber, you actually read them.

So Mr Tanner, if you are not watching our debt, who in the government is?

For more information, Jenny Swan

Office of Senator Barnaby Joyce,

Leader of the Nationals in the Senate

02 6277 3697

0438 578 402

jenny.swan@aph.gov.au

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A Clear Picture of Australia’s Debt

25 Feb

Barnaby Joyce produces a chart that says it all:

A picture paints a thousand words so a good understanding of our gross debt is seen in the graph (above).

It shows clearly that the Coalition is a government that pays off debt and that Labor is a government that creates debt and Mr Rudd is creating debt at a faster rate than has been seen in recent history. With gross debt currently in excess of $125 billion one would be foolish if they were not concerned by the trajectory of the growth in debt.   How would you feel taking this to your local bank manager as an example of your fiscal prudence, and the ceiling insulation program as an example of your management technique?

If we continue on the trajectory that is self evident in this graph we are most definitely going to arrive at a point of reckoning.

Read the entire article here.

UPDATE: Barnaby offers an updated version of the above graph –

If we continue on the trajectory that is self evident in this graph we are most definitely going to arrive at a point of reckoning. This point of reckoning will place immense pressure on the budget and the delivery of such services as health, education, defence, foreign aid, childcare and everything else that relies on the public purse for payment.
Labor cannot just go on borrowing money at the rate that is portrayed in this graph and it is absurd to look at the trajectory of this graph and say that you do not have a concern. It is vastly easier to manage problems when they are manageable. It is far more prudent to “dot the i’s and cross the t’s” and manage the problem now than to wander into the chamber at a later date with a sorrowful look on your face wishing if only we had that time again we’d have done things differently.

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