Tag Archives: lindsay tanner

Official: China Bubble ‘Undisputable’

4 Mar

From China Daily:

China’s real estate industry is in an “undisputable” bubble with its skyrocketing property price fermenting an imminent structural inflation that might hijack the country’s booming economy into violent fluctuations, a high-ranking official said on Wednesday’s Beijing News.

“The over-speedy price hike is evident of an undisputable bubble in the property market, which is a major propeller behind the current inflation,” said Yin Zhongqin, deputy chairman of the Financial and Economic Affairs Committee of the National People’s Congress.

Famous international financier George Soros has said that he is “very cautious” on China.

Last week, former IMF chief economist Professor Ken Rogoff predicted that the China bubble will bust “within ten years”, sparking a regional recession and hammering commodity exporters.

Despite measures being taken by the Chinese central authorities, leading authorities on Asian economics say that the China real estate bubble cannot be cooled, as it is being driven by trillions of dollars borrowed for speculative, leveraged investments by local municipal governments.

In Australia, our economic authorities are again asleep at the wheel, having confidently predicted a “Golden Age” of “unprecedented prosperity” from a multi-decade mining boom.

Barnaby is right.

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Labor: Hide The Increase

3 Mar

Australia’s much-heralded “low” debt-to-GDP ratio statistic appears to be a fraud. Deliberately “adjusted” by the Rudd Government, in order to make their massive debt-funded spending binge appear less than it is.

In the 2009-10 Mid-Year Economic and Fiscal Outlook (MYEFO), the government refers to a change in the methodology used to calculate GDP  for the previous 2008-09 year, and for the historical data series.  This change results in a “substantial increase” in the published level of GDP.

The flow-on result from this change is obvious. The government’s spending, as a percentage of that artificially increased GDP figure, will appear lower than if the change had not been made.

And because all of its spending is being done using borrowed money, the debt-to-GDP figure will also appear lower too. Perfect cover for a government that needs to defend itself from Opposition attacks, and smooth over public fears, about rising government debt.

But there’s more.

In the 2009-10 MYEFO, the Rudd Government changed the methodology used to “adjust” government spending for inflation. The result is that the government’s “real” spending growth % figure is artificially reduced… by a whopping 30.1% for 2009-10.

How can we know this?

In the fine print – isn’t it always? – on the Rudd Government’s Budget 2009-10 MYEFO website, we read:

…

Continue reading ‘Labor: Hide The Increase’

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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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Tanner Lied About Whitlam Debt

1 Mar

Tanner - "We were not in debt under Whitlam"

Finance Minister Lindsay Tanner recently defended the Whitlam legacy on the ABC’s Q&A program, claiming that the Whitlam Government had no debt:

“In the period when the Whitlam government was in office, most people would be surprised by this, Australia had negative net debt,” Mr Tanner told ABC Television on Monday night.

“We were not in debt under the Whitlam government.

Note carefully: that’s not one, but two intriguing claims. That Whitlam had (1) Negative Net debt, and (2) no debt.

I’ve done a little digging in the RBA Statistics archives, to see if Tanner was telling the truth. The results so far suggest that he lied…

Continue reading ‘Tanner Lied About Whitlam Debt’

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Stutchbury Sees The Angel Too

28 Feb

Brandishing the headline “Chinese Can Fund Our Boom”, The Australian economics editor Michael Stutchbury sees that Chinese cyclical angel descending from heaven too… and joins in the smearing of Barnaby Joyce:

The method and madness of Barnaby Joyce won’t lie down because it strikes at the heart of Australia’s economic risks and opportunities amid the mother of all mining booms…

The opposition finance spokesman has tweaked his reckless claim that Australia could default on its sovereign debt…

His incoherence invites ridicule. “He does not have a clue what he is talking about,” Wayne Swan responded, mocking Joyce’s reference to “net debt gross, public and private”. The Nationals senator was saying “ridiculous, stupid and damaging” things about Australia’s debt position. Swan’s Treasury head Ken Henry has accused Joyce to his face of “a gross oversimplification of economic understanding”.

Doesn’t have a clue, ‘eh Wayne?  Remind us again how your Bachelor of Arts (thence career political hack) compares with Barnaby’s qualifications?

As for Ken Henry’s arrogant comments, perhaps Mr Stutchbury might care to do a little research. He might learn just how many international economists directly refute Henry’s confident visions of a multi-decade China Miracle.

Mr Stutchbury goes on to imply that Barnaby poses a threat to that Chinese angel descending, thanks to his warnings about Australia’s levels of debt:

So Joyce now begins with private debt, particularly Australia’s gross foreign debt of $1.2 trillion, or about 100 per cent of gross domestic product.

At $638bn or 47 per cent of GDP, Australia’s net foreign debt is one of the highest in the developed world and much higher than in 1986 when Paul Keating warned that Australia could become a banana republic.

You’d think that fact might concern Mr Stutchbury. Not at all. Immediately comes the justification:

…

Continue reading ‘Stutchbury Sees The Angel Too’

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Can We Even Pay The Interest?

27 Feb

Estimated (E), Projected (P)

It seems that every man and his dog… except Barnaby Joyce… happily takes for granted the popular claim that Australia’s sovereign debt levels are nothing to worry about.  But have you ever stopped to think about whether we really can pay back the debt?

I made the chart above using the data from the Government’s Mid-Year Economic and Fiscal Outlook (MYEFO) 2009-10 Budget statements. It shows Treasury Secretary Ken Henry’s projected Interest on debt for this financial year, and the following three years. Those are interest-only repayments that Kevin Rudd incurred, and now we-the-taxpayers have to pay.

Doesn’t look too bad, you say?  An Interest bill starting at $8.26 Billion for 2009-10, rising to $15.28 Billion for 2012-13? Surely your $900 “bonus” cheque, and your dodgy roof insulation from the Fairy Ruddfather, make paying this Interest bill worthwhile?

To put it into perspective, I’ve put together another chart (below).  It shows the Australian Government headline Surplus / Deficits going back to 1996, and adds in the projected Interest on debt (in blue) from the above chart. Simply click on the chart to enlarge –

As you can see, Ken Henry’s projected Interest on debt alone is greater than many of the 12 years of Howard Government surpluses. And they came during an unprecedented mining boom.

One other thing. Can anyone really believe Ken Henry’s projections?  This is a man who could not see the GFC coming.  And even now, he is confidently predicting a “Golden Age” of “unprecedented prosperity” for Australia, one that could “stretch to 2050”. All thanks to his belief in a 4o year continuous boom in China.  He is clearly ignorant of the fact that more and more leading international economists… including some who did predict the GFC… are now predicting that China is a bubble that will bust within ten years.

Paying back the projected Interest-only will obviously be a big challenge. So try to imagine how we are ever going to pay back the principal too.

Barnaby Joyce has recently stated that it would take eight (8) consecutive years of $19 Billion surpluses to bring the budget back to earth.  As you can see from the chart above, the Howard Government achieved a budget surplus that big only 3 times… in 12 years.

It is easy to see why Barnaby is so concerned about our ever-rising debt under Rudd Labor.

Because quite simply, we can not pay it back.

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Barnaby vs Tanner vs Swan

25 Feb

Ever wonder how Barnaby’s economic qualifications stack up against Lindsay Tanner’s? Or against Wayne Swan’s, for that matter?

You might be surprised.

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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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