Surplus abandoned as ‘sledgehammer’ hits revenues.

Written by admin on December 23, 2012 – 9:16 pm

On Thursday, Treasurer Wayne Swan was forced to dump plans for a surplus and realign fiscal policy towards “jobs and growth” as collapsing tax revenues caused the budget to miss target estimates.

Cash receipts to the end of October are now 3.9 billion behind budget estimates. With a fragile economy, common-sense has finally prevailed and the Government has decided not to keep cutting expenditure to match falling revenues in a race to the bottom as the Australian economy continues to deteriorate.

Swan indicates there has been a substantial broad based hit to company profits across multiple sectors of our economy.

“Now, the main reason for this is the very substantial hit to profits that Australian companies have experienced in the early months of this financial year, and this isn’t just in resources, it’s right across the board – companies, in particular, being hit by the high Australian dollar,” Swan remarked in his press conference.

“Let’s put this in some perspective: in just four months, we have already seen the full hit to revenue that we were expecting for the whole year. Obviously, dramatically lower tax revenue now makes it unlikely that there will be a surplus in 2012-13,” he said, later describing it as “a sledgehammer hit[ing] our revenues, [..] thanks to the deepest and most sustained period of global economic turmoil since the Great Depression.”

Swan wanted to make it very clear, the government, at this stage is not committed to increasing government expenditure responding to one journalist’s question with “I’m not loosening the purse strings. I want to make it really clear. I’m not loosening the purse strings. What I have decided to do, and I think this is the only responsible course of action, is not to cut to make up for a temporary revenue hole which has emerged of some significance in the last little while.”

Another journalist was quick to question the temporary nature of the revenue hole, “You said just then that it was a temporary hole in the revenue. What gives you the confidence that it’s temporary given I remember that you also said in 2008 we were going to have a temporary deficit and we’ve had a deficit ever since.”

Swan responded with “That’s because the Global Financial Crisis turned into a global recession and went on and on.”

Swan indicates the Government will make a thorough assessment the situation in the New Year.

» Press Conference – October Monthly Financial Statement; Global Economic Downturn; Surplus; Australian Economy. – The Hon Wayne Swan MP, 20th December 2012.


Posted in Australian economy | 40 Comments »

40 Comments to “Surplus abandoned as ‘sledgehammer’ hits revenues.”

  1. BotRot Says:

    @admin, thank you for a year of very informative blog posts, and to all commenters, thanks for many interesting responses, views, additional information, and informative links. Thanks to you all, I’ve gone from being hounded and dismissed from around 2008, to having solid arguments in stating what the situation really is, and how it has now turned out like this. Yes! There was never gong to be a surplus, and we and they (Government Officials) know it.

    Admin, will you be taking a break?

    Don’t give the credit card a whipping these holidays, just put it away, and enjoy your happy holidays. I’ll be glued to this site as next year folds out. From now!

  2. PETER_W Says:

    Swan responded with “That’s because the Global Financial Crisis turned into a global recession and went on and on.”

    NO Wayne, it’s a global DEPRESSION caused by excessive speculative debt, the GFC has not ended and will not end until the economy deleverages. Australia (& China) decided to stimulate vast amounts of more debt since 2008, so congratulations for making this ultimately worse than it needed to be as all this debt bubbles up the food chain onto the governments balance sheet (evidence IN FACT fiscal deficits)… Thanks for bailing MORE water INTO the Titanic!

  3. Yusuf Says:

    Keep up the good work everyone. You know who you are. Maybe we should call out an event to meet up one day …. Till then, take care! Merry Xmas and Happy New Year!

  4. Fooey Says:

    Totally agree. Love this site. A harbour of reason among a mass of emotive, greed ridden, spruiking crap!

    Have a Merry Xmas Admin and readers. Looking forward to the new year with bated breath :-)

  5. Spruiker Buster Says:

    Merry Xmas everyone.

    I’m all spruiked out for now.
    Need a break from the relentless spruikers.
    Catch you next year.

  6. Steve Says:

    Thanks for all the work you guys do. As a regular reader I greatly appreciate it.

    Merry Christmas and a Happy New Year!

  7. Potential buyer Says:

    Maybe a stupid question, but will this affect house prices??

    Me: 150k deposit, 180k salary, refusing to buy because I don’t believe I should have to pay off someone else’s debt..

  8. Stomper Says:

    @Potential buyer – depends on your personal circumstances and risk appetite. Personally I have exited real estate am saving the difference. Will enter the market when time is right – but that may not be for 5 years. I suspect we’ve got a tough road ahead which is going to impact on property significantly. Unemployment is rising, retirees need to liquidate assets and govts will will cut spending – not a good time to have debt IMO

  9. BotRot Says:

    @Potential buyer, if you bought you’d be paying off your own debt.

    Anyway, I reckon you’re talking porkies.

  10. Tom Says:

    @Potential Buyer – the fall in tax receipts just confirms what every business leader (SME to large corporate) in the country knows. It is tough out there and getting worse. Ask anyone.

    Falling profits and demand will cause job losses and yes, this will affect house prices.

    http://www.abc.net.au/news/2012-12-24/mortgage-arrears-slide-as-rates-fall/4442710?section=business

    Lower interest rates have improved mortgage arrears, but it won’t matter what interest rates are if you don’t have a job to service your mortgage.

  11. Anterograde Says:

    Wayne Swan seems to be getting a lesson in 101 economics, maybe now the mining is slowing he will pay closer attention to the 90% of the economy struggling.

    The GFC never ended, the US Fed is now buying $45 Billion a month of Treasury stocks, and $40 Billion a month in mortgaged backed security. That’s a total of $85 billion a month purchases/stimulus from money that doesn’t exist (printing money).

    The $AU is going to get hammered this year, and go way over US$1.10

    Other world powers are only going to tolerate this abuse of the US reserve currency for so long.

    Meanwhile the mainstream media are bleating on about the debt ceiling lol

  12. Potential buyer Says:

    @botrot- no porkies here mate.. Actually with overtime I’m on more like 195k.
    What I meant by “paying off someone else’s debt”, is that it seems to me sellers refuse to sell for anything less than a rediculous profit on top of what they originally paid + interest paid on their loan.

    My brother recently bought in Cowan sydney.. The place is a 3 bedroom timber shack built in the 1950′s.. Cost him 580k and now owes the bank 540k… There is something horribly wrong considering the previous owner probably paid 250k 15 years ago… No way will it be worth 1.3 mil in 2027.. Our generation is getting screwed

  13. BotRot Says:

    @Potential buyer, not calling your salary porkies, my sincere apologies for getting your post so wrong. Thought you may be jumping into a spruik, awfully sorry Squire.

    Many a spruiker will start a post or thread (on many blog sites) with, I’m earning $$$, and have saved $$$$, thinking of buying, should I? When you answer, they pounce you with how far ahead they would be if they bought in 2006, instead of saving, and then sold in 2010, or purchased an investment property instead of a term deposit, and it goes on.

    $540K in Cowan! Its’ a bubble.

    I’m in a similar situation to you, only I’m not out to buy property. Its’ not only one generation being screwed, it is all of us. It looks more and more like, whether you go the property purchase way, term deposit, precious metals, commodites, futures, bonds, super, F-X, …, were all screwed. Unless you’re in the Billion Dollar Club.

    I can’t, and don’t think anyone can really say what one should do given all avenues look bad. I feel as though I am in a head lock and can’t decide what to do. Term deposit is what I’ve had from the begining and can’t seem to get out of it. I will no-way put any amount of it into property, but watching my saving bringing in less and less. There is nothing I can see that I could even call a safe haven, everything is losing. Except your matress perhaps.

  14. BotRot Says:

    Actually I don’t think the matress is a good idea either. I think the value of our money (bank deposits) will be halved over the next few years.

    @Potential buyer, I apologies to you again for thinking you were a real estate agent. That’s the worst thing you could do to someone.

  15. Nsw 2206 Says:

    Thanks admin for a Stirling effort this past year.

    Speaking of silver, it’s a screaming buy right now, price has been hammered by the comex cartel and the fiscal cliff.

    That idiot swan has been saying how strong the economy is all year. It’s disgusting to have such as him in charge of the country. They get in power and there’s no accountability for them. Where else can you get it so wrong and keep your job?

  16. Big Fan Says:

    I love this website – check it almost daily. Big thanks to the admin and everyone who contributes to help me keep my sanity as I avoid plunging into the property market in AU.

    It’s about time I gave something back…

    AUSTRALIA’S love affair with property is about to be tested amid predictions prices will plummet by as much as 60 per cent, with capital cities hardest hit.

    That’s the Armageddon-esque warning from leading US real estate analyst Jordan Wirsz, who believes Australia is heading towards a property bloodbath as the global economic downturn spreads to China and eventually here.

    Mr Wirsz advises Fortune 500 CEOs and fund managers on investing in real estate.
    He predicts that a flood of properties will begin to hit the market in Australia from next year as investors scramble to bail out, leading to a property crash of magnitude the country has not seen before.

    “Right now is not a time to be buying real estate in Australia,” Mr Wirsz said.

    “The market has slowed substantially but residential prices are likely to fall up to 60 per cent, possibly even more, within five years.”

    The outlook is even grimmer for land investments, which Mr Wirsz said are more speculative and will plummet by as much as 80 and 90 per cent in value.

    Commercial property will also take a hit in line with the residential sector shedding at least 50 per cent of its value. 

    Mr Wirsz pointed to artificially low interest rates, high loan-to-value lending practices, overinflated property prices, unrealistic vendor expectations and Australia’s large number of second mortgages.

    “I’m bearish about world real estate but I couldn’t be more bearish about the Australian market,” he said.

    “There have been corrections but they don’t hold up to the scale of what is coming.

    “The paradigm is that nobody ever believes house prices can go down but those who have bought at the top of the market are going to be sorely disappointed.”

    He predicts property prices will be on a slippery slope next year when interest rates begin to rise, commodity prices peak and China’s demand for Australian exports slows.

    A sluggish recovery will begin in 2016.

    “If you are homeowner, be cautious, get rid of your debt, consider selling if you don’t plan to be in your house for more than seven years and downsize or become a tenant,” he said.

    The only winners will be real estate agents cashing in on bank-owned properties, he added. 
    Adding to the glum outlook, properties in capital city would be hardest hit “because Australian cities are some of the most overvalued in the world and more speculative than regional areas”, Mr Wirsz said.

    Mr Wirsz joins other international naysayers including visiting US economist Harry Dent who recently said Australian house prices were 50 per cent overvalued.

    With few exceptions, local experts disagree with their predictions…

    Read more: http://www.news.com.au/money/property/bloodbath-to-hit-australian-real-estate-property-analyst-jordan-wirsz-says/story-e6frfmd0-1226248472949#ixzz2G3ZGLxQv

    http://www.news.com.au/money/property/bloodbath-to-hit-australian-real-estate-property-analyst-jordan-wirsz-says/story-e6frfmd0-1226248472949

    Merry Christmas all!

  17. Gavaroo Says:

    @ Big Fan

    “It’s sheer nonsense that house prices are going to fall 60 per cent that quickly,” says University of Western Sydney associate professor of economics Steve Keen. “House prices are a slow train wreck, not a fast one. [Wirsz] is up with the fairies.”

    It would be nice though.

  18. Tom Says:

    What did the U.S. do? It was something like 40% in five years?
    http://www.brw.com.au/r/2009-2014/BRW/2012/02/02/Photos/491ff0e6-4d49-11e1-b6a9-1cb6e9852952_Feb9Prop.png

    My prediction is house prices will halve in 7 to 10 years. In 7 years, falling house prices will be considered the norm and News Limited and Fairfax journalists will be making wild claims that if you look back over the last 100 years, house prices halves every 7 to 10 years.

  19. belfastDad Says:

    In N Ireland we are now on a 55% fall over the past 5 years… still falling – heading towards 60% in 2013.

    I imagine that will be the bottom of our correction, before a further 10 years of very flat growth.

    Before all of this we had a long boom, much like Australia… the only way is up! is what people would say. “you cant lose on property”

    Now most of my friends are sitting on negative equity. Our own house was valued at £229k in 2007… we’d be lucky to get £109k for it now, probably £99k in 2013.

    What i seem to be seeing is all of the same symptoms that preceded our own crash. The only difference being that we didn’t have government intervention (because they couldnt)

    Moral of the story – it can happen to you.

    Here’s a good case study for you with lots of useful stats on what happened and continues to happen here:

    http://www.jprblogwire.com/2012/12/ni-housing-market-explained.html?utm_source=twitterfeed&utm_medium=twitter

  20. AverageBloke Says:

    Thanks for the post Belfast Dad.

    But to save me some time what stimulus did the Irish Govt implement before, during and after the Irish Housing Boom?

    Does Ireland have a Negative Gearing Tax Minimisation Scheme like we have here in Australia?

  21. Spruiker Buster Says:

    @ Belfast Dad

    AT what stage of the decline in prices did the spruikers give up, or did they just keep saying its the bottom every year? (like they do here)

  22. Belfast Dad Says:

    @spruikerbuster

    That’s the interesting difference. My wife is Australian so we visit quite a lot. I’m always amazed by the totally different attitudes – especially in the media.

    When the crash started, everybody seemed to abandon ship. We’d get Real Estate people out to price our house (with a view to moving to oz) and they’d basically say “there’s no point, we won’t even give you a price as you’ll never sell”…. this was back in 2007.

    The media continues to be full of stories saying “property prices continue to plummet.” The spruikers pretty much became extinct in 2007.

    ps negative gearing was something that i had never heard of until i met australians.

    @averagebloke N Ireland falls under UK jurisdiction, but is heavily influenced by the economy in the Republic of Ireland.

    In terms of govt intervention… there really was none. Nothing like what you had with the FTB initiatives. I don’t think our govts had the money or the inclination once the crash started.

    While the boom was happening we did have some initiatives in the UK like a reduction in stamp duty (sales tax) which aimed to keep FTBs buying.

    In the RoI they did start to throw money at people while times were good. But people went out and blew it all on superficial rubbish.

  23. Fred Says:

    Without doubt Australia´s real estate prices are the most overvalued in the world. However,governments will do everything in their power to stop any significant falls, not that they will unless by able to prevent a price.

    On the supply side ,however, very restrictive town planning approval rates, something we inherited from the UK will ensure that supply will also be restricted. So much for an efficient allocation of resources in a free market economy!
    Demand, however , will need to at least remain the same level to keep prices high, here I see a potential problem

  24. Skichaser Says:

    @admin – sorry to post off topic, but it is clearly the silly season, as now it appears get your property decisions made via astrology ! On a serious note, as sign just how tricky the REI is at the moment, if they feel these articles need to be posted.

    http://www.adelaidenow.com.au/realestate/investing/property-buying-all-in-the-stars-for-2013-says-astrologer/story-fndbnn4m-1226545253952

  25. admin Says:

    @Skichaser – I noticed that one yesterday. AdelaideNow was running quite a subdued article a couple of days ago with real estate agents saying last year was one to forget, being the worst year experienced in 28 years. The agents were saying no one buys around elections, so they were not looking for an improvement until well towards the end of next year. I guess they couldn’t find an upbeat agent, so they turned to an Astrologer?

  26. BotRot Says:

    @Skichaser,

    2013 will be the year to be cautious when either purchasing or investing in property, or anything else for that matter.

    Though the year may start with the Sun rising on the sphere of property stars, many of these property prophets will get bent over. This will bring on the era of the “Ring Round Uranus”. This phenomenon will be a common expression toward property prophets and they way they appear when they speak.

    Despite that, the good news will come from the large number of people that will be affected by the planet Stupider crossing the Sourthern Sky.

    Look out for it, it will be an amazing sight.

    Really! Are they for real? Astrology! World is mad. More specifically, Australians are property mad.

  27. Cyril Says:

    Having returned to OZ after a decade in Canada I have found it amazing the difference in sentiment. In Ontario unemployment is between 7-8% (official) and it has been depressed there for a long time. Jobs are there but are at a lesser rate and not the jobs that people hope for. Some of the parties here in WA I have been to since my return many seem to think it is still real estate to the moon but looking at the economy here I can’t help feeling things are going to change here drastically this year. Walking the streets here in a lot of areas in Perth I can see a lot of people who are struggling, some feel they have not received any benefit from the Boom and a lot are just pissed of that their lives are worse off. Australia is not “Different” to the rest of the world, the can was just kicked further down the road when the gov’t rein floated the housing trouble and China’s enormous stimulation package benefited Australia so much.

  28. AverageBloke Says:

    Hi Cyril,
    Does Canada have a Negative Gearing Tax Minimisation scheme similar to Australia?

  29. Cyril Says:

    Average Bloke, From what I have heard, Canada does have NG. I don’t know how prevalent
    It is there though as I didn’t hear much about it. In the majority of Canada house prices are more inline of 3-4times income (excluding bubble BC). I get the feeling that the majority of the country didn’t get involved because the manufacturing based Provinces were in recession or slow growth and reliant on cross border trade. There are some pockets that will feel it and it is getting worse in Vancouver. The last house I bought over there was for 245k in a good area and I locked in at 3.9% for five years thinking it couldn’t get any lower. It did! Most investors are looking more at rental yields than prices to the Moon I believe.

  30. Adelaide Web Design Says:

    Re Canada, I visit this site a lot http://worldhousingbubble.blogspot.com.au/
    They have a lot of info on Canadian housing, very similar to us in a lot of ways, the bubble hasnt quite burst yet.

  31. AverageBloke Says:

    ABC news story.

    http://www.youtube.com/watch?feature=player_detailpage&v=VDzFdhfi358

    I don’t see what the big deal is as housing is still sickeningly unaffordable.

  32. BotRot Says:

    @Potential buyer, @Skichaser, @Spruiker Buster,

    In case you haven’t seen the Sydney Morning Herald today;

    http://www.smh.com.au/data-point/economy-takes-toll-on-land-values-20130104-2c92k.html

    Includes an interactive map.

    And @AverageBloke, yes! Thanks to (the everlasting) negative gearing, the whole process will be slow and painful for many.

  33. Yusuf Says:

    http://www.youtube.com/watch?v=RqtCdoulqZk&feature=youtu.be

  34. nsw2206 Says:

    @BotRot

    the article is arse about

    it should be land values taking a toll on the economy.

  35. BotRot Says:

    @nsw2206

    Now that you’ve pointed that out, how true.

    Funny how Australians think. Its’ everything but the property.

  36. Gavaroo Says:

    COMMENT FROM ROSS GREENWOOD (Financial presenter on Australian morning TV show)

    Reality pill needed for Australians
    This is really well put, in terms the average punter can understand… It cuts through political doublespeak and provides clarity
    USA Today

    Lesson # 1:

    Why the U.S. Was downgraded:

    * U.S. Tax revenue: $2,170,000,000,000
    * Fed budget: $3,820,000,000,000
    * New debt: $ 1,650,000,000,000
    * National debt: $14,271,000,000,000
    * Recent budget cuts: $ 38,500,000,000

    Let’s now remove 8 zeros and pretend it’s a household budget:

    * Annual family income: $21,700
    * Money the family spent: $38,200
    * New debt on the credit card: $16,500
    * Outstanding balance on the credit card: $142,710
    * Total budget cuts: $385

    Got It ?????

    OK now Lesson # 2:

    Here’s another way to look at the Debt Ceiling:

    Let’s say, you come home from work and find there has been a sewer backup in your neighbourhood … And your home has sewage all the way up to your ceilings.

    What do you think you should do?

    Raise the ceilings, or pump out the (ummmm) “effluent”?

    Lesson 3:

    Australia today FROM ROSS GREENWOOD

    Quoted by: Ross Greenwood of Money News..

    Right now the Federal Government is at pains to tell everyone – including us the mug-punters and the International Monetary Fund, that it will not exceed its own, self-imposed, borrowing limits.

    How much? $200 billion. And here’s a worry.

    If you work in a bank’s money market operation; or if you are a politician; the millions turn into billions and it rolls off the tip of the tongue a bit too easily.

    But every dollar that is borrowed, some time, has to be repaid. By you, by me and by the rest of the country.

    Just after 5 o’clock tonight I did a bit of math for Jason Morrison ( Sydney radio presenter). But it’s so staggering its worth repeating now.

    First thought; Gillard, Swan, Wong, before that Rudd, all of the Labor Cabinet, call these temporary borrowings, a temporary deficit.

    Remember Those Words: Temporary Deficit.

    The total Government debt will end up around $200 billion. So here’s a very basic calculation.. I used a home loan calculator to work
    it out….. it’s that simple.. $200 billion is $2 hundred thousand million.

    The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years. Now here’s where it gets scary…. Really scary.

    The repayments on $200 billion, come to more than one and a quarter billion dollars – every month – for 20 years.

    It works out we – as taxpayers – will be repaying $15.4 billion in interest and principal every year..

    $733 for every man woman and child – every year. The total interest bill over the 20 years is – get this – $108 billion.

    Remember, this is a Government, that just 4 years ago, had NO debt. NO debt.

    In fact, it had enough money to create the Future Fund, to pay the future liabilities of public servants’ superannuation, and it had enough to stick $20 billion into the Building Australia Fund…

    A note was sent to me which explains that the six leading members of the Government, from Ms Gillard down, have a collective work experience of 181 years, but only 13 in the private sector.

    If you take out of those 13 years the number that were spent as trade union lawyers, 11, only two years were spent in the private sector.

    So out of those 181 years:

    - no years spent running their own business
    - no years spent starting their own business
    - no years spent as a director of a family business or a company
    - no years as a director of a public company
    - no years in a senior position in a public company
    - no years in a senior position in a private company
    - no years working in corporate finance
    - no years in corporate or business restructuring
    - no years working in or with a bank
    - no years of experience in the capital markets
    - no years in a stock-broking firm
    - no years in negotiating debt facilities with banks
    - no years running a small business
    - no years at the World Bank or IMF or OECD
    - no years in Treasury or Finance.

    But these people have plunged Australia into unprecedented debt. Well, in a way you can’t blame them. It’s clear the electorate did not do their homework, because the Government is there by right.

    Ah, but they are Labor and people vote for them because Labor is good for the working family – right???

  37. Lenny Black Says:

    Maybe people are a bit too negative on the Australian economy. It is possible the economy will bounce back and soon full employment will be reached with the help of Coles, Bunnings & Woolworths/Masters filling the gap. Maybe Aldi will chip in too.

  38. Steve Says:

    No Crash here in WA!

    http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=wa&u=newman

  39. Matty Says:

    @ Gavaroo pretty sure I’ve seen that before. It’s frightening, and I’m sure that’s why Costello (who ironically built that surplus and was never crowned world best treasurer) left politics.

    If you want a real fright…remember that this is only the federal debt you talk of…..Qld government has $80b debt. I think SA is around $9b…what about NSW, and VIC? WA?

    Then for the real cracker…add on private debt….yeppa, it is over GDP……We have borrowed MORE than the entire economy turns with RECORD TRADE SURPLUSES……Can this be paid back?

    The market thinks so at the moment. The market cap of Commonwealth Bank is at record highs, and larger than the ENTIRE EU banking system. Think about that! The commonwealth bank is perceived to be able to earn more than all the banks in EU combined…How?

    IT’S THE DEBT STUPID.

    No amount of BS by the RE sector will turn the housing market around long term. It is impossible, why? Credit growth is not matching inflation…Why?

    A: We are at record personal debt levels….Levels never seen anywhere in the world…Ponder on that.

    B: The entire consumer confidence system is destroyed. No confidence = No desire to purchase any investment that has risk associated with it.

    I’ll bet an Iced Coffee (that’s all I ever bet btw, and laugh as you might, but one day it’s likely to be worth more than that blue piece of plastic you believe to be a $10 note) that the generation of kids who are watching their parents stress currently, and then loose their entire wealth as the economy tanks, will be exactly as the young generation from the great depression was…..IF YOU CAN’T AFFORD IT, THEN DON’T BORROW FOR IT.

    ….Seriously, if the fact that the CBA can supposedly earn more from Australians from debt products than all the banks in EU can doesn’t set alarm bells ringing in your mind……Well, I hope that ignorance is bliss

    Disclaimer *I own CBA and are in the process of off loading. The capital gains I pay on those puppies should help the ‘temporary deficit’.

  40. BotRot Says:

    @Gavaroo, its’ high time Ross Greenwood, the master of all bollocks, started speaking this way. Still he’s not on the mark with Government debt, it is way higher than $200B. He also boasted of the mining boom that wasn’t ours.

    For the longest time Ross pushed the, “…we have a strong banking system, with sound economic fundamentals, and an unemployment rate that is the envy of the world…” mantra. None of this was or is true, and you couldn’t speak otherwise to him. Yes I tried.

    Sure this much bigger than $200B Gov. debt was incurred under the ALP. The mega-huge collective personal debt we have here was founded (, by their policies) by the Hawke-Keating, Keating Gov. Then exploded by Howard-Costello, and continued by the Rudd, Gilard-Swan Gov. Made possible to the mass of fools borrowing over their heads. $200B debt, in a $1.374T dollar economy is manageable. What is manageable if personal debts are around $1.5T in a $1.374T dollar economy? That’s our debt situation here Ross never makes mention of. Always the US. By the way, everytime mis-information came out about the US like, Green-shoots everywhere, we’re in a recovery, unemployment fell for another quarter,… Ross pushed it, Ross pushes for his advertisers.

    The US household balance sheet analogy has been around, and even mentioned by the US media. Why make a similar analogy for Australian debt, as if it were a hosehold? I’m sure we’d be in a more dire situation (including person and private debts) than the US.

    @Lenny Black, I never set out to be negative nor positive on the Australian Economy. I am trying to see the real situation, whatever it may be, I want to know what is really happening. Something like the “…we have a strong banking system, with sound economic fundamentals, and an unemployment rate that is the envy of the world…” mantra just doesn’t fit. It hasn’t since December 2007. The year, the month, Shane Oliver and Ross Greenwood were spewing, “nothing wrong here, everything is great”.