Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 3
Does Australia have a debt ceiling?
Topic Started: 4 Aug 2011, 09:13 AM (6,716 Views)
mugshot
Member Avatar


With all that's going on in the USA I wondered if Australia has a debt ceiling, are we close to it, and what's the process for raising it if we have one.

Does anyone have a list of debt ceilings per country?
Profile "REPLY WITH QUOTE" Go to top
 
matthew_50
Default APF Avatar


if we do, it would be very far away.

the US has

GDP $14.7t
public revenue $2.1t (14%gdp)
public expenses $3.4t (23%gdp 160% revenue)
public debt $14.7t (100%gdp 700% revenue)

Australia has:
GDP $1.5t
public revenue $350b (23%gdp)
public expenses $365b (24%gdp 104% revenue
public debt around 350b (23%gdp, 100% revenue)


so its easy to see the difference between the finances...

interesting is the difference of the revenue to gdp ratio, I always find it a bit strange that we measure debt to gdp, as this all assumes that all countries tax the same amount, or could easily raise taxes if necessary

if this year has taught us anything, its that this is FAR from the case...

as such, the fact that the US collects so much less of its gdp in tax, seems to me, to make their debt situation look even worse than it does when compared to gdp...


from an everyman perspective, comparing it to a normal person's finance, the key figures are this: the US has a current debt of 7 times its income, and is sinking further into debt at a rate of 60% a year...
vs Australia, who has a debt of 1x income, and is sinking further into debt at 4% a year...


figures from Wikipedia, 'Economy of x'


a debt ceiling is very subjective from an economic point of view, and is more a political thing anyway... so, for a country, it could be anything... if they even choose to have one... even countries that can't just print their own money, could still borrow until the world wouldn't lend them any more... I don't know where you would find that information?
Profile "REPLY WITH QUOTE" Go to top
 
Admin
Member Avatar
Administrator

http://www.bloomberg.com/news/2011-06-01/australia-must-raise-debt-ceiling-treasury-secretary-says-1-.html

Quote:
 
Australia Must Raise Debt Ceiling, Treasury Secretary Says

By Gemma Daley - Jun 1, 2011 3:13 PM ET

The Australian government may have difficulty operating unless lawmakers approve an increase to the country’s gross debt ceiling, Treasury Secretary Martin Parkinson said.

“I couldn’t imagine the parliament would be so foolish not to do so,” Parkinson told the Senate Economics estimates committee in Canberra today about approving the laws. “Were that to be the case, it would have serious ramifications for the operations of government and I would imagine the government in those circumstances would be forced to find other ways.”

The government introduced laws to parliament on May 10 to raise the gross debt ceiling to A$250 billion ($277 billion) from the current A$75 billion to deal with budget deficits. The opposition Liberal-National coalition, which is leading opinion polls ahead of an election due in 2013, has accused the government of being addicted to debt and opposes the plan.

Labor Prime Minister Julia Gillard relies on support from four lower house lawmakers that aren’t part of her party or the Liberal-National coalition to pass legislation after the August 2010 election delivered the closest result for 70 years. The debt laws are yet to be debated in parliament.

Australia’s economy shrank in the first quarter by 1.2 percent, the most in 20 years, after rains flooded coal mines, railways and farmland which hurt exports from the world’s biggest coal and iron ore shipper, figures released today showed. That has reduced tax revenue.
Surplus Planned

The government will end 23 years of spending growth to reverse budget deficits forecast to be A$49.4 billion in the year ending June 30 and A$22.6 billion the following year, according to its budget released on May 10. A Newspoll opinion survey published six days later showed Gillard’s standing among voters slipped to its lowest since she became leader in June 2010.

The International Monetary Fund forecasts Australia’s gross government borrowings will shrink to 21.8 percent of the economy in 2015 from 22.3 percent last year, giving it the smallest debt burden among developed nations after Estonia’s 5.2 percent. The U.S.’s obligations will swell to 109 percent of its economy from 92 percent
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
Piper
Member Avatar


Looking for the info but indeed Australia has a debt ceiling

It has been stealthily increased by Swan some 2 months ago

Remember seeing it on Business Insiders?
Profile "REPLY WITH QUOTE" Go to top
 
Sunder
Default APF Avatar


the debt ceiling is an interesting artificial construct anyway. It's not like the US can't borrow any more, or that they didnt want to, its just that they can't agree on what to spend the money on.

It's more like a house with a credit card that's about to be maxed out, and there is an offer of a limit increase, but requires both wife and husband to sign. But the husband wont sign it unless they can spend the new money on a tv and the wife wont spend it unless she gets a new dress out of it.

The recent crisis in the US is not really a financial crisis - there is a bigger one underneath of a budget running too far in deficit - it was a political problem. essentially it was a hung parliament.
Property speculation is a type of gambling... But everyone knows that in gambling, the house always wins in the end.
Profile "REPLY WITH QUOTE" Go to top
 
Admin
Member Avatar
Administrator

http://www.international.to/index.php?option=com_content&view=article&id=1773:debt-keeps-growing-just-like-a-cancer-always-with-excuses-of-how-we-are-going-to-cure-it-later&catid=47:reporters&Itemid=76

Quote:
 
Debt keeps growing, just like a cancer, always with excuses of how we are going to cure it later

Monday, 01 August 2011 10:07 Barnaby Joyce 0 Comments

Long, long ago I remember getting my b’s and t’s confused, and my b solidly kicked by the fourth estate after a National Press Club event, apparently this syntax error was punishable by immediate dismissal.

I must admit when I see the same mistake on the front page of the Financial Review, I do have the expectation that News of the World like the paper should be removed immediately as a literary abomination.

“The US government’s $US14.3 trillion ($13 billion) debt ceiling will further harm the US’s faltering economic recovery”

Of course if the US debt is only $13 billion, then even I would have to say that they don’t have much of a problem, considering now that Australia’s debt ceiling is at $250 billion, which is quarter of a trillion dollars. Australia has to realise that we have extended our debt ceiling and our gross debt amount is currently $194.74 billion.

For all the other problems that the Labor party is responsible for, including the closing down of the live cattle trade, building the education revolution, closing down fishing, closing down forestry and piece de resistance, the carbon tax fiasco, the thing we have to always remember is that the debt keeps growing, just like a cancer, always with excuses of how we are going to cure it later.
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
Admin
Member Avatar
Administrator

http://www.bworldonline.com/content.php?section=Opinion&title=Winners,-losers-in-world-of-debt&id=36320

Quote:
 
Winners, losers in world of debt

For a month that’s normally slow in the markets, August is turning out to be a roller-coaster ride.
First, the US finally raises its debt ceiling, but Wall Street does not react with much relief. Instead, weak spending and manufacturing data cause the markets to slide.

Then Europe piles on the problems. Italy and Spain start to give the European Central Bank heart palpitations with its bond yields rising, showing investors are demanding more to take on the risk of buying its debt. The ECB starts to buy up Irish and Portuguese bonds. That move fails to reassure anyone and European markets drop.

Wall Street freaks out over the instability on both sides of the Atlantic. The Dow drops more than 500 points. Then the roller-coaster ride gets even more frightening. Standard and Poor’s downgrades US long-term debt -- the first time in history. We see massive sell-offs in all markets around the world for several days. For two days in a row, the Seoul Kospi dips too low for the local exchange and a circuit breaker kicked in to temporarily stop trading and the panic selling. Gold hits record highs as investors run to the precious metal as a safe haven in the storm.

All this chaos is weakening the US dollar and causing alarm in countries that depend on a stable greenback.

Peter Lewis, CEO of MF Global Hong Kong says, "In Asia, the concern will be over the US dollar. Most Asian countries run large trade surpluses with the US and accumulate large quantities of foreign exchange reserves in US dollars which then can recycle back into US government bonds and agency bonds."

So at the moment, the world’s biggest players are losers. Where are the winners?

Yonghao Pu, chief investment strategist of UBS Asia Pacific, says, look to the sidelines. "I think emerging markets in Asia will benefit from this kind of a downgrade. Emerging markets like China, Taiwan, Singapore, Indonesia. Relatively speaking, we are in better financial shape," Pu says.

Indonesia’s Trade Minister Mari Pangestu agrees. She recently sat down with CNN’s John Defterios and talked about the financial instability around the world. "I think what will happen now is you end up having a diversification on the way you invest your reserves as well as investments in general and in one sense, it could probably lead to a larger inflow of capitol into other instruments including those in Asia."

Jim Rogers of Rogers Holdings in Singapore is betting on agriculture, raw materials, and currencies. "Silver, rice, natural gas -- whatever it is. Those are the people that will benefit," Rogers says.

For the past week and a half, we’ve had this stomach-churning ride in the markets. What will the rest of August hold? No one knows, but perhaps it’s best to keep your side mirrors clean. You can look for the best opportunities as the market landscape whizzes by.
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
Perthite
Member Avatar


Federal labour have increased it twice since they came to power with Rudd.
Profile "REPLY WITH QUOTE" Go to top
 
Admin
Member Avatar
Administrator

Quote:
 
Lift the debt ceiling or lose liquidity

Stephen Koukoulas

A matter of public sector financial management is turning into a risky political stoush. The government’s plan to increase the debt ceiling to $300 billion is an essential element of maintaining financial stability, fully functioning capital markets and deep liquidity in the market for Commonwealth government securities (CGS).

The opposition is railing hard against lifting the debt ceiling for reasons that have nothing to do with governance or economics, but a lot to do with a political scare campaign. National Party member Barnaby Joyce says: “If you do raise the debt ceiling, you have a rather large train rolling off the edge of a rather large cliff.” This obscure metaphor and other unsubstantiated criticisms from the opposition on the debt ceiling rise highlight a misunderstanding of the role CGS plays in Australia’s economic and financial market stability.

The global financial crisis taught governments and investors alike that liquidity in government-guaranteed securities is paramount when market ructions are at their worst. Those with a deep knowledge of financial markets, such as JPMorgan’s interest rate strategist, Sally Auld, noted that raising the debt ceiling “is the prudent thing to do. I would hope it is an uncontroversial issue.”

Her hope reflects a risk that an escalation in the political hoopla from the opposition will spill over to a change in market confidence. For now, investors are content with the debt ceiling. Government bond yields are at record lows and more than three-quarters of CGS is held by foreigners. Liquidity must be maintained to retain this confidence.

Last year, the government consulted market participants and regulators who said: “To maintain a liquid and efficient bond market that supports the three and 10-year futures market and the requirements of the new global bank liquidity standards, the panel agreed that the CGS market should be maintained around its current size – that is, around 12 to 14 per cent of gross domestic products over time.”

Linking government debt to the size of the economy means the debt ceiling will rise for at least another few decades. Reducing gross debt in a growing economy will stifle liquidity and risk scaring off foreign investors. Unfortunately, the opposition is willing to risk overseas investor confidence in Australia for the sake of a cheap political point.

If there is a change of governmentat the next election and the Coalition cuts government debt, bond market liquidity would be eroded and big investors would have good reason to sell their bond holdings. This risks market disruption not only for bonds but for the Australian dollar and official interest rates.

Stephen Koukoulas is managing director of market economics and a former adviser to Prime Minister Julia Gillard.

Read more: http://www.afr.com/p/opinion/lift_the_debt_ceiling_or_lose_liquidity_UpDb3FiVSzgXsKkuaRHpqO
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
genX
Default APF Avatar


Perthite
11 Aug 2011, 10:10 AM
Federal labour have increased it twice since they came to power with Rudd.
To pay for the mistakes of the imbeciles who were in power before them, unfortunately. You would have to be mad to want to follow Howard/Costello into government. I guess our pollies are just mad. Power mad probably.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 3



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy