Comments on: The $25 billion debt expansion and tax cut that wasn’t in the budget http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/ now with extra source Sun, 12 Feb 2012 11:47:26 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: JamesK http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18967 JamesK Thu, 01 Jan 1970 10:00:00 +0000 #comment-18967 I cannot see how one could reasonably make the comment you have stuart. It was dishonest not to have announced this last Tuesday. It requires legislation to be enacted and they are not "minor" changes. Media management by the state labor government here in Victoria verges on being "creepy" and one wonders wether Rudd and more readily Swan have taken a leaf out of the Bracks/Brumby songbook. I cannot see how one could reasonably make the comment you have stuart. It was dishonest not to have announced this last Tuesday. It requires legislation to be enacted and they are not “minor” changes. Media management by the state labor government here in Victoria verges on being “creepy” and one wonders wether Rudd and more readily Swan have taken a leaf out of the Bracks/Brumby songbook.

]]> By: Tom Conley http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18968 Tom Conley Thu, 01 Jan 1970 10:00:00 +0000 #comment-18968 Aaah no ... the reason why the government is doing this is to maintain the govt bond market ... an essential part of any financial system If you want to focus on debt try private debt Aaah no … the reason why the government is doing this is to maintain the govt bond market … an essential part of any financial system

If you want to focus on debt try private debt

]]> By: stephen mayne http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18969 stephen mayne Thu, 01 Jan 1970 10:00:00 +0000 #comment-18969 Stuart, I'm not saying abolish government debt at all. Rather, let's just be open about about debt management and disclose what is owed, when, what it costs and the investments it is funding. Government debt is perfectly fine, but there's also an argument that you should be trying to reduce debt in the middle of a once-in-a-life-time boom. The same goes for public sector superannuation. Fund it if you can, but disclose the liability and use consernative accounting if you can't. Stuart, I’m not saying abolish government debt at all. Rather, let’s just be open about about debt management and disclose what is owed, when, what it costs and the investments it is funding. Government debt is perfectly fine, but there’s also an argument that you should be trying to reduce debt in the middle of a once-in-a-life-time boom. The same goes for public sector superannuation. Fund it if you can, but disclose the liability and use consernative accounting if you can’t.

]]> By: stuart http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18970 stuart Thu, 01 Jan 1970 10:00:00 +0000 #comment-18970 Fair call disclose what you owe. Thats fine with me. But you cant manage the level of government debts when youre trying to maintain an interest rate. To keep the interest rate at a certain rate you have to take on as much debt as the market is willing to loan at that rate, otherwise the interest rate will fall and youre no longer in control of monetary policy. This is true whether in a boom or a recession. And with the cash rate increasing and the subprime crisis you have to expect goverment debt to increase, it simply reflects the fact that government debt is a good investment. To suggest that this is in some way a poor government policy (as this headline seems to) is false. Fair call disclose what you owe. Thats fine with me. But you cant manage the level of government debts when youre trying to maintain an interest rate. To keep the interest rate at a certain rate you have to take on as much debt as the market is willing to loan at that rate, otherwise the interest rate will fall and youre no longer in control of monetary policy. This is true whether in a boom or a recession. And with the cash rate increasing and the subprime crisis you have to expect goverment debt to increase, it simply reflects the fact that government debt is a good investment. To suggest that this is in some way a poor government policy (as this headline seems to) is false.

]]> By: Tom McLoughlin http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18971 Tom McLoughlin Thu, 01 Jan 1970 10:00:00 +0000 #comment-18971 Cracking read I thought, high on the index too. Meglo is a very good journo, it's human to err. I imagine we read a thesis in The Oz now, or a new book. Go Meglo - the Debt Decade. Cracking read I thought, high on the index too. Meglo is a very good journo, it’s human to err. I imagine we read a thesis in The Oz now, or a new book. Go Meglo - the Debt Decade.

]]> By: stuart http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18972 stuart Thu, 01 Jan 1970 10:00:00 +0000 #comment-18972 Enough of Stephen Mayne's "abolish government debt" already! Stephen, a simple fact. The government goes into debt whenever a bank buys RBA securities, the primary tool the RBA uses to control interest rates. To maintain the cash rate the RBA always has to be willing to go into debt and borrow money from banks at that rate. If the government were to abolish all its debts, or even put limits on the ammount of debt they hold, they would relinquish their ability to control interest rates. Therefore while the RBA is still independent, and discretionary monetary policy is still used the government will hold some ammount of debt. Now please stop writing stories about it! Enough of Stephen Mayne’s “abolish government debt” already! Stephen, a simple fact. The government goes into debt whenever a bank buys RBA securities, the primary tool the RBA uses to control interest rates. To maintain the cash rate the RBA always has to be willing to go into debt and borrow money from banks at that rate. If the government were to abolish all its debts, or even put limits on the ammount of debt they hold, they would relinquish their ability to control interest rates. Therefore while the RBA is still independent, and discretionary monetary policy is still used the government will hold some ammount of debt.
Now please stop writing stories about it!

]]> By: jimmy dazzle http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18973 jimmy dazzle Thu, 01 Jan 1970 10:00:00 +0000 #comment-18973 i agree with stuart. stephen mayne is being a teensy bit disingenuous in his reply i think coz his article implies labor govts always run up huge "debt" (bad thing) that it then requires a coaltion govt to clean up the mess (good thing). as others have pointed out there are valid and necessary reasons for debt. one being it pays for the building of infrastructure into the future that future generations will use and enjoy and can help to pay for. nothing wrong with that. god knows we need a better broadband set up then we've got atm. americans and europeans have connections 10-100 times faster than ours. how will we ever compete with that? in a country this big it's really only govt who can fork out the big bucks to do it. good on 'em i say for doing it. and let's not forget that sm did work for kennet who privatised everything in victoria he could see and gave thousands of teachers and other workers the sack.... i agree with stuart. stephen mayne is being a teensy bit disingenuous in his reply i think coz his article implies labor govts always run up huge “debt” (bad thing) that it then requires a coaltion govt to clean up the mess (good thing). as others have pointed out there are valid and necessary reasons for debt. one being it pays for the building of infrastructure into the future that future generations will use and enjoy and can help to pay for. nothing wrong with that.

god knows we need a better broadband set up then we’ve got atm. americans and europeans have connections 10-100 times faster than ours. how will we ever compete with that? in a country this big it’s really only govt who can fork out the big bucks to do it. good on ‘em i say for doing it.

and let’s not forget that sm did work for kennet who privatised everything in victoria he could see and gave thousands of teachers and other workers the sack….

]]> By: davo http://www.crikey.com.au/2008/05/21/the-25-billion-debt-expansion-and-tax-cut-that-wasnt-in-the-budget/#comment-18974 davo Thu, 01 Jan 1970 10:00:00 +0000 #comment-18974 So, who runs the economy? The lenders, the RBA, or th Government? How much impact does private det have? What about savings? What about loan defaults? All of these are interrelated. It's time to redo the system, but fat chance anything happening. Economics is easy. The meaningless jargon they wrap it round is designed to make it sound hard. So, who runs the economy? The lenders, the RBA, or th Government? How much impact does private det have? What about savings? What about loan defaults? All of these are interrelated. It’s time to redo the system, but fat chance anything happening.

Economics is easy. The meaningless jargon they wrap it round is designed to make it sound hard.

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