Don’t say you weren’t warned. Peter
Costello was back pushing his debt free furphy yesterday. Yet when you
look at the detail of the budget, such as this chart,
you’ll see that taxpayers have about $5 billion in debt falling due in
each of the next nine years, making $45 billion in total.

If we’re really no longer paying Labor’s $8 billion a year in interest, then why does this table show interest payments will average $4 billion a year over the forward estimates?

So,
does Cossie have $45 billion in cash sitting around, thereby sustaining
his claim to be “net debt free”? Err, no. The $30 billion that will
soon be in the Future Fund cannot be netted off against government
borrowing, because that money is actually owed to past public servants,
but is still massively short of the mark given that the unfunded
superannuation liability is projected in table two here to continue soaring as follows:

2005-06: $95.9bn
2006-07: $99.6bn
2007-08: $103.4bn
2008-09: $106.8bn
2009-10: $110.5bn

Even Enron didn’t try to claim its debt didn’t exist because there was money set aside for employee pensions. Monday’s Four Corners story on the Westpoint collapse demonstrates the point well, because this is what receiver Mark Korda said:

We very quickly came to the view that Westpoint was
hopelessly insolvent. And we advised ASIC the next day. Westpoint had
$4,000 in the bank and had payroll due of $1.6 million and hadn’t even
paid the employees’ superannuation for many employees for 12 months.

You
see, only the most crooked companies like Westpoint don’t provide for
past superannuation liabilities – yet that’s exactly how the Howard
Government has cooked the books to the tune of $27 billion over the
past decade, given that they inherited a $69 billion unfunded super
liability in 1996.

However, despite this ruse it is true to say
that “worth something day” has now officially made it into the forward
estimates because this is what the government is now predicting it will
be worth over the next five years (last year’s forecasts are in
brackets):

2005-06: -$21.77bn (-$25.42bn)
2006-07: -$9.4bn (-$17.62bn
2007-08: $634m (-$10.38bn)
2008-09: $12.13bn (-$2bn)
2009-10: $25.36bn

Yes,
by June 2007, if the Commonwealth Government was a listed company, it
would no longer be insolvent. But its market capitalisation of $635
would still leave it out of the ASX 200. However, by June 2010 we’re
talking serious net worth of $25 billion and that would be a fine
achievement, albeit still well below the net worth of our two richest
states, NSW and Queensland.