Australia an exception in the debt stakes. Since the 2008/09 financial crisis, total debt has actually grown across the world’s ten largest mature economies is the finding of a study by the McKinsey Global Institute.

Australia, along with the United States and South Korea, to go against the trend with a decline in the ratio of total debt to GDP.

The McKinsey report argues that safely reducing debt and clearing the way for economic growth in the aftermath of the global credit bubble will take many years for most developed countries and involve difficult choices. Major economies, it says, have only just begun deleveraging. In only three of the largest mature economies — the United States, Australia, and South Korea — has the ratio of total debt relative to GDP fallen.

The private sector leads in debt reduction, and government debt has continued to rise, due to recession. However, history shows that, under the right conditions, private-sector deleveraging leads to renewed economic growth and then public-sector debt reduction.

In the United States, Canada, and Australia, household debt is the largest component of overall debt. In Canada and Australia, there are concerns about the high ratio of household debt relative to GDP, even though neither country has experienced a banking crisis.

And so it came to pass. The “absolutely wonderful outcome for the income of lobbyists” that I feared last week would be the outcome of Labor reneging on its deal to introduce a mandatory pre-commitment scheme for poker machines.

Mount a strong campaign and Prime Minister Julia Gillard will cave in, especially if the target group primarily is Labor MPs from New South Wales.

Not the fastest workers. There’s one thing you can say for sure about Fair Work Australia. It is not the fastest working organisation in the country. Surely establishing whether there is a case against how Labor MP Craig Thomson behaved when national secretary of the Health Services Union cannot be that hard.

Peter Fray

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