When you spend more than you earn…
…Eventually it catches up with you.
We are seeing this unfold in the EU.
And it’s sure catching up to Australia as well.
Thanks to some good leg work done by blogger Barnaby was Right, our treasurer, Wayne Swan, is essentially predicting a 57% blowout in net debt this year.
What was supposed to be around $105-odd billion (remember this is net debt not gross debt which is close to double) is now predicted to be a little over $130 billion.
- End 2011: almost $85 billion
- First end 2012 estimate: about $105 billion (about a 25% increase in just one year)
- Revised estimate: a little over $130 billion (a whopping 57% increase!)
And the thing is, it’s not as if revenue has changed all that significantly. In fact, if anything, it’s gone up.
Some numbers sent in by Bolt reader John Comnenus posted on Andrew Bolt’s blog re-entered into a table:
Professor Sinclair Davidson over at Catallaxy has some slightly different numbers but the general trend is still the same (the way they calculate budgets is a bit different since the ALP took government).
Whichever way you look at it, we’ve gone from about a $20b budget surplus, to (and I’ll use Davidson’s figures) to a $55b deficit, followed by a $35b deficit, followed by a $20b deficit, followed by a $35b deficit.
That’s $55b + $35b + $20b + $35b = $145 billion!
Barnaby is Right had the latest blowout of 57% (from $84.5b to $130-odd billion) so at $145-odd billion, maybe that 57% could even be revised up to a whopping – give or take – 71%.
But no worries, that $130b or $145b is only our net debt.
Our real debt (gross debt) stands at around $220b and climbing by about $2b a week.
Now, to be sure, that’s lucky if it’s even a mere 20% of our GDP considering you have countries like America at around 101% of GDP.
But with America not yet out of the woodworks, and Europe teetering on the abyss, when basically no-one has any money (China might buy us but they won’t save us, and even they might not be doing as well as everyone imagines), is now really the time to be living a champagne lifestyle on a beer budget?