Federal debt boss: why borrowing isn’t easy

Original article by Adam Creighton
The Australian – Page: 4 : 26-Aug-19

Australian Office of Financial Management CEO Rob Nicholl has rejected suggestions that the federal government’s capacity to increase its borrowings has been boosted by the downturn in bond yields. The yield on 10-year government bonds fell below the cash rate of one per cent earlier in August, and Nicholls argues that demand for government debt has not risen despite a global downturn in bond yields. The federal government is resisting pressure to ramp up its infrastructure spending instead of prioritising a return to a Budget surplus.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT

States climb $180bn debt mountain

Original article by Michael Roddan
The Australian – Page: 1 & 6 : 19-Jun-19

The combined net debt of Australia’s state and territory governments is set to exceed $184bn over the next four years, compared with just $81bn in 2018-19. Increased investment in infrastructure will be a key contributor to the debt blowout, and Robert Carling of the Centre for Independent Studies stresses the need for such projects to be subject to a cost-benefit analysis. He adds that New South Wales and Victoria could potentially be at risk of losing their AAA credit ratings if their net debt continues to rise, although he says this is unlikely in the near-term.

CORPORATES
THE CENTRE FOR INDEPENDENT STUDIES LIMITED, AUSTRALIAN LABOR PARTY, MOODY’S INVESTORS SERVICE INCORPORATED, DELOITTE ACCESS ECONOMICS PTY LTD, NEW SOUTH WALES. THE TREASURY, SOUTH AUSTRALIA. DEPT OF TREASURY AND FINANCE

Coalition defuses debt bomb

Original article by Simon Benson
The Australian – Page: 1 & 2 : 2-Apr-19

Prime Minister Scott Morrison has rejected suggestions that the April 2019 Budget will be a ‘cash splash’ ahead of the federal election, stressing the government’s track record for fiscal discipline. Meanwhile, the Budget papers are forecast to show that Australia’s net debt will be reduced to zero by 2028-29 under the Coalition, compared with $370bn at present. The Budget is expected to remain in deficit for 2018-19, although it is likely to be lower than the $5.2bn that was forecast in the mid-year update. The government is tipped to bring forward the second and third stages of its tax cuts package.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIAN LABOR PARTY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN FEDERAL POLICE, AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION

PM pledges more jobs, no debt

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 29-Jan-19

Prime Minister Scott Morrison will use a speech in Brisbane on 29 January to commit the Coalition to creating an additional 1.25 million jobs over five years if it wins the 2019 federal election. He will note that the Coalition has created more than 1.2 million jobs since it won the 2013 election. Morrison will also indicate that his government will aim to clear Australia’s net debt within a decade. It currently stands at $351.9bn, or 18.2 per cent of GDP. The mid-year Budget update had forecast that net debt will fall to 1.5 per cent of GDP in 2028-29.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA

Treasury warns on Australia’s debt

Original article by John Kehoe
The Australian Financial Review – Page: 9 : 20-Nov-18

The federal government’s net debt was $342bn at the end of 2017-18, which equates to 18.6 per cent of GDP. Although this is relatively low compared with many nations, Treasury secretary Philip Gaetjens says debt needs to be reduced to ensure that Australia is prepared for potential economic shocks in the future. He notes that Australia’s healthy fiscal position in 2007 helped the economy to ride out the global financial crisis. Gaetjens has also expressed concern about a blowout in global debt in the wake of the GFC.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

$1 trillion debt bomb buried in budget papers

Original article by Adam Creighton
The Australian – Page: 1 & 6 : 21-Jun-18

Analysis of budget documents shows that the net financial liabilities of Australia’s federal, state and territory governments will top $A944bn in June 2021, which is equivalent to about $A36,000 per person. Infrastructure projects will be a major contributor to the debt blowout, with New South Wales and Victoria unveiling plans to ramp up spending on infrastructure over the next four years. Meanwhile, credit ratings agency Moody’s has expressed concern about the NSW government’s increased debt in its 2018 Budget, warning that it could affect the state’s credit profile.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, NEW SOUTH WALES. THE TREASURY, AUSTRALIA. DEPT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT, INFRASTRUCTURE PARTNERSHIPS AUSTRALIA, QUEENSLAND. TREASURY

Almost back in black as $126bn sliced off debt

Original article by Adam Creighton
The Australian – Page: 1 & 6 : 9-May-18

The Federal Government has forecast a modest Budget surplus of $A2.2bn in 2019-20. The Budget had previously been expected to return to surplus in 2020-21, compared with a likely deficit of $A18.2bn in 2017-18. Meanwhile, Australia’s gross debt is now slated to be $A558bn in 2027-28, compared with expectations of $A684bn in the mid-year Budget update in December. Net debt is expected to fall to 3.8 per cent of GDP by 2029, down from a peak of 18.6 per cent in 2017-18.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, STANDARD AND POOR’S FINANCIAL SERVICES LLC

Budget to fail debt test

Original article by Bevan Shields
The Sydney Morning Herald – Page: 1 : 8-May-18

Former federal treasurer Peter Costello says the Coalition government has not done enough to reduce government debt. Costello claims it would require the Budget to be in surplus for 10 years in a row for it to be paid off, and he has urged the government to cut spending by at least $A18 billion to address the debt issue. Costello supports Treasurer Scott Morrison’s goal of setting the government’s overall tax collection rate at 23.9 per cent of GDP, but says it should apply the same target to government spending.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Aussie debt surges as world pares back

Original article by David Uren
The Australian – Page: 1 & 4 : 19-Apr-18

Data from the International Monetary Fund shows that the combined debt of Australian governments is expected to peak at 41.7 per cent of GDP in 2018, compared with just 16.7 per cent in 2009. Japan and Spain are the only major advanced countries to have recorded faster growth in government debt over the last decade. However, the IMF has forecast that Australia’s gross debt will fall to 32.2 per cent over the next five years. Meanwhile, nearly $A60bn worth of Australian government debt is due to mature in the next two years, which is equivalent to 3.1 per cent of GDP.

CORPORATES
INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY

Our debt pile grows at world-record pace

Original article by David Uren
The Australian – Page: 4 : 5-Mar-18

Data from the OECD shows that Australia is one of just 10 advanced economies that have increased their debt by more than six per cent of GDP since 2012. The combined debt of Australia’s federal and state governments has increased by 12 per cent of GDP over the last five years. In contrast, New Zealand has reduced its debt by nine per cent over this period. Meanwhile, the average repayment term for Australia’s debt has risen from less than six years prior to the global financial crisis to nearly eight years.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA