As of 5 January 2018 Australian Government public debt stood at an est. $515.6 billion at face value. Six months earlier this debt had stood at est. $500.9 billion. So government debt continues to grow.
This early January 2018 public debt breaks down as:
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$477,278m
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$34,897m
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$3,500m
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Other Securities
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$6m
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Treasury Bonds are medium to long-term debt securities that carry an annual rate of interest fixed over the life of the security, payable semi-annually.
All Treasury Bonds are exempt from non-resident interest withholding tax (IWT).
These treasury bonds were first issued between January 2006 and September 2017, with interest repayments ranging from 1.75% to 5.75% per annum due throughout 2018 and, in all but two instances the years beyond up to 2047. It is likely that at least 50% of these bonds are held by foreign investors.
The Turnbull Government appears to be using reduced government spending by way of funding cuts to essential government services and ‘reformed’ welfare payments in order to manage a portion of this debt – the remainder possibly being serviced by further bond issuance.
Given the potential to retain a higher dollar amount of cash transfers for longer periods in government coffers if the Cashless Debit Card is universally introduced for welfare recipients under retirement age, then I rather suspect that future welfare recipients may be disproportionately servicing this debt if Turnbull & Co have their way.
And while considering that growing public debt, the sustained federal government assault on safety-net welfare since 2013 and the attack on penalty rates in 2017, readers miight like to consider this……
The Australian
Parliament consists of 226 elected members sitting as MPs or senators.
Between them they are reported to own 524 properties and, in
addition to their salaries and any additional remuneration for ministerial position
or committee membership, they also receive generous parliamentary entitlements of which they freely avail themselves:
Australians have endured their longest period of falling living standards in more than a quarter of a century as growth in costs outstripped earnings for the fifth consecutive quarter, leaving households worse off than they were six years ago.
After allowing for inflation, taxes and interest costs, average household incomes dropped 1.6 per cent in the year to September, capping a sustained fall in living standards that has not been seen since the 1990-91 recession.
Economists say more than half the cost increases for households are being driven by electricity, rent, health, new housing and tobacco, while modest wage rises are being partially absorbed by workers being pushed into higher tax brackets……
After adjusting for living costs, interest and taxes, average earnings in the three months to September were 0.7 per cent lower than in the same period of 2011, which marked the peak of the resources boom.
Over the previous six years from 2005, households had seen an average improvement in their living standards of 17 per cent.
AMP chief economist Shane Oliver said the mid-year budget update delivered before Christmas provided only limited scope for tax cuts.
“To be anything more than ‘sandwich and milkshake’ tax cuts and still maintain a trajectory towards a budget surplus by 2020-21, they would have to be offset by spending savings elsewhere. That is where the politics kicks in and the government has had difficulty getting things through the Senate,” he said.
Dr Oliver said if the government was successful in getting the 0.5 per cent increase in the Medicare Levy through the Senate, it would offset the benefit of any tax cut. The Medicare Levy increase is scheduled to start on July 1 next year and increase personal taxes by $3.6 billion in its first year and $4.3bn in the second.
Although living standards stopped rising after 2011, the decline since the middle of 2016 is new and reflects both the fall in wage growth and an increase in tax payments.
The ABS Wage Price Index shows a 1.9 per cent rise last year, but this is measured before tax and records the average increase for each job. National accounts show that personal income tax collections are rising much faster than pre-tax wages, partly because more wage income is being pushed into higher tax brackets. They show a 4 per cent lift in taxes per capita over the year to September, absorbing 60 per cent of the increase in wage income per person, which rose only 1 per cent.
Much of the very strong employment growth in the past year has been in lower paying jobs in the services sector, which has reduced average incomes overall.
