Now It’s Amanda Vanstone Who Can’t Understand Debt & Economics
If anyone ever wants to see an example of why people should stick to talking or writing about stuff they know something about, I strongly recommend Amanda Vanstone’s article in today’s Age.
Ms Vanstone has moved to comment on government debt and oh what a humiliating comment it is. I assume Ms Vanstone and The Age will have to run some corrections to the factual errors in the article.
The first error is just a simple percentage change calculation. Ms Vanstone said:
- “In 2009 Labor sought to lift the Commonwealth statutory borrowing limit from $75 billion to $200 billion – a 133 per cent increase.”
The rise was actually 166.7%.
Ms Vanstone then goes on:
- “By the time a new government takes office, net government debt will be close to $300 billion.”
If Ms Vanstone cared to go to page 10-8 of Budget Statement 10, she would see than net government debt was currently $142.5 billion or 9.6% of GDP. When the next election comes around some time in second half of 2013, net debt will be $143 billion or 9.2% of GDP and be on track to fall to $132 billion or a miniscule 7.3% of GDP by 2015-16.
Then there is this:
- “Forget about the Treasurer’s pea-and-thimble surplus. It is a farce and everyone, probably including him, knows it.”
Well all three major credit rating agencies have affirmed Australia’s triple-A credit rating after the Budget, which suggests they don’t know the Budget contains a “pea-and-thimble surplus”. Oh and by the way, the Howard government never had the 3 ratings agencies have Australia triple-A. This is something only achieved late last year for the first time. Bond investors, who have a ruthless attitude to budgets and government debt as we can see throughout Europe at the moment, have pushed the yields on Australian government bonds to all time lows in the days after the Budget. I suspect they know something Ms Vanstone doesn’t understand.
Here is the article in full: