That's not a debt disaster — THIS is a debt disaster: Joe and Tony’s big con

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Alan Austin presents another exclusive report the mainstream media will not touch Australia’s rapidly escalating borrowings since Abbott and Hockey came to office promising to end ‘Labor’s debt disaster’.

Read also Alan Austin's recent previous outstanding expose on the Abbott / Hockey debt blowout:

AUSTRALIA’S DEBT since Joe Hockey took charge of the nation’s finances has increased dramatically.

The rate of expansion shows no signs of slowing.

Monthly finance figures for July and August were quietly released yesterday — late on Friday night, several weeks late, after seemingly being sat on by Cormann for at least a week*.

They show the Abbott Government has achieved precisely the opposite of its solemn pre-election undertaking to bring about

‘… a reduction of $30 billion in net debt.’

In July and August alone – two months for which it is impossible for PM Tony Abbott to blame Labor for any mismanagement – the debt expanded from $202.46 to $217.55 billion.

That’s more than $15 billion, a rate of increase above 3.6% per month. If continued, that rate would double the debt at the last election by next July.

But let’s start at the beginning — with Labor’s borrowings, which the Coalition screamed from the rooftops was ‘skyrocketing’ and promised countless times to reduce.

Back when monthly reports from the Finance Minister were presented every month and on time, the final report prepared for the Rudd Government period, for 31 August 2013, showed the forecast end of year net debt for 2013-14 at $178.10 billion.

We can take that as the level for which Labor must accept responsibility. It sounds pretty high, but is only a small percentage of the nation’s gross income – just 11.3% of GDP – and extremely low when compared with other developed countries.

(Source: Gerg Jericho via abc.net.au)

As explained here two weeks ago, the next monthly report, September 2013 ‒ prepared after Hockey had become treasurer and Mathias Cormann finance minister ‒ also showed projected year-end debt steady at $178.10 billion. As did October’s and November’s.

In December, however, after Hockey and Cormann had abandoned Labor’s budget measures by cutting taxes and spending recklessly on ministerial travel, royal commissions, a Reserve Bank advance and other needless fripperies, the debt projection rose suddenly to $191.52 billion.

The monthly reports in January, February, March and April 2014 maintained this year-end projection. Then, in May, it jumped again to $197.85 billion.

That report, released four months ago, was the last until last night.

Two weeks ago the Final Budget Outcome revealed the actual debt level reached by 30 June 2014. This was $202.46 billion, more than $24 billion – or 13.7% – higher than forecast had the previous Government continued in power.

The data released yesterday shows that in July, debt increased from $202.46 billion to $208.15 billion. It jumped again in August to $217.55 billion. So the total increase above the level Labor left last year is now $39.45 billion ($217.55 less $178.10) — up an extraordinary 22.1%.

That is a rate of 3.66% per month just since June — or an annual compound rate of 54%.

The monthly figures released last night also reveal the targeted level of debt Abbott, Hockey and Mathias have set themselves for the end of the current financial year.

Is this in line with ‘a reduction of $30 billion’ as promised before the last election? Or a smaller reduction? Or larger?

In fact, it is a huge increase. The target is set at $226,388 — a boost in borrowings for the year of $23.9 billion, or 11.8%.

And of that projected $23.9 billion increase, they have already borrowed more than $15 billion — in just the first two months.

Last night’s release also shows the projected total interest bill for the full year 2013-14 at $14.7 billion [Note 3, page 6].

That is up from the final for the previous year of $10.8 billion.

Still ringing in our ears are the words of Mr Abbott at an education conference last year:

“We’re currently paying interest on it [Government debt] at the rate of over $7 billion a year that’s almost as much as the national government’s entire higher education budget. We’re racking up some $140 million a week in interest payments alone ...”

That was then — way back in 2013.

Now, 13 months after Abbott gained office, the interest bill is $283 million a week.

Are there any signs this situation is likely to turn around in the near future?

No. None whatsoever.

Revenue from wages is below expectations and commodity prices are falling — both of which will reduce tax revenue.

The Government has failed to get its budget through the Senate and remains unable – fortunately for the nation’s disadvantaged – to cut the outlays on pensions and benefits it wants to slash.

On the expenditure side, there seems no inclination to rein in the wasteful spending of the last 13 months and every indication of cost blow-outs on security, border protection and war.

Hence all pre-election commitments to ‘balance the books, live within our means and return the budget to surplus as quickly as possible’ are now clearly evident for what they were all along — tawdry lies. Lies, regrettably, that Australia’s craven, captured mass media could be relied upon to amplify.

They were baseless slanders against the previous administration made merely to discredit, destroy and replace it.

If there is no debt or deficit crisis now – and there isn’t – then there was certainly no calamity a year ago when Labor’s projected debt was $39 billion below the level today.

The facts are clear and ‒ unlike the Government and our mainstream media ‒ the figures don’t lie.

* The media release from the Finance Department is dated 3 October, however the one from Cormann's office is dated 10 October 2014 — the date the information became public.

You can follow Alan Austin on Twitter @AlanTheAmazing.

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