- Throughout this article, the unqualified term "dollar" and the $ symbol refers to the Australian dollar.
The Australian government debt is the amount owed by the Australian federal government. The Australian Office of Financial Management, which is part of the Treasury Portfolio, is the agency which manages the government debt and does all the borrowing on behalf of the Australian government. Australian government borrowings are subject to limits and regulation by the Loan Council, unless the borrowing is for defence purposes or is a 'temporary' borrowing. Government debt and borrowings (and repayments) have national macroeconomic implications, and are also used as one of the tools available to the national government in the macroeconomic management of the national economy, enabling the government to create or dampen liquidity in financial markets, with flow on effects on the wider economy.
As of 30 June 2016, the gross Australian government debt was $420.4 billion. The government debt fluctuates from week to week depending on government receipts, general outlays and large-sum outlays. Australian government debt does not take into account government funds held in reserve within statutory authorities such as the Australian Government Future Fund, which at 30 September 2016 was valued at $122.8 billion, and the Reserve Bank of Australia. Nor is the net income of these statutory authorities taken into account. For example, the Future Fund net income in 2014-15 was $15.61 billion, which went directly into the fund's reserves. Also, guarantees offered by the government do not figure in the government debt level. For example, on 12 October 2008, in response to the Economic crisis of 2008, the government offered to guarantee 100% of all bank deposits. This was subsequently reduced to a maximum of $1 million per customer per institution. From 1 February 2012, the guarantee was reduced to $250,000, and is ongoing.
Australia's net international investment liability position (government debt and private debt) was $1,028.5 billion at 31 December 2016, an increase of $5.4 billion (0.5%) on the liability position at 31 December 2016, according to the Australian Bureau of Statistics.
Australia's bond credit rating was rated AAA by all three major credit rating agencies as at May 2017. Around two-thirds of Australian government debt is held by non-resident investors - a share that has risen since 2009 and remains historically high.
Video Australian government debt
Net government debt
Net government debt is defined by the International Monetary Fund as "gross debt minus financial assets corresponding to debt instruments". Financial assets corresponding to debt instruments include currency and deposits, debt securities and loans. In the context of the budget, general government sector net debt is equal to the sum of deposits held, government securities (at market value), loans and other borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements. The net debt to GDP ratio over time is influenced by a government surplus/deficit or due to growth of GDP and inflation, as well as movements in the market value of government securities which may in turn be influenced by movements in general interest rates and currency values.
Australia's net government debt as percentage of GDP in the 2016-17 budget was estimated at 18.9% ($326.0 billion); much lower than most developed countries. The budget forecasted that net government debt would increase to $346.8 and $356.4 billion in 2017-18 and 2018-19 respectively. However, despite continuing to rise in aggregate terms, growth in the economy means the government expects the proportion of debt to GDP to peak at 19.2% in 2017-18 before starting to fall thereafter.
The net government debt was negative (i.e. The Australian government had net positive bond holdings) in the 2006-07-year for the first time in three decades, from an original peak of 18.5% of GDP ($96 billion) in 1995-96. The reduction in net debt is attributable to the consistent budget surpluses in the mid-2000s as well as the privatisation of government assets in the preceding decade.
Maps Australian government debt
Latest budget forecasts
The federal budget is the main mechanism that determines the government's net debt position from one period to the next. A surplus (revenue is greater than expenses) allows the government to pay down its debt while a deficit (expenses are greater than revenue) requires the government to issue more debt to cover the shortfall. The 2017-18 budget has a deficit forecast of $29.3 billion, or 1.6% of GDP. This would be Australia's tenth consecutive budget deficit. The treasury estimates the deficit will reduce in both aggregate and proportion terms until returning to surplus in the 2020-21 fiscal year.
Debt ceiling
A debt ceiling on how much the Australian government could borrow existed between 2007 and 2013.
The statutory limit was created in 2007 by the Rudd Government and set at $75 billion. It was increased in 2009 to $200 billion, $250 billion in 2011 and $300 billion in May 2012. In November 2013, Treasurer Joe Hockey requested Parliament's approval for an increase in the debt limit from $300 billion to $500 billion, saying that the limit will be exhausted by mid-December 2013. With the support of the Australian Greens, the Abbott Government repealed the debt ceiling over the opposition of the Australian Labor Party.
The debt ceiling was contained in section 5 of the Commonwealth Inscribed Stock Act 1911 until its repeal in December 2013.
See also
- Australian federal budget
- Government budget
- List of sovereign states by public debt
- Taxation in Australia
References
External links
- Australian Office of Financial Management
- Katrina Di Marco, Mitchell Pirie and Wilson Au-Yeung: A history of public debt in Australia, Treasury, Commonwealth of Australia. (ca. 2011).
- Debt Statistics for Australia
- Australian government debt clock
Source of the article : Wikipedia
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