The Truth Will Set You Free .....
Right now the Australian Federal Labor Government is at pains to tell everyone - including us the mug-punters and the International Monetary Fund (IMF), that it will not exceed its own, self-imposed, borrowing limits. However it raised the debt limit ... again. 'How much? $200 billion. And here's a worry. If you work in a bank's money market operation; or if you are a politician; the millions turn into billions and it rolls off the tip of the tongue a bit too easily.
But every dollar that is borrowed must be repaid ... by you, by me and by the rest of the country. Just after 5 o'clock tonight I did a bit of maths for Jason Morrison (Sydney radio presenter). But it's so staggering its worth repeating now. First though; here's what Ex-P.M. Rudd has been saying about - what he calls - these temporary borrowings. Remember Those Words: Temporary Deficit. The total Government debt will probably end up around $200 billion. So here's a very basic calculation ... I used a home loan calculator to work it out ..... it's that simple .. $200 billion is $200,000 million. The current 10 year Government bond rate is 4.67 percent. I worked the loan out over a period of 20 years. Now here's where it gets scary .... really scary. The repayments on $200 billion, come to more than one and a quarter billion dollars - every month - for 20 years. It works out we - as taxpayers - will be repaying $15.4 billion in interest and principal every year .. $733 for every man woman and child - every year.
The total interest bill over the 20 years is - get this - $108 billion.
Over 50 years ... banana republic numbers. Remember, this is a Government, that just 4 years ago, had NO debt. I repeat ... NO debt. In fact it had enough money to create the Future Fund, to pay the future liabilities of public servants' superannuation, and it had enough to stick $20 billion into the Building Australia Fund ..... So who is running our country? The six leading members of the Government have a collective work experience of 181 years, but only 13 in the private sector. However of those 13 years 11 years were spent working as trade union lawyers. Therefore of the 181 years collective experience, only two years were spent in the private sector.
So out of those 181 years: - no years spent running their own business - no years spent starting their own business - no years spent as a director of a family business or a company - no years as a director of a public company - no years in a senior position in a public company - no years in a senior position in a private company - no years working in corporate finance - no years in corporate or business restructuring - no years working in or with a bank - no years of experience in the capital markets - no years in a stock-broking firm - no years in negotiating debt facilities with banks - no years running a small business - no years at the World Bank or IMF or OECD - no years in Treasury or Finance. But these people have plunged Australia into unprecedented debt, and now threaten to torpedo employee share schemes, which they plainly don't understand. Well, in a way you can't blame them. It's clear the electorate did not do their homework, because the Government is there by right. Ah but they are Labor and people vote for them because Labor is good for the working family right???