GILLARD Government debt levels are forecast to blow out by 80 per cent to $165 billion in this term alone - equal to more than $14,000 for every working Australian.

Analysis of Budget documents reveals that between the 2010 election and Federal Treasury's update in October last year, the 2012-13 net debt estimate rose $54 billion to $144 billion.

With Wayne Swan having junked the Government's commitment to a surplus this financial year, Bank of America Merrill Lynch now forecasts Treasury will raise the estimate by a further $21 billion in the May budget.

"The government is starting to develop some form when it comes to over-estimating the improvement in its budget balance," Bank of America Merrill Lynch chief economist Saul Eslake said yesterday.

Ahead of the budget, the Coalition is honing in on a number even larger than net debt - the total value of bonds and other securities issued by the Government, or gross debt, which has ballooned from $151 billion at the 2010 poll to $267 billion now. In the last budget the Government raised the gross "debt ceiling" from $250 billion to $300 billion.




Opposition Leader Tony Abbott believes Mr Swan will increase it again in May.

Mr Abbott told News Limited yesterday: "If Labor is determined to increase the cap on gross debt above $300 billion, if they cannot show a credible and speedy path back to surplus, if they cannot show a plan to start seriously paying off the debt, it will add further weight to our planned No Confidence motion in the Gillard Government.''

Mr Swan's spokesman said the Government had no plans to raise the gross debt limit. Merrills' Mr Eslake said the increase that had already occurred was "troubling".

"If the trends that look increasingly obvious aren't addressed at some point we might cross that threshold from safe territory to dangerous territory very, very quickly," he said.

Monash University Professor of Business and Economics Jakob Madsen said the gross debt rise was "disturbing".
"It's a dangerous trend and it's at the wrong time. It's completely unnecessary to hand out left, right and centre and the way they do it is not very clever," Professor Madsen said.

Business Council of Australia CEO Jennifer Westacott said spending had grown "out of step" with revenue.

"If that doesn't change we are going to have serious public debt problem," Ms Westacott said.

Mr Eslake, Professor Madsen and Ms Westacott all said Australia did not currently have a debt crisis.

But, Ms Westacott said, "we do have a budget management crisis".

there's a debt  ??????

John Smith wrote on Mar 27^th, 2013 at 7:15pm:



No debt here

$1B/month in interest payment is actually renamed as Thomo's Slush Fund