The extreme Socialist IMF is goading Aust into increasing foreign govt borrowing because they want Aust to fall into the IMF trap.

This is the sort of Socialist slime that would make Socialist Shorty DROOL and dream of increasing foreign govt debt to $1 trillion in JUST THE 1st YEAR!!!

The Socialist UN want to get control of Aust as part of their eventual One World Govt fiasco.

Beware the Socialists macabre plans for Aust!!!!




Morrison rejects IMF, OECD calls to use boost debt spending
DAVID UREN Economics Editor Canberra The Australian 12:00AM January 9, 2017


The IMF is also pushing Australia to increase its budget spending.

The OECD believes falling interest rates have given the Australian government the scope to more than double its net debt to stimulate the economy, while it calculates that it could spend an additional $8 billion a year on ­infrastructure for about two years without affecting the long-term trajectory of its debt.

Both the OECD and the IMF have been urging the Australian government to ease up on budget repair and lift spending as part of their global campaign to lift ­economic growth.

They are using the concept of “fiscal space”, or the ability to raise additional debt without ­provoking an adverse market ­reaction, to argue that governments, particularly in the ­advanced world, should be using fiscal policy rather than relying on central banks to support their economies.

Despite the growth in debt since the financial crisis and continuing budget deficits, they maintain that the fall in interest rates provides an opportunity for most governments to boost growth.



“For most of the period since the GFC, there has been too much reliance on monetary ­policy to support growth. There is a risk that fiscal policy will be overburdened in a similar way, adding new imbalances instead of correcting them, and posing risks to macroeconomic and financial stability,” BIS general manager Jaime Caruana says, adding that fiscal space is a “slippery” concept.

However, the OECD has put it at the centre of its economic ­strategy, with 335 references to ­fiscal space in its latest economic outlook. “Policymakers should closely examine fiscal space; low interest rates enable many ­countries to boost hard and soft ­infrastructure and other growth-enhancing initiatives,” its chief economist, Catherine Mann, wrote in the outlook editorial.

The OECD says that measures of fiscal space have risen in most OECD countries over the past two years, with lower interest rates more than offsetting the headwinds from lower potential growth and higher debts.

Potential growth rates across the advanced world have halved since the financial crisis from 2 per cent a year per capita to 1 per cent, mainly as a result of weak business investment and declining productivity. This makes it harder for governments to raise the revenue to service growing debts.

However, the OECD says ­falling interest rates have given governments the opportunity to lock in long-term low-cost debt. Its modelling assumes that countries will make savings or raise tax ­revenue as their debt rises up to a point, beyond which the ­additional savings become too hard and default becomes the ­easier ­option and that financial markets will anticipate this, pushing rates higher as the limit is ­approached.

The modelling exercise shows that since 2014, slowing potential growth has reduced Australia’s ­fiscal space by 30 per cent of GDP, but lower rates have increased it by about 55 per cent, with the net ­result that Australia’s scope to ­borrow, before financial markets become concerned, has increased by about 25 per cent of GDP.



The benchmark study on which the OECD’s work is based suggests “fiscal fatigue” — the ­reluctance to find savings to cover debts as they fall due — does not set in until net debts exceed 100 per cent of GDP and identifies Australia, along with South Korea and Norway as having the greatest scope to raise debt further.

The OECD maintains that well-designed infrastructure ­investment can be undertaken without lifting debt-to-GDP ­ratios, because the resulting rise in economic growth will exceed the increase in debt. It estimates Australia could increase its deficit by 0.5 per cent of GDP (roughly $8bn at present) for about two years without affecting the debt profile.

The IMF is also pushing Australia to increase its budget spending. “Australia has fiscal space even though recent budget targets have been missed and debt has risen,” the fund’s review team concluded at the end of their annual review of Australia late last year. “Metrics such as the debt-to-GDP ratio suggest that there is fiscal space under both the baseline and economic stress scenarios,” it said.

Continues overleaf as Paywall involved

When interest rates are low it is a good time to borrow for large capital projects. That is just commonsense. Said capital projects last for decades and boost the economy so paying for themselves. At the moment we have high and growing unemployment and underemployment

Why can’t you understand that? If you want to buy a house would you borrow when interest rates on mortgages are 4% or when they are 14%?

Jovial Monk wrote on Jan 9^th, 2017 at 6:24am:



are you ******* serious?

what an absolute dickhead...

you are the type of person who votes for the labor/greens coalition who will strangle Australia with debt selling out future generations to pay for your lazy wasteful arse...

you are a halfwit and a disgrace... 

Oh my very own personal troll, Poor Stunned consumed by envy and jealousy, is following me around like a faithful hound.

How touching.

The Mechanic,

bore it up the Jolly Monk he deserves it as he is just a stirrer.

President Elect, The Mechanic wrote on Jan 9^th, 2017 at 6:45am:

Another abusive rightard.

Can you point to a thing I said that was wrong?

Are interest rates high or low?

Are jobs disappearing and part time jobs replacing fulltime jobs?

juliar wrote on Jan 9^th, 2017 at 7:11am:

Was there frantic activity to rebuild the nation in the 50s and 60s? Nope. There was investment like the Snowy Mountains Scheme, roads etc.

We need to do the same now. Roll out FTTH not this junk MTM that does practically nothing to boost internet speeds and is already hampering businesses because of low speeds and frequent dropouts. There is work needed on main roads and railway lines, ports etc. That would create jobs, good jobs.

Instead the Libs are wasting $60Bn (and the rest. . .) on the MTM where the stupid FTTN bit has cost so much that the HFC areas will not see any increase in speeds. The MTM will not boost jobs, exports or GDP where FTTH would have.

Interest rates are low. This is the time for governments and companies to borrow to build productive infrastructure.

JM,

your scrambled Socialist thinking is confusing.

You seem to forget Aust has just gotten a AAA credit warning.

Mal and Pauline's hands are tied by the crummy Senate and the hostile to Aust Labor and the Greenies.

You also conveniently overlook that the malignant Greenies would do everything in their overseas funded power to STOP any significant development.