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Thursday, 9 February 2012
Page: 729

Commonwealth Debt

(Question No. 744)


Mr Robb asked the Treasurer, in writing, on 21 November 2011:

(1) What sum was the Australian Government's total gross debt (a) when the 2007-08 Budget was delivered, and (b) on 17 November 2011.

(2) What is the percentage of growth in gross Government debt between the two periods in part (1), and can the Minister indicate how this percentage compares to that of OECD countries including Germany, France, Italy, the United States, Spain, Norway, Iceland, Ireland, the United Kingdom, New Zealand, Israel and Chile.

(3) In which financial year does the Government estimate it will reach the new Commonwealth debt ceiling of $250 billion.

(4) Is the Government considering increasing the debt ceiling beyond $250 billion.

(5) Between the two periods in part (1), what total sum of interest has the Commonwealth paid on its total borrowings.

(6) What is the latest estimate for the (a) Government retiring all Commonwealth net debt, and (b) Federal Budget's 'structural deficit'; and as a percentage of GDP, how does this compare with other OECD countries.


Mr Swan: The answer to the honourable member's question is as follows:

(1) In the 2007-08 Budget, the market value of Commonwealth Government Securities (CGS) on issue as at 30 June 2008 was estimated to be $59.3 billion. The market value of CGS is not available on a daily basis. In the 2011-12 MYEFO, the market value of CGS on issue as at 30 June 2012 was estimated to be $253.5 billion.

(2) In the 2007-08 Budget, the market value of CGS on issue as at 30 June 2008 as a percentage of GDP was estimated to be 5.0 per cent ($59.3 billion). In the 2011-12 MYEFO, the market value of CGS on issue as at 30 June 2012 as a percentage of GDP was estimated to be 17.0 per cent ($253.5 billion). The percentage point change in CGS between 2007-08 and 2011-12 is 12.0 per cent.

According to IMF data and estimates, between 2007 and 2011 general government gross debt in select OECD countries changed by the following:

General government gross debt (as % of GDP)

2007

2011*

Percentage point change from 2007 to 2011

Australia#

5.0

17.0

12.0

Chile

4.1

10.5

6.4

France

64.2

86.9

22.7

Germany

65.0

82.6

17.6

Iceland

29.1

101.2

72.1

Ireland

24.9

109.3

84.4

Israel

78.1

71.1

-7.0

Italy

103.6

121.1

17.5

New Zealand

17.4

35.3

17.9

Norway

58.6

55.4

-3.2

Spain

36.1

67.4

31.3

United Kingdom

43.9

80.8

36.9

United States

62.3

100.0

37.7

*IMF estimate.

#Note: Australian data is for the Australian Government general government sector, is sourced from the Budget papers and refers to financial years 2007-08 and 2011-12. Data for all other economies is for the total government sector and refer to calendar years beginning 2007 and 2011.

Source: IMF Fiscal Monitor September 2011, 2007-08 Budget and 2011-12 MYEFO.

(3) and (4) Information on the end-of-year market value of CGS on issue for the years 2011-12 to 2014-15 is published in Table B2 of the 2011-12 MYEFO. The face value of CGS on issue for the equivalent end of year period is expected to be lower than the market value for the years 2011-12 to 2014-15. The Government does not have any plans to amend the legislative limit and will continue to monitor the size of the CGS market.

(5) The interest expense on CGS for the years 2007-08 to 2010-11 is published in Note 10 of the Final Budget Outcome for those years. The estimated interest expense on CGS for 2011-12 is reported in Note 10 of the 2011-12 MYEFO.

(6). (a) The updated medium term budget projections included in the 2011-12 MYEFO show that the budget position is projected to improve over the medium term with net debt projected to return to zero in 2020-21.

(b) Treasury's latest estimates of the Australian Federal structural budget balance, as well as detailed descriptions of the underlying methodology and assumptions, were published in the October 2010 Treasury Roundup article.

For international comparisons, the IMF and OECD produce estimates of structural budget balances (including Australia's) across all levels of government in their Fiscal Monitor and Economic Outlook publications.