This chart from Westpac highlights Australia’s export misery:
Iron ore prices are falling faster than shipments are rising. Andrew Hanlan sums up the the problem facing the Australian economy:
A jump in imports coincided with a sharp fall in export earnings. Critically, the rest of the world is paying us considerably less for our key exports, iron ore and coal. This negative shock is squeezing incomes for businesses, households and government alike.
Very helpful information, Colin. Thanks.
Hi Colin
While the national foreign debt is rising to one trillion dollars there was not a single comment in the 2015 Budget papers about this issue. The Costello Debt Truck is now a B Double with carriages. Rising international interest rates will ensure that this economic timebomb WILL explode politically and economically in late 2016.
Neville don’t you mean the Rudd debt truck – check the ABS stats for the respective levels of Commonwealth debt over the last 25 years
Current federal debt is around $360Bn. Are you including private debt or is your reference to one trillion dollars based on this from the Daily Telegraph: “AUSTRALIA’S mounting federal government debt will be $1 trillion by 2037 if urgent action is not taken to rein in the federal budget.”
Hi Colin
The figure of $878billion is taken from ABS 5206 Table 36 (Australia Net Foreign Debt).as at March 2015. The annual trend in this data has been around $30billion pa. since 1996. With this as background the trillion mark will be hit in four years.
What is more important is the net interest drain on Australia’s financial position which will increase significantly as interest rates move upwards over the next year or so.
We should not forget the dire situation of the Australian banks during the financial crisis because of their extremely heavy reliance on foreign borrowings to finance their Australian lending. That source dried up overnight and the banks were only able to open their doors with Taxpayer support.
On being elected the federal gov applied to raise the debt ceiling to 500B..since have abolished debt ceiling??? Is this correct?? Would appreciate an honest opinion,cheers,Jay.