Australia’s current debt position – update December 2012

Parliament house flag post

Australia’s current debt position – update December 2012

Posted 18/12/2012 by Alan Payne

In recent times a lot has been spoken about Australia’s debt level. It has been a major political issue since the lead up to the last federal election and at times has dominated the political arena. This article updates data published in earlier FlagPosts which reported on Australia’s current debt position at the time they were published. I therefore intend in this article to report the latest available data on Australia’s level of debt for both the public and private sectors in gross and net terms. For definitions of gross and net debt the reader is referred to the first FlagPost on Australia’s current debt position.

Chart 1 below presents Australia’s current foreign debt for the September quarter 2012 in gross and net terms for the public and private sectors. From Chart 1 it is clear that the private sector is still the largest contributor to Australia’s foreign debt. The private sector is responsible for 78.4 and 70.5 per cent of Australia’s gross and net foreign debt respectively. Whilst gross debt for the private sector has remained constant since the March 2012 quarter, net debt has decreased 1.4 percentage points.

Chart 1

The top chart Australian gross foreign debt shows Private $1.1 trillion or 75.4% of GDP, Public-non government $93.6 billion or 6.3% of GDP, Public government $213.3 billion or 14.4% of GDP.


General government, as defined by the Australian Bureau of Statistics (ABS), is an aggregate of all levels of government including local, state and national governments. The general government gross and net foreign debt currently stands at 14.4 and 12.4 per cent of Gross Domestic Product (GDP) respectively, an increase 0.2 percentage points in both gross and net foreign debt since the March quarter 2012. The total Australian public sector (including general government, and financial and non-financial corporations controlled by governments) gross and net foreign debt currently stands at 20.7 and 14.9 per cent of GDP respectively, an increase of 0.3 and 0.6 percentage points respectively since the March quarter 2012. 

Although private sector gross foreign debt has remained constant and the net foreign debt has decreased since the March quarter 2012, the public sector gross and net foreign debt have increased. This has resulted in an increase of 1.8 percentage points in the total gross foreign debt (aggregate of the public and private sectors) as a proportion of GDP, which stands at 96.1 per cent of GDP at September 2012. Australia’s total net foreign debt has decreased by 0.5 percentage points as a proportion of GDP, which stands at 50.5 per cent of GDP at September 2012.

Chart 2 presents the national government (the Commonwealth) gross and net debt position for years spanning 1970–71 to 2015–16. Data for 2012–13 and onwards are estimates based on expected GDP and debt growth as outlined in Budget Paper No 1 2012–13 and the Mid-Year Economic and Fiscal Outlook. The national government gross and net debt currently (2011–12) stands at 18.3 and 10.0 per cent of GDP respectively. National government gross and net debts have increased 0.1 and 4.0 percentage points respectively since 2010–11. These debt figures are comprised of all foreign and domestic liabilities, including financial and non-financial corporations, for the national government.

Chart 2
The top chart shows Australian government gross debt, 1971-2016 (Percentage of GPD). The bottom chart shows Australian government net debt, 1971-2016 (Percentage of GPD).
Sources: 1901 to 1982, Wray Vamplew: Australians, Historical Statistics, Tables ANA 119-129, GF 8-14, GF 25-23, Fairfax, Syme and Weldon, Sydney 1987, ABS, National Accounts, National Income, Expenditure and Product, 2011, Cat. No. 5204.0, RBA online statistics database, Table E10, Budget Paper No 1, 2012-13, Mid-Year Economic and Fiscal Outlook 2012–13 and the Parliamentary Library.

To gain an insight into what this actually means for the national government’s overall financial health, hence the current debt position, it is helpful to compare these data with previous governments and that of other countries. Chart 3 presents gross and net debt for successive national governments spanning Whitlam to the current Rudd/Gillard Government with red indicating Labor governments and blue representing Coalition governments. The levels of debt recorded in Chart 3 reflect what the gross and net debt positions were at the end of each term of government, except for the Rudd/Gillard period where the most current data has been reported.

Chart 3
et debt, at the end of successive governments and Gross debt, at the end of successive governments (Whitlam, Fraser, Hawke/Keating, Howard, Rudd/Gillard).
Sources: 1901 to 1982, Wray Vamplew: Australians, Historical Statistics, Tables ANA 119-129, GF 8-14, GF 25-23, Fairfax, Syme and Weldon, Sydney 1987, ABS, National Accounts, National Income, Expenditure and Product, 2011, Cat. No. 5204.0, RBA online statistics database, Table E10, Budget Paper No 1, 2012-13, Mid-Year Economic and Fiscal Outlook 2012–13 and the Parliamentary Library.

In gross and net terms the current Rudd/Gillard government has recorded the second largest debt position of all previous governments over the reporting period with only the Hawke/Keating government experiencing a higher debt position.   

Chart 4 presents general government gross and net debt for Australia in 2011 compared with other countries. The term general government used here is from the International Monetary Fund and includes lower levels of government as well as the national government. Chart 4 clearly shows that Australia’s general government gross and net debt, which currently stand at 24.2 and 8.2 per cent of GDP respectively, are much lower than those of other countries.

Chart 4
International comparison of gross debt, % GDP, 2011 and International comparison of net debt, 2011 (shows a low Australian debt level in comparison to other nations)
Source: International Monetary Fund, World Economic Outlook Database, October 2012.

Combining this with historical data, it is clear that Australia’s current debt position, in both gross and net terms, is still low despite the increases documented above.

Comments

  • 21/01/2014 2:14 PM
    Flabmeister said:

    Is it possible to reproduce chart 4 showing foreign debt for the private sector? Martin

  • 21/01/2014 2:15 PM
    Alan Payne said:

    It would be nice to reproduce chart 4 for the private sector but that would go beyond the scope of the FlagPost.

  • 21/01/2014 2:15 PM
    Anonymous said:

    Would also be nice to see chart 3 against net foreign debt, which is what the Liberals crucified Labour for with the 'debt truck' in 1996.

  • 21/01/2014 2:15 PM
    Alan Payne said:

    The Library has previously published this data in Economic indicators: Whitlam to Rudd/Gillard (April 2011 update). An update to 2012 for this publication is currently being finalised.


Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print

FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament


Parliamentary Library Logo showing Information Analysis & Advice

Archive

Syndication

Tagcloud

Refugees asylum immigration Australian foreign policy Parliament climate change elections women social security Australian Bureau of Statistics Employment indigenous Australians Sport illicit drugs gambling people trafficking taxation Medicare welfare reform Australian Defence Force higher education welfare policy United Nations health financing Asia Middle East criminal law disability Australian Sports Anti-Doping Agency World Anti-Doping Agency United States federal budget school education forced labour aid statistics Australian Electoral Commission WADA income management Industrial Relations emissions trading dental health Australia in the Asian Century steroids detention Private health insurance OECD ASADA labour force transport Law Enforcement Australian Federal Police people smuggling poker machines National Disability Insurance Scheme Australian Crime Commission 43rd Parliament slavery election results Papua New Guinea Australian Public Service constitution International Women's Day corruption Afghanistan Fair Work Act child protection Aviation debt federal election 2013 parliamentary procedure ALP New Zealand Newstart Parenting Payment Census politics High Court skilled migration voting mental health Federal Court terrorist groups Higher Education Loan Program HECS governance youth paid parental leave environment foreign debt gross debt net debt defence capability customs Senate doping health crime health risks multiculturalism aged care Gonski Review of Funding for Schooling sex slavery sea farers Special Rapporteur UK Parliament Electoral reform political parties banking firearms public policy Population violence against women domestic violence China ADRV terrorism science research and development social media pensions welfare ASIO intelligence community Australian Security Intelligence Organisation accountability public service reform Carbon Pricing Mechanism carbon tax mining military history employer employee fishing by-election European Union same sex relationships international relations coal seam gas family assistance planning Senators and Members United Nations Security Council Australian economy food vocational education and training Drugs health reform Indonesia children codes of conduct terrorist financing health system money laundering United Kingdom early childhood education Canada Financial sector national security fuel disability employment Tasmania integrity transparency Australian Secret Intelligence Service sexual abuse federal state relations World Trade Organization Australia housing affordability bulk billing water renewable energy children's health health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation expertise climate Intergovernmental Panel on Climate Change leadership Department of Agriculture Fisheries and Forestry food labelling Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets Indigenous constitutional recognition of local government local government consumer laws PISA royal commission US politics language education baby bonus Leaders of the Opposition Parliamentary remuneration Australia Greens federal election 2010 servitude Trafficking Protocol energy forced marriage rural and regional Northern Territory Emergency Response ministries social citizenship human rights emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories workers Bills anti-corruption fraud bribery corporate ownership whistleblower G20 economic reform innovation standards NATO Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly public health smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine regional unemployment asylum refugees immigration political finance donations foreign aid Economics efficiency productivity human rights; Racial Discrimination Act employment law bullying asylum seekers Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies trade unions same-sex marriage disorderly conduct retirement Parliament House standing orders public housing prime ministers election timetable sitting days First speech defence budget submarines Somalia GDP forestry world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission regulation limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders animal health live exports welfare systems infant mortality middle class welfare honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Constitutional reform referendum Rent Assistance competition policy pharmaceutical benefits scheme obesity evidence law sacrament of confession US presidential election international days DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant homelessness regional engagement social determinants of health abortion Youth Allowance Members suspension citizen engagement policymaking workplace health and safety Trafficking in Persons Report marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament alcohol Korea rebate Australian Greens presidential nomination Racial Discrimination Act entitlements political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing Hung Parliament political education social inclusion Social Inclusion Board maritime early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin Iran sanctions Norway hospitals republic President Barack Obama Presidential visits ANZUS qantas counselling

Show all
Show less
Back to top