Our Federal Government and the States are not paying back debt now and it looks like our combined Fed-State debt will peak in 2016-17 at levels of at least 30% higher than now.
We heard how Campbell Newman was going to reduce Qld debt before the last election. His only attempt so far in reducing debt was via selling more state assets. Despite that, Qld's State debt is estimated to peak in 2016-17 from today's $70 billion to $100 billion.
It seems that both Federal & State governments are simply too slow to curb spanding when a shortfall in revenue happens.
IMO, if the Newman cutbacks including government employee sackings had been implemented Federally and in other States, we would be now in recession with about another 0.5% unemployment.
So what is Tony Abbott and Joe Hockey do come next September?
Cut back revenue by scrapping MRRT & CO2 tax. Cut back government spending ( which presumably will like Qld,include sackings).
This, prima facie, will likely drive the economy closer to recession without paying back any government debt.
The rising of tax intake from tax evaders will likely take up to a decade. Just look at Operation Wickenby( going for nearly 10 years) and the ATO persuit of Toyota ( started 2002 & concluded 2010)
In the interim, we are vulnerable to a Chinese slowdown and/or a further international credit squeeze.
From 2008 we simply have kicked the can down the road by maintaining spending financed by debt and we will be doing that for at least another 4 years no matter who is in power.
