1 Comment

Hi Scott. If an old policy wonk may add ...

Net debt is not the appropriate metric. Gross is. The difference between net and gross is almost entirely the Future Fund. It's earnings are reinvested and not set off against interest payments. It is also an equity portfolio not well counter-correlated with a debt portfolio. Don't by the Treasury/Treasurer spin. If the market crashes, the future fund will crash. The debt balance won't.

There is also insufficient intellectual ballast in the Treasury or RBA to undertake such a review. Plus the incentives are completely screwed. Canberra has grown so much as have the public services, a Treasury review would result in them making their friends and neighbours redundant. According to the ABS, there are over 250K Commonwealth public servants costing over $25 billion per annum. That's half the total population of Canberra. Deduct kids and probably 2 in 3 working people work for the Commonwealth.

Bureaucratic review deliver what is required.

Expand full comment