What is Australia's total DEBT? - Aussie Stock Forums

# Thread: What is Australia's total DEBT?

1. ## What is Australia's total DEBT?

Has anyone calculated the sum of Australia's Private and Public debts?

Private is 156% of GDP
http://cpd.org.au/mediarelease/austr...ubprime-crisis
Public is 17.5% of GDP
http://buttonwood.economist.com/content/gdc

Will check above figures. Has anyone an article on the totals? Or has anyone totalled these before?

2. ## Re: What is Australia's total DEBT?

Try the RBA statistics http://www.rba.gov.au/Statistics/Alp...listing_d.html, they will definitely have what you need.

3. ## Re: What is Australia's total DEBT?

Originally Posted by MR.
Has anyone calculated the sum of Australia's Private and Public debts?

Private is 156% of GDP
http://cpd.org.au/mediarelease/austr...ubprime-crisis
Public is 17.5% of GDP
http://buttonwood.economist.com/content/gdc

Will check above figures. Has anyone an article on the totals? Or has anyone totalled these before?
So we've got debt at 173.5% of GDP. That leads to the question as to what happens next? I'm expecting we'll try inflation, whether it gets going sufficiently is another matter but I think we (the Western world in general) will certainly try. How else would we possibly repay all that debt?

4. ## Re: What is Australia's total DEBT?

Originally Posted by Amor_Fati
Try the RBA statistics http://www.rba.gov.au/Statistics/Alp...listing_d.html, they will definitely have what you need.
With thanks. Forgot about that site

Originally Posted by Smurf1976
So we've got debt at 173.5% of GDP.
If these figures are used. But are they right?

Originally Posted by MR.
That 156% of GDP happens to be the same figure as "Debt to disposable income" from the RBA. I have put it in a chart below.

Chart 1.doc

What about the 17.5%. If we made the date on that buttonwood calculator 2007 or 2008 the data claims we have 143 and 120 billion in public debt. We had no government debt then. The GDP data seems close at approx 980 billion AUD and is similar to this site:
http://www.dfat.gov.au/geo/fs/aust.pdf

The RBA data however for GDP is approx 275 billion.
http://www.rba.gov.au/Statistics/Alp...listing_g.html

Hmmm

5. ## Re: What is Australia's total DEBT?

The figures below were from the ABC News (I think in December 2005). In USD's
.................................................. ....................
Who's in hock to whom (Global balance sheet)
US \$2542 Billion
Australia \$388 Billion
Europe \$896 Billion
UK \$338 Billion
Japan \$1536 Billion
.................................................. ....................

I assumed the above figures were debt owed to others. When divided by population of those countries we have:

US \$8596 per person
Australia \$19400
Europe \$3446
UK \$5586
Japan \$12056

Is \$19400 correct?
That is what I'm trying to check. Certainly is higher than the others!

6. ## Re: What is Australia's total DEBT?

I reckon mostly in housing loans.

If there ever was a psychological change in investors thinking then watch out!
Australians love of property would take a lot to change though.

7. ## Re: What is Australia's total DEBT?

Originally Posted by Knobby22
I reckon mostly in housing loans.
Not really helping Australia as a whole though. We borrow money from foreigners, on which we pay interest, in order to bid up the price of exactly the same houses we already had. All we've gained, as a country, is the debt - there's absolutely nothing to show for it.

8. ## Re: What is Australia's total DEBT?

Originally Posted by Smurf1976
Not really helping Australia as a whole though. We borrow money from foreigners, on which we pay interest, in order to bid up the price of exactly the same houses we already had. All we've gained, as a country, is the debt - there's absolutely nothing to show for it.
Krudds good for it he's guaranteed the bank deposits so we won't have to worry
and the guarantee is worth the paper it's written on (Was it written)
anyway if I had a printin press I could make the same assurances its just a question of what the bit of paper I give you is really worth and when you get it and the fees to give the governement the paperwork to prove it really is your money

9. ## Re: What is Australia's total DEBT?

Originally Posted by Smurf1976
Not really helping Australia as a whole though. We borrow money from foreigners, on which we pay interest, in order to bid up the price of exactly the same houses we already had. All we've gained, as a country, is the debt - there's absolutely nothing to show for it.
Well put! Australians have not seen bad times for 20 years. One day there will be a major wake up call.

10. ## Re: What is Australia's total DEBT?

Have it finally...

Total private debt = \$1,913,544 million which is 160% of GDP

From chart one: (1/2 way down)
http://www.debtdeflation.com/blogs/2...atistics/?cp=2

Reconfirmed as \$1.9 billion in this following article.
Also states : “more than one and a half times Australia's annual economic output.”

http://www.abc.net.au/news/stories/2...17/2688894.htm
Hope one isn’t acquiring their information from the other!

Public debt is about 1.5% now of GDP. Will re-find that info’.

While some of that debt would have been used to build new dwellings, or renovate existing ones, which creates jobs and places for people to live, the majority of that debt would have gone to bidding up the price of land on which existing properties stand.

That creates no jobs (except a handful for real estate agents, brokers and financiers) and simply represents the nation taking out debt to join a national Ponzi scheme, where the later comers pay a premium to those who have been in the housing game longer.

11. ## Re: What is Australia's total DEBT?

Originally Posted by Smurf1976
Not really helping Australia as a whole though. We borrow money from foreigners, on which we pay interest, in order to bid up the price of exactly the same houses we already had. All we've gained, as a country, is the debt - there's absolutely nothing to show for it.
That's not entirely correct. We have gained the debt, AND the money. While it may not be the most efficient way to pump capital into the economy, even when used to "bid up house prices" that money still moves on through the Australian economic system and could end up being invested in the stock market, into new businesses, into the construction of new buildings etc (which is very productive) and so on. Unless the money instead flows directly back off-shore (because say foreigners owned the property purchased), or all the proceeds were used to buy imported goods, then some/most will flow back to the government in the form of stamp duties and capital gains tax dues etc.

Bottom line is the money just doesn't "disappear" just because it was originally borrowed for the purpose of a real estate purchase. The credit is the mechanism for putting new money into the whole system, where it goes *first* simply determines the efficiency with which that capital might be put to "productive" use. Land/houses will always cost something and will always required borrowed money for the majority of purchasers, so a large proportion of "new money" always has and always will find it's way into our economy via borrowing for property as an asset class.

Cheers,

Beej

12. ## Re: What is Australia's total DEBT?

Originally Posted by Beej
That's not entirely correct. We have gained the debt, AND the money. While it may not be the most efficient way to pump capital into the economy, even when used to "bid up house prices" that money still moves on through the Australian economic system and could end up being invested in the stock market, into new businesses, into the construction of new buildings etc (which is very productive) and so on. Unless the money instead flows directly back off-shore (because say foreigners owned the property purchased), or all the proceeds were used to buy imported goods, then some/most will flow back into the economy in general and some also to the government in the form of stamp duties and capital gains tax dues etc.

Bottom line is the money just doesn't "disappear" just because it was originally borrowed for the purpose of a real estate purchase. The credit is the mechanism for putting new money into the whole system, where it goes *first* simply determines the efficiency with which that capital might be put to "productive" use. Land/houses will always cost something and will always required borrowed money for the majority of purchasers, so a large proportion of "new money" always has and always will find it's way into our economy via borrowing for property as an asset class.
I just wanted to make a correction in post above (in bold).

13. ## Re: What is Australia's total DEBT?

Originally Posted by MR.
Reconfirmed as \$1.9 billion in this following article.
Should read 1.9 trillion as per the article not billion.

Originally Posted by Beej
We have gained the debt, AND the money.
Yes we have.......
Wonder how much of that has now ended up (lost) to overseas?

We know where the debt is but not the money!

14. ## Re: What is Australia's total DEBT?

Originally Posted by MR.
Public debt is about 1.5% now of GDP. Will re-find that info’.

Public debt = \$27,100,000,000 (27.1 Billion)
Approx 1.3% of GDP at 30th June 2009

Private debt = \$1,913,544,000,000 (1913.5 Billion)
Approx 160% of GDP at April 2009

Total debt of approx \$88,200 per person in Australia.

.

15. ## Re: What is Australia's total DEBT?

Originally Posted by Beej
We have gained the debt, AND the money.
True, the PRINCIPAL borrowed gets circulated about the country for more productive things, but what about the INTEREST?

16. ## Re: What is Australia's total DEBT?

Debt itself is immaterial - it's only a problem if you can't pay it back, even then it's all about degrees of debt .....

If the bank lends you \$300k and you can't pay it back - it's your problem; if they lend you \$10B and you can't pay it back then it's their problem!

If the government has guarenteed the banks deposits, it's then our problem!

So your problem then becomes my problem......

Here's a new concept - living within ones means!

17. ## Re: What is Australia's total DEBT?

Oh my god, we're all doomed!!!!!

Those figures arent even bad, particularly when compared to countries like US, Japan, Euroland.

USA:

Public Debt to GDP ratio - 80%
Private Debt to GDP ratio - 350%

Japan:

Public Debt to GDP ratio - 160%
Dont know the other one

You guys had better think of your debt compared to your incomes. If you have a mortgage worth 450K and an income of 60K, your personal "debt to GDP" ratio is 650%. Better go kill yourselves. 160% doesnt sound bad now, does it?

Fact: Australia's debt burden is sustainable. Inflation will come about because of wage pressures from a socialised labour system on top of an overheated economy. It wont be because the government printing money.

18. ## Re: What is Australia's total DEBT?

White_knight were did you get those figures from.

They don't look right.

Cheers

19. ## Re: What is Australia's total DEBT?

Those figures arent even bad, particularly when compared to countries like US, Japan, Euroland.

Japan:

Public Debt to GDP ratio - 160%
Dont know the other one
Dear White_Knight

Thanks for answering the simple question earlier then. Since you have all the data.

I would like to know (apart from a link or two for your last post) exactly how much Japan "has" in Private savings.

MR.

20. ## Re: What is Australia's total DEBT?

Originally Posted by algis
True, the PRINCIPAL borrowed gets circulated about the country for more productive things, but what about the INTEREST?
Well that's right but if the productive use of the money earns more than the interest bill (or generates more increase in VALUE than the interest costs to us), then we are ahead, and that's the end game.

Originally Posted by White_Knight
You guys had better think of your debt compared to your incomes. If you have a mortgage worth 450K and an income of 60K, your personal "debt to GDP" ratio is 650%. Better go kill yourselves. 160% doesnt sound bad now, does it?

Fact: Australia's debt burden is sustainable. Inflation will come about because of wage pressures from a socialised labour system on top of an overheated economy. It wont be because the government printing money.
I actually agree pretty much with this. There is nothing to panic about with Australia's current private debt, and certainly not our current net public debt.

Originally Posted by MR.
I would like to know (apart from a link or two for your last post) exactly how much Japan "has" in Private savings.

MR.
MR not sure about Japan but I am sure it is a lot! Even in little old Australia, as of Aug 2009 private households had \$433B (~40% of GDP) in cash savings/deposits in banks, and something around \$1 Trillion (~90% of GDP) in superannuation funds. There's a stack more "savings" sitting in RBMS funds as well. So even just counting the cash and super, that pretty much adds up to the private debt total leaving a net debt of only about 30% of GDP.

On top of that there's another \$325B (30% of GDP) or so in bank deposits from private corporations.

I guess these figures raise an important point - why just look at gross debt? You also need to look at the rest of balance sheet, ie total assets as well as liabilities! In Australia, the private debt could be paid off in total with household + corporate cash savings + household superannuation funds alone. We haven't even considered the \$3.8T worth of residential real estate, or the I don't know how much commercial real estate, farm land, mineral deposits etc etc? In reality, on a per capita basis, our net position is several \$100k per person "in the black". The per capita gross debt figure is therefore backed by our personal net asset position, and funded comfortably and sustainably by our gross national income (ie GDP). Ie (for Uncle Festivus!) we do live within our (national) means!

PS: All bank figures from APRA (http://www.apra.gov.au/Statistics/Mo...Statistics.cfm)

Cheers,

Beej

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