Government debt growth has not slowed down significantly to indicate any return to a Government budget surplus. Together with the current down trend in long term interest rates, a promise of an investment boom is not yet apparent.

State Government debt has grown by $25 Billion over 12 months. Federal Government debt has grown by $49 Billion over 12 months (as at 31st May 2011. Source:RBA). Total Government debt growth: $74 Billion. Total Government Debt: $369 Billion.

It will be interesting to see the political landscape 12 months from now, if this trend is maintained. The promised budget surplus will need to be re-assessed, the government will be looking to cut spending as an alternative to increased revenue, the economy will have slowed further and all of this running into the start of the carbon tax. Tough politics indeed.

Michael Cornips